HR Value to Manufacturing Businesses
Don’t dismiss HR value to manufacturing businesses, HR can efficiently manage your common HR problems such as frequent and high absence rates, poor performance and skills shortage. Employees frequently breach health and safety requirements in the manufacturing industry which results in your managers having to deal with timely formal disciplinary procedures.
The manufacturing industry contributes £6.7 trillion to the global economy and the UK has the 11th largest manufacturing industry in the world. With manufacturing making up 11% of the UK’s GVA and employing 2.6 million people, the industry is a vital part of our economy.
The 2016 Annual Manufacturing Report produced by Hennik Research and released in November 2015 outlines a range trends, as well as widespread optimism about the future of the sector (85% said they were either ‘very’ or ‘quite’ optimistic, the highest figure since the report was launched in 2008) – and HR can play a vital part in ensuring this successful future.
Minimising the manufacturing sector’s skills shortage
According to the Hennik Research report, and leading industry publication The Manufacturer (http://www.themanufacturer.com/uk-manufacturing-statistics/), it is apparent that UK manufacturing needs more skilled workers with 84% of respondents to the 2016 Manufacturing Report noting that they had multiple vacancies and more than a fifth (22%) said that they had 10 or more. The overwhelming majority offer apprenticeships, but just over a quarter (26%) do not, however, the majority of those who currently don’t have apprentices indicated that they plan to offer them in the future. HR value to manufacturing businesses is evident when seeking to implement apprenticeships within your operation.
Don’t dismiss the value HR adds to the manufacturing industry, here’s how effective HR can help?
Supporting employers to transfer knowledge to younger workers, particularly via apprenticeships will be key to the future of the industry. It’s essential for employers not only to offer apprenticeships but to ensure that there is the correct legal wording in all Apprenticeship Agreements to make sure it benefits both the apprentice and employer. A failure to provide the correct wording will result in more onerous legal obligations being placed on the employer, which will result in higher costs – so any budget spent on HR support will be recouped in the medium term.
Developing and implementing policies effectively
Do you know the HR value to manufacturing businesses? Lack of legal compliance, mistakes in or inappropriate or insufficient policies, contracts and paperwork in areas employment law, working hours, Health & Safety, environmental issues and energy consumption can lead to costly and time consuming challenges. Ensuring that all legal requirements are adhered to and essential policies are in place is a core role of HR and will benefit any firm’s bottom line.
For example, employment policies can add value to your business by managing your employees more efficiently and more effectively, like dealing fairly with those employees that breach health & safety regulations or have persistent short term absence. Additionally these policies help to set expected levels of standards which again increases efficiency, improves employee engagement and reduces the requirement of formal processes which are time consuming and which directly impact upon production levels. Finding an experienced HR professional to deal with these issues will provide a backbone and structure to your organisation from which to springboard further success.
Technological developments: Automation, productivity and servitization
The manufacturing sector has always been a hotbed for an increasing range of technological advancements. For example, the 2016 Annual Manufacturing Report outlined that just under two-thirds of UK manufacturing businesses had committed to major automation projects in the past two years and 61% of respondents said they were spending more than last year on ICT. In 2013 the UK Government’s Foresight Report on the Future of Manufacturing identified servitization* as a core element in its vision for the future of manufacturing, and that has held true with regularly cited examples like Rolls Royce, IBM and Damen Shipyards that are held up as successful examples of integrating services into their business, and that illustrate the transformation that a business needs to make to be successful in this arena.
Know your legal risks!
All of the above are significant statistics and, although these are extremely positive steps for the individual companies and will lead to an increase the productivity and competitiveness of the firms involved, as a result of these projects many employees across the UK are at risk of redundancy or retraining. Any business needs to consider how to legally reduce the headcount in a particular department where new technology has been introduced and to identify and manage whoever will operate that technology. The ability to manage the redundancy – or perhaps retraining – process in a legally compliant and efficient manner is a key HR activity and one that is vital for any firm’s success.
Organisations may also need to recruit, if the new technology or service offerings need to be delivered/operated/developed and the existing workforce cannot be retrained into those roles. Both the industry publication HR Review and ACAS (the Advisory, Conciliation and Arbitration Service) note that replacing an employee can cost as much as £30,000, so it’s a process that you will want to have specialist HR support on!
Deciding on external HR support
Many companies can be cautious when deciding to outsource their HR support, considering that the mangers that they currently employ can deliver an effective HR policy. However excellent these managers are within their roles, it is worth considering a few key questions before you make your final decision on HR delivery:
- Are your managers really working efficiently for the company when they are dealing with employee related HR problems that take them away from their primary role?
- Are they legally up to date with the way they manage employees?
- Are the documents they use legally compliant?
- Would they rather be doing their own role?
- Have you identified the ‘HR Value to Manufacturing Businesses’?
After you’ve answered these you’d like to consider some external HR support then, please just get in touch today and call 01455 231982.
*Servitization is the innovation of an organisations capabilities and processes to shift from purely selling products, to selling integrated products and services that deliver real value in their use: The Manufacturer, 2016, http://www.themanufacturer.com/articles/servitization-whats-it-all-about/