Winning the Talent War: The Secret to Overcoming Workforce Shortages in Competitive Markets

Inside the Strategic HR Child Care Solution That Transformed Mazda Toyota Manufacturing

Tony Dillon is a seasoned leader in corporate administration and Human Resources, with a proven track record of driving organizational change and achieving business results. Over nearly 25 years with Toyota Manufacturing, he held strategic roles across multiple states, culminating in a greenfield start-up at Mazda Toyota Manufacturing, a 4,500-employee joint venture assembly plant in Alabama. Following his retirement from Toyota, Tony transitioned to government contracting before joining TOOTRiS as Vice President of Corporate Benefits Solutions. Earlier in his career, he served as Vice President of Corporate Cash Management at Old National Bank in Evansville, Indiana. Drawing from his extensive experience, Tony shares the following powerful story about how he tackled one of the most pressing challenges in HR—employee recruitment and retention—by implementing an innovative Child Care solution.

Introduction

As a banker for nearly 12 years, throughout college and into my early professional career, I was certain of two things: 1) I would retire from banking, and 2) I would never work in Human Resources. Banking was my comfort zone—it was what I knew, and as a confident (perhaps overconfident) young manager, I viewed HR more as a barrier than a partner.

Then, Toyota dropped a giant assembly plant in a rural part of southern Indiana, near my home, and an unexpected opportunity in their HR department arose. I realized that while I could always return to banking, I might not get the chance to work for Toyota again.

What followed was a crash course in navigating the complexities of working alongside Type A, results-driven professionals with manufacturing backgrounds in a field where I had no prior experience. It was sink or swim.

Fast forward twenty years, and after multiple complex assignments that equipped me with skills I never imagined I’d acquire, I was offered my most significant challenge yet: a four-year, relocation assignment to Huntsville, Alabama, to support the start-up of Mazda Toyota Manufacturing, a joint-venture automotive assembly plant. My responsibility? To build the Human Resources infrastructure and, ultimately, work myself out of a job by the end of the assignment. While I had been part of other start-ups before, this one was like no other. Here’s why:

• Joint Venture: Mazda and Toyota’s collaboration meant creating a completely new company. Nearly every program and service had to be tailored to this unique entity, blending four distinct cultures: 1) Mazda, 2) Toyota, 3) U.S. staff, and 4) Japanese staff.
• Size and Complexity with Compressed Timelines: We were simultaneously building two assembly lines and launching two new-to-market vehicles—one from Mazda, one from Toyota—on a tight schedule.
• Labor Market: The area had less than 2% unemployment and was surrounded by high-compensation competitors, making talent acquisition a significant challenge.
• COVID-19: As if the complexity wasn’t enough, the pandemic added an entirely new layer of uncertainty and disruption.

But Toyota taught me one crucial lesson: There’s no fear in tackling complex problems. It’s all about the process. Bring it on!

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Section 1: My Background in HR

As mentioned in the introduction, when I joined Toyota, my HR experience was limited to administering policies as a young leader in banking. However, the timing was fortunate—Toyota’s early days in U.S. assembly manufacturing were still relatively new, and at that time, the company’s massive headquarters functions had not yet consolidated, leaving the two plants with a considerable amount of autonomy. This environment provided an excellent learning landscape.

Two of my initial project assignments stand out as key learning moments: first, the discovery and implementation of a time and labor system, which required me to quickly get up to speed on policy knowledge; and second, the investigation and initiation of an on-site Child Care center, which was a non-traditional and innovative benefit at the time.

Following job assignments through all the disciplines of HR in each section, I had the opportunity and privilege to lead all HR functions including: 

• Total rewards systems for hourly, salaried, and executive staff
• Comprehensive benefits design and implementation, including:
  • Traditional yet creative health and welfare benefits
  • On-site health clinic and pharmacy
  • The previously mentioned child care center
• Talent acquisition
• Organizational staffing management
• Succession planning (some of the more confidential and strategic work)
• Employee relations, which, while one of the most challenging, became one of my favorite areas
• Health and safety
• Vehicle leases and discount purchase programs
• Performance management
• Organizational development

By working through each of these areas and ultimately leading the HR division, I was well-prepared for my first major and most challenging assignment—a two-year supplier improvement initiative in 2015.

Briefly, this was a critical Tier-1, just-in-time supplier that had performance issues, causing frequent line stoppages—an unacceptable situation in Toyota’s manufacturing model. With just two years to reduce their 150% annualized turnover and improve a toxic culture, I structured my approach into four key pillars (although I didn’t fully realize it at the time):

1. Develop relationships: Trust was essential. I needed the team to believe in me and in the changes I was recommending.
2. Fix the top: The leadership approach was broken and needed immediate attention. Some leaders had to step aside, while others required intensive development to improve quickly—both actions were critical.
3. Support the middle: Supervisors and middle management needed resources, training, and, most importantly, confidence in their ability to succeed.
4. Celebrate: Recognition was key. From small improvements to major milestones, it was important to celebrate progress—down to individual achievements.

Thanks to a solid approach, and probably a bit of luck, that supplier has since achieved and maintained its position as one of the top-performing plants.

Now, the second most difficult, assignment, Mazda Toyota Manufacturing (MTM)

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Section 2: The Hiring Challenge

At MTM, once the core leadership team was established, the top priority was the hiring and training of 4,000 team members. A trained and capable workforce is essential—not only to meet critical production start dates but also to ensure long-term sustainability and success.

Recruiting in a market with unemployment under two percent presents significant challenges. Not only is it difficult to find and hire talent, but retaining employees is equally crucial. To put things into perspective, MTM needed to hire up to 50 new employees each week under ideal conditions. With a turnover rate averaging 50 percent, that number jumps to an additional 25 people per week—adding to the cost and inefficiency of the operation.

Given the importance of both recruiting and retention, the HR function was focused on creating processes, procedures, and systems that would optimize results. For the hourly workforce, three key components (not mutually exclusive) were:

• Capable Leadership: Both technical expertise and a people-first approach were essential for success.
• Competitive Compensation and Benefits: Striking the right balance between cost management and the need to attract and retain talent from a 75-mile radius.
• A Culture that values and fosters inclusivity, embracing individuals from all demographics and diverse backgrounds.
  • Example:  Strive for the highest female percent of workforce compared to Toyota Assembly plants in the U.S.

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Section 3: Uncovering the Child Care Barrier

After several weeks of onboarding new team members, along with conducting interviews and surveys, it became evident that traditional recruitment and retention strategies alone would not be sufficient to meet our objectives. This is when the issue of Child Care emerged as a critical factor:

• Feedback from potential candidates consistently pointed to Child Care as a significant barrier to both entering and staying in the workforce.
  • Survey data and local studies further confirmed this insight.
• It was clear that Child Care challenges disproportionately affect working parents, particularly women, and have a direct impact on workforce participation.

Through conversations in local business forums, I realized that Child Care was a major challenge—ranging from limited provider availability to high costs. In essence, by not addressing the challenge, MTM was inadvertently excluding a crucial demographic in our recruiting efforts: all parents, with a particular focus on single parents, especially single mothers.

Despite recognizing the problem, it was frustrating that the local business community struggled to identify viable solutions. This gap led us to take matters into our own hands, launching an internal investigation to explore ways to address this complex issue.

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Section 4: Exploring Our Options

In true Toyota-Way fashion, after clearly identifying the issue, we thoroughly considered and evaluated several countermeasures:

1. Build an onsite Child Care center
2. Partner with a large local center to secure spaces for our team members
3. Cooperate with other businesses or our supplier base to build a center or collaborate with an existing one
4. Promote the Employee Assistance Program (EAP) to help employees find providers
5. Offer a Child Care stipend, managed by MTM

While these seemed like the only viable options, each presented its own set of challenges:

1. Onsite center: The cost was prohibitive, with construction alone potentially reaching $20 million, not to mention ongoing maintenance and the cost of partnering with a Child Care provider to operate the facility.
2. Partnership with a local center: Securing enough spaces and ensuring MTM team members were prioritized proved difficult.
3. Co-op model: Coordinating slot prioritization and managing the complexity of shared costs presented significant hurdles.
4. EAP: This option could only assist with finding Child Care providers, not solving the underlying availability or affordability issue.
5. Stipend: Managing a stipend-only program would be administratively burdensome and lacked long-term sustainability.

Just as we were grappling with these challenges, and with perfect timing, the Huntsville Chamber of Commerce introduced an innovative solution—TOOTRiS!

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Section 5: Choosing and Implementing the Solution

I distinctly remember after our first discussion with TOOTRiS, thinking aloud, “This sounds too good to be true, but let’s keep investigating.” The solution seemed radically different and, remarkably, checked all the boxes:

• A digital platform offering real-time availability of existing Child Care providers.
  • Most employees prefer care closer to home than to work, and this platform met that need.
• TOOTRiS manages the provider network, taking that burden from MTM.
• Flexible options, cost savings, and concierge support for employees, ensuring their needs were met with ease.
• A robust communication and rollout strategy to ensure every employee was informed about the benefits.
• Provider support at no additional cost to the company.
• Reasonable subscription fees, less than 10% of the cost of an onsite facility.
• TOOTRiS also managed the company stipend, streamlining the entire process.

After conducting thorough research, drafting and securing approval for the proposal, MTM officially partnered with TOOTRiS in the spring of 2022.

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Section 6: The Results

The return on investment (ROI) calculation for MTM, with a minimum target, was based on achieving a one percent improvement in employee retention—an increase that would cover the subscription and stipend costs.

After two years of partnership with TOOTRiS, the results were compelling:

• 11% overall improvement in employee retention
• 20% improvement in female retention
  • MTM has a female workforce is 33%, exceeding the female workforce percentage at Toyota Assembly plants.
• Increase in application rates
• Cost-effective, low or no-cost advertising through news stories and testimonials
• Improved local Child Care provider availability, benefiting not just MTM, but parents throughout the community
• Successful on-time start-of-production schedules

One particularly striking statistic: When we compared the number of MTM team members enrolled with TOOTRiS to the capacity of an onsite Child Care center, we found that TOOTRiS serves more than twice the number of employees that an onsite center could accommodate—at a fraction of the cost.

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My Key Takeaway:

Not all challenges are inherently negative. The need for Child Care, for example, is a direct result of employment itself. We employ parents, and they leave their homes to work—a positive outcome in many ways. However, this creates the Child Care challenge. As businesses committed to problem-solving, it is our responsibility to address this issue. While we may be competitors in the marketplace, Child Care is not a competitive concern—it is a collective one. We must all work together.

Child Care is a strategic investment in our workforce. It is the cornerstone of a comprehensive workforce strategy and is essential to the well-being of our communities.

As it turns out, the launch of a comprehensive Child Care solution through our partnership with TOOTRiS marked the conclusion of my tenure at MTM. At the end of 2022, after completing my four-year assignment, I retired from Toyota. I am both grateful and humbled by the President’s final remarks at my retirement reception. He thanked me for my dedication and the tireless work to establish the HR functions—accomplished with the support of a fantastic team. Then he added, “You have a legacy, and that legacy is TOOTRiS. I asked you for an innovative approach and solution, and you delivered!”

My Advice to HR Leaders and Senior Executives:

Take the time to deeply understand your workforce’s needs and identify any barriers they face. Then, embrace the challenge of problem-solving and pursue creative solutions that make a tangible difference—solutions that foster a stronger, more inclusive workplace culture.