Human resource delivery systems can streamline payroll and time & attendance so well they can help businesses avoid making redundancies, claim software vendors. Workforce management tools also provide added benefits including shift planning that should be valued following the new working directive legislation that enables more flexible working. Chris Pope reports.
If people are their company’s greatest asset, as many manufacturing businesses claim, then the role of human resources and the software systems designed to support HR should be paramount for any manufacturing enterprise. However, given the turbulence in the manufacturing sector in recent years, many companies have seen substantial change due to mergers and acquisitions, growth or contraction as a result of changing customer demand and increased competition as well as off-shoring of operations. According to Brian Cormican, director of HR for Oracle UK, this is one of the three key reasons its clients invest in a new HR and payroll system. Another is that their existing ones are in such a poor state that they are worried employees will not be paid or that they are complying to statutory regulations.
Analysing employee value
Add to this the cost control and ensuring the business has an effective human resource and payroll headcount ratio to the total number of employees and it’s not difficult to see how the credit crunch will have exacerbated these pressures. Perhaps no greater challenge comes from a potentially sustained drop in orders which can often lead to redundancies. Andrew Weir, advocacy team leader at NorthgateArinso is quick to point out that such severe reactions to falling orders can be detrimental for businesses. “Losing skilled workers could prevent companies responding to the needs of the upturn and many businesses in an array of industries, including the manufacturing industry, are realising they will need their skilled staff when the market picks up again.” Weir is emphatic about the role that HR technology can play within a proactive HR strategy, especially when identifying alternatives to redundancies. “Management teams are increasingly looking to focus on restructuring and skills redistribution. HR technology would enable them to obtain the right information to make the informed decisions that were best for the workforce and the company.”
When it comes to making the best case for HR systems, the availability and accuracy of information is the first stage to empower manufacturers to make the best decisions in such challenging circumstances. As Rosie Heptonstall, marketing manager of Sage points out, “Unless you truly know the value and worth of each employee, not just in the present and the past, but also their potential role in the future of the company, you will not be able to make the most effective HR decisions for the short, medium and long term success of your company.” This includes information not just on employee attendance, performance and profitability but also managing and growing the talent within the company. Talent Management itself means ensuring that everyone is up to date in their developmental training as well as relevant health and safety practices.
While Heptonstall appreciates that such systems can seem intrusive, especially when involving Time and Attendance (T&A) practices and when jobs are potentially at risk, she is adamant that if handled skillfully they can have a positive motivational and galvanising effect on the workforce and the company. “Skilled managers can communicate the need for everyone to pull together with the focus being on ensuring everyone is best able to fulfil their role and their potential within the company, which in turn enables the company to do so. HR technology can be then seen as a means to achieving this while also giving an appropriate degree of self determination to each employee.”
Benefits of workforce management
Piers Freeman, senior EMEA director of business development for human capital management at Infor also sees talent management as an important, longer term strategic tool that manufacturers would be advised to implement. He adds that the related area of Workforce Management (WFM), the scheduling of human labour resources on the shop floor, offers some very positive benefits especially in the today’s business climate.
“Apart from saving 3-5% of a manufacturer’s annual payroll costs, workforce management systems can drive labour planning and scheduling tools much more efficiently, and more fairly than any harassed plant manager or line supervisor.” Typically the production systems will output from their planning cycles the labour needs to achieve the plan. The next step, of assigning named workers to the demand, is often done manually, even by rote, and this has proven to be inefficient. WFM systems can take the demand forecast, skills information (held internally or by a talent management system) as well as availability information and create shifts for individual employees.
As of April 6, this will even more relevant to many manufacturers as the new working directive legislation comes into effect which theoretically enables workers to request greater flexibility in their working hours. Take, for example, a labour intensive manufacturing operation where the key production resource is human and not machine based. In addition to different skill level requirements per specific job, manufacturing systems — especially planning and scheduling components — are going to have to take ever more complex shift patterns into consideration. A recent visit to one manufacturer revealed they had in excess of 15 different weekly calendar templates in operation to cater for the different working requirements of its employees. All of this can add to the operational costs of the company and again highlights an area of potential real cost saving when HR systems are integrated tightly and smoothly with the organisation’s other IT systems.
HR solutions for merged entities
A well implemented HR system can also minimise additional costs and wrong decision making as a result of a merger or acquisition, but not completely. Human involvement is necessary, but this is constrained by the quality of information. “If visibility lies at the heart of talent management and ensuring you retain the very best employees, especially following a merger or acquisition, how is the HR director to do this when assessing employees with no hard and fast factual information?,” says Sage’s Heptonstall. Even where each company may have had an HR system in place, there is no guarantee that this provides consistent criteria for identifying employee effectiveness as different standards may have been adopted in each company. The reality is that such incompatibilities can and will occur and Heptonstall encourages people to look to the positives, saying that this provides a good opportunity for a thorough review of the new company’s HR requirements. “Manufacturers need to be open to the fact that neither legacy system may in fact be up to the challenges facing the new company, both in the short and long term.”
It would be easy to see human resource technology as a tool that primarily benefits an organisation at a management and strategy level, but HR professionals that know a key element of its success relies on the need to keep workers informed of their performance at every step of the way. Doing this can have a positive motivational impact on each worker where they can truly value their own role as well as what this means to the company. Furthermore, helping employees to see the reasons why various HR practices are important,
especially in a newly formed company where they may well be a merging of different work cultures, helps to overcome any sense of alienation by providing
consistency and a level playing field. All employees know what is expected of them and where employees believe they have a real sense of input into being the best they can be at their job, and contributing to companywide decisions, this can only be a benefit to all.