Increasing global competition, regulation and worker expectations are driving the need for global workforce management among multinational and international manufacturers alike.
Multinational corporations have long felt pressure to control labor expenditures and improve productivity to avoid losing business to foreign competitors with lower labor costs. Now, as local markets emerge, companies in developing nations, such as India and China, find themselves fending off competition from surrounding nations with even lower labor costs. Workforce management systems give manufacturers visibility into productivity and labor costs for production facilities worldwide.
These challenges are compounded by the complexities of compliance with an ever-growing array of international labor laws and growing employee expectations in developing economies. Global workforce management systems simplify compliance by automating manual processes. In addition, by improving productivity, workforce management systems help manufacturers grow so they can offer workers the greater opportunities, pay and benefits necessary to retain top talent.
Yet successfully implementing a global workforce management solution requires that manufacturers understand and manage the unique challenges of managing the global workforce.
Why is Global Workforce Management Challenging?
As manufacturers seek to implement global workforce management, they face three unique challenges: Cultural differences, language and currency differences and regulatory variations.
Expectations for roles within the workplace have a significant impact on the success of a workforce management implementation. For example, if a company's structure is strictly hierarchical, with rigidly defined roles and responsibilities, empowering operators with decision making authority will deliver fewer benefits than in companies with a more horizontal approach. Companies must align the tools they provide with their corporate culture or risk facing the uphill battle of changing their culture before they can benefit from the tools. Since cultures can vary from one location to the next within the same company, manufacturers must strike the right balance between standardization and localization.
Currencies and Languages
Workers and managers will need to interface with the workforce management system in the language of their choice. The system should also enable manufacturers with operations across multiple countries to make "apples-to-apples" comparisons of costs, productivity, and time. Because currency exchange rates fluctuate constantly, a global workforce management system must incorporate real-time data from online currency transfer websites.
Complying with varied international regulations in a systematic manner to avoid fines and penalties is a daunting task. The Fair Labor Standards Act in the U.S., the Factory Act in India and the Labor Law of the Peoples' Republic of China all impact how employees work, and their rights surrounding pay and required reports. Yet these laws vary widely. Understanding how these will impact staffing, time tracking as well as auditing and reporting requirements will reduce compliance exposure. Automating compliance by embedding legal requirements into scheduling and payment processes is the best way for manufacturers to ensure compliance and their ability to readily retrieve audit information.
Considerations When Implementing Workforce Management
The success of a global workforce management implementation will depend first and foremost on how well the manufacturer understands their requirements and manages expectations. In particular, they must:
Understand their Environment and Culture
Before beginning a global workforce management implementation, manufacturers need to fully understand the legal and business requirements for all countries of operation as well as the business processes they wish to automate.
Manufacturers must also be aware of cultural differences that will impact adoption. For example, workers may have some interest in automating data entry, but too much automation may be seen as invasive and evidence of management mistrust.
Be Realistic about the Rate of Change
The pace of system adoption is likely to differ from one location to the next. For example, manufacturers can't expect the same results across India, China and the United States. They therefore need to develop change management processes and set realistic expectations both locally and at corporate headquarters for how quickly they can implement workforce management.
To understand a location's ability to change, it's necessary to understand its motivations. For example, in a joint partnership between a private foreign company and a state-owned enterprise, the private company may focus on achieving high productivity and low costs while the state's priority may be full employment. Up-front agreement on goals and compromises will reduce time-to-value.
Change is Easier if Employees Share in the Benefits
Too often, companies implement systems for the right reasons, but don't educate employees on the reasons for the change or take the time to identify or explain the expected benefits. This is particularly problematic for a workforce management implementation because it often requires additional data collection, which can seem like unproductive work to an already busy employee.
To successfully adopt workforce management, management needs to over communicate what they're doing, why they're doing it and how employees will benefit. For example, if employees realize that understanding exact labor costs will improve pricing practices, resulting in more business for the factory-and thus greater job security-most employees will gladly cooperate.
What to Look for in Technology
When choosing a workforce automation system, manufacturers should look for a system that provides an immediate ROI and is easy to use:
Workforce management offers immediate ROI by enabling savings in the following areas:
- Controlling Labor Costs -- A workforce automation system lowers costs from the first clock-in by eliminating payroll inflation due to employee fraud. In addition, by automating complete payroll processes -- from gathering clock times to approval processes to sending information to the payroll processor-the system eliminates the need for supervisors to make interpretations that often favor employees and ensures strict compliance with corporate policies.
- Improving Workforce Productivity -- The highly granular information a workforce automation system provides helps managers spot waste in work processes so they can improve productivity. For example, a manager can see when workers punch in and when they actually begin work. If the time lag is excessive, the manager can investigate possible causes-perhaps workers spend too much time gathering tools before they can start work-and should implement a 5S program.
- Minimizing Compliance Risk -- A global workforce management system can capture relevant regulatory requirements up front and provide alerts to ensure that you comply with regulations consistently.
Ease of Ownership
A global workforce management system should be easy to localize, yet provide consolidated access to all information. An exception-based system that requires supervisors to take action only when they need to make a decision leaves time for more important activities. In addition, the system should be easy to operate and maintain without IT intervention whenever a change is necessary.
As manufacturers achieve access to comparable material and transportation costs in a global economy, the quality and efficiency of their workforce becomes one of their last sustainable competitive advantages. While managing people is a tremendous challenge for any company, the right workforce management system can simplify the process dramatically.
Gregg Gordon is Senior Director, Industry Marketing at Kronos Incorporated. Kronos Incorporated is a provider of workforce management solutions that enable organizations to control labor costs, minimize compliance risk, and improve workforce productivity. www.kronos.com