Questions leaders should ask themselves BOX 2 Do I understand the labour dynamics in the local talent market(s) I operate in? Do I know who my main talent competitors are and how their EVP differs from mine? Do I know my main drivers of attraction and attrition? Do I know what our employees want and how desires differ across generations, job types and locations? Do I know how my maturity level across the six talent capabilities compares to my peers? Do I understand the value associated with improving specific stability metrics, for example: time to fill, absenteeism and turnover? Additionally, the company or site should garner a comprehensive understanding of its overall maturity in each of the six capabilities mentioned earlier: work design and safety, talent planning, attraction and onboarding, talent development, talent effectiveness and culture and experience. This means knowing where they are ahead of the curve and behind it, but it goes further – the site should determine, based on the market and strategy, where to focus its efforts. These puzzle pieces come together to allow companies and sites to understand the value of improving productivity and stability metrics. From there, they can craft a holistic set of initiatives that enable them to use various levers that can improve talent stability and overall business performance. McKinsey research has found that improving productivity and stability could help companies realize significant value. The average earnings before interest, taxes, depreciation and amortization (EBITDA) impact observed was in the range of $17,000-34,000 per active employee. McKinsey found that the investment required to implement these initiatives typically generates a return of three to five times the initial investment within one to two years. Improved stability and productivity generate meaningful value FIGURE 8 Top/bottom margin area 8mmAverage EBITDA impact per medium-skilled worker Thousand dollars per active frontline US FTE per year1 Total value per FTEStability value Productivity value12-17 5-17 17-34Sources of value Cost of covering shifts Recruiting costs Training costs Productivity lost during vacancy New employee ramp-up loss Supervisor productivity loss Productivity lost from low engagment Skills mismatch Organization with 60,000 frontline employees that can... Decrease attrition by 5pp Increase engagment by 12pp Could see over $300 million of capturable annual savings (+~0.8pp EBITDA margin) Note: 1. FTE = full-time equivalent; pp = percentage points. Assumes average salary of $63K used for US; ~$40k used for EU (not including overtime or benefits). Turnover of 33% per year. Time to fill = 28 working days, work week = 5 days. Contribution per FTE = S&P500 median gross margin per FTE. Source: McKinsey analysis; Society for Human Resources Management (SHRM) estimates of times spent on HR activities (e.g. interviews); BLS. Putting Talent at the Centre: An Evolving Imperative for Manufacturing 14

Putting Talent at the Centre An Evolving Imperative for Manufacturing 2025