NGM Study findings on human-capital strategies and practices and what it takes to make them world-class
Manufacturers recognize the importance of human-capital acquisition, development, and retention but few have the systems in place to achieve world-class status. Of the manufacturers surveyed, only 30% reported they are near or at world-class human-capital management.
Three elements are necessary in human-capital management:
• Company-specific strategy with full-functional involvement and buy-in
• Talent and talent-development programs
• Capable business systems and equipment
Although nearly half of manufacturers believe human-capital is highly important to their organization’s success, many do not have the systems fully in place to drive world-class human-capital management. Over 50% of manufacturers have a company-specific strategy for human-capital management, but only 13% define that strategy as having full functional involvement and buy-in. This could hinder the strategy’s success in the future and affect the ability of manufacturers to achieve their human capital goals.
A majority of manufacturers report they have sufficient talent, but they may have trouble developing talent in the future. While 57% report sufficient talent, only 29% have talent-development programs. The scarcity of talent that could face next generation manufacturers is already proving to be a challenge for a large minority (43%) and 33% of manufacturers have neither sufficient talent nor talent-development programs. This could prove to be one of the greatest challenges facing manufacturers if firms are unable to fill important positions and lack the necessary programs to develop talent within the company.
Business systems and equipment are capable of supporting the needs of most manufacturers right now, but not long term. Just 9% of manufacturers report that their business systems and equipment are state-of-the-art and can support human-capital management long term. A majority (58%) are able to meet current requirements, while one third have either inadequate systems and equipment or none at all.
Manufacturers who consider their human-capital management processes to be near or at world-class status share a number of characteristics. They are more likely to consider human-capital management as highly important and more likely to have a company-specific strategy with full functional involvement and buy-in. Many accurately assess employee’s skill levels, identify the skills necessary for organizational success, and then focus training on closing gaps between the two.
World-class processes yield a higher proportion of employees with capabilities to excel in high performance work teams (70%). These companies typically train their employees more than 20 hours annually and have accurate monitoring and review methods to determine the return from human-capital management. Companies at or near world-class status are ten percent more likely to have value-added per employee of more than $125,000 and have lower turnover rates than companies furthest from world-class human-capital management.
IMEC and its partners offer a variety of human resources assistance. An IMEC representative will help determine what areas have room for the most improvement and create a plan of action for your company. For further information about IMEC’s services contact one of our industry specialists. You may also want to consult a Workforce Readiness article on the IMEC website.
