Despite advances in automation, digitization, and AI, managing the frontline workforce remains a critical challenge in developed economies. Labor shortages are widespread; in the United States, there are over one million more unfilled positions than hires. High attrition, especially within the first 90 days, adds to the issue. Additionally, labor productivity growth lags, with the United States seeing only 1.6 percent annual growth from 2019 to 2024, below the historical average of 2.2 percent, while Western Europe has managed only 0.6 percent annual growth over the past decade.
Our research across more than 35 US manufacturing sites shows that suboptimal approaches to frontline talent impose significant costs. High attrition and absenteeism drive up overtime, recruitment, and training expenses. Skill gaps and poor engagement further drag down productivity and reduce output quality. Leading companies, however, are treating talent as an investment, implementing integrated talent operating models governed by cross-functional leaders from HR, operations, and finance.
Organizations that make these changes can generate $17,000 to $34,000 in new value per frontline employee. About 60 percent of this value comes from improved workforce stability, while the rest stems from productivity gains. At the site level, these improvements reduce frontline labor costs by 15 to 25 percent on average (exhibit).
The six dimensions of an integrated talent operating model
The frontline operating model consists of six dimensions that work together to drive improvement and sustainability of both talent stability and productivity.
Culture and experience
Workplace culture and employee experience can positively affect performance and enable other operating model elements. When employees feel valued and engaged in decision making, they’re more likely to support improvement efforts. Successful companies create meaningful value propositions, maintain two-way communication, and demonstrate a commitment to employee well-being with structured programs and initiatives.
For instance, a large Silicon Valley tech company uses avenues to improve transparency and communication such as weekly all-hands meetings, where employees engage directly with leadership to discuss company decisions and have the opportunity to chime in. The company also fosters community through an annual Week of Service program that encourages employees to team up for volunteer projects, strengthening team bonds and purpose beyond work. These initiatives contribute to high employee satisfaction, with approximately 90 percent of employees reporting work-life balance and flexibility, and retention rates averaging over four years.
Work design
Effective work design requires management to engage with frontline employees to understand workflows and collaborate on solutions. Leading organizations develop multiyear transformation road maps, continuously update role descriptions, and optimize workflows through automation and process redesign. For example, one manufacturer achieved significant improvements in operational efficiency by restructuring supervisor roles to spend 60 percent of their time on the floor, up from 20 percent.
Workforce planning
Success in this dimension requires three elements: dynamic workforce planning that aligns machine-learning-based demand and supply forecasts for talent; role-based skill mapping for teams; and optimized, flexible shift structures. Organizations should build forecasting capabilities, maintain clear visibility of current and future skill requirements, and create agile, often app-based, shift scheduling systems that balance business needs with employee preferences. A telecommunications company used optimized role integration and AI-powered scheduling to improve technician utilization by 10 to 15 percent and generated 20 percent more field service capacity.
Talent attraction and onboarding
Leading frontline organizations build comprehensive talent pipelines through deep understanding of local labor market dynamics, clear definition of success profiles for each role, development of diverse sourcing channels, and an effective selection process that includes a job preview and work sample component. They proactively market open positions highlighting core areas of the employee value proposition, especially around career development and advancement opportunities.
Additionally, these organizations understand that turning new hires into productive employees requires an effective onboarding process with a focus on three areas: cultural integration, skill development, and performance expectations. This requires structured programs that combine classroom training, on-the-job learning, and regular performance checkpoints. Successful companies often provide clear 30-, 60-, and 90-day expectations and pair new hires with experienced mentors to help them achieve those goals. At one manufacturing company, this approach lifted the share of new employees who met their first performance goals from 15 to 75 percent.
Talent development
Outstanding frontline companies create integrated development systems that combine technical and leadership skills. This includes implementing competency-based training frameworks, establishing clear career paths and leadership upskilling from operator to supervisor roles, and providing cross-training opportunities across production and service lines. Development programs use both traditional and digital learning methods, with regular assessments of effectiveness.
One major petrochemicals company used virtual reality (VR) technology to create an engaging, immersive training environment for new refinery hires. The immersive curriculum covered a wide range of topics, from safety, operations, and maintenance to leadership and teamwork. The new system cut the time required to train new frontline staff by 35 percent, while better training outcomes helped the facility boost plant reliability and operating performance.
Talent effectiveness
Our research shows that companies with effective performance management systems are three times more likely to outperform their competitors. These systems should focus on three elements: clear performance standards, regular coaching and feedback, and appropriate recognition and consequences. This requires frontline supervisors to spend most of their time on coaching and performance management, rather than administrative tasks.
Performance management should align with business objectives by considering individual and team capabilities and ensuring rewards at both individual and team levels. A leading cosmetics company focused on revitalizing its performance management system to support its ambitious goals. It shifted to a goal-oriented model, combining financial and nonfinancial incentives, and setting customized objectives that were assessed through a behavioral rating system of core competencies against clear descriptions of good, great, or outstanding practices. This strategic realignment helped the company achieve over 30 percent annual growth.
The six dimensions of an integrated talent operating model work together to help companies understand their frontline operating model maturity and set an aspiration around the core frontline management capabilities. Site and corporate leaders can use them to assess their current level of frontline maturity and transform their front lines into a source of competitive advantage.