While the concept of strategic human capital management (HCM) has been around for a long time, it’s surprising to me how few companies have really taken a hard look at their workforces and understood and appreciated the impact that personnel have on the success of a company
OK, so you’ve automated your factories and leaned out your supply chains. You’ve squeezed out every ounce of inefficiency. You’ve got your machines, your processes and your materials under control, and now the gains are getting harder to come by.
With the low-hanging fruit off the vine, maybe it’s time to take a closer look at more efficiently managing your labor force. Many manufacturers have put so much attention on the supply chain and supply utilization, that they’ve kind of neglected this whole workforce component.
But that is beginning to change. A variety of enterprise software vendors are taking aim at the space. HCM today is the single, fastest-growing enterprise application, with buying by manufacturers leading the surge. The worldwide market for human capital management software grew by 16% in 2006 to $6.3b, up from $5.4b in 2005. Analysts project that it will grow by an 11% GAGR through 2011, when it will be more than a $10b market,” adds Degnan Manning. Around 50% of the market is driven by manufacturing companies, which are increasingly waking up to the software’s advantages.
Vendors typically divide workforce management into three core categories.
- The first is time and attendance, which is a traditional, yet critical, part of a comprehensive workforce management package
- The second is scheduling, which builds upon the information available from having the payroll process 100 percent automated. As part of the system, buyers have access to this very robust, very granular pool of data, so you can do more. Organizations can better understand who is doing what, who has what skill sets, their availability and their current overtime status, so it allows you to schedule more effectively
- Layered on top is the third piece—reporting and analytics—which enables more advanced activities. Through analytics and reporting, a manufacturer might discover inefficiencies that would otherwise go undetected. For example, if a report shows a significant delta between the time employees clock in at the front gate and the time they clock in to actually begin work on a job, that could provide an area for investigation. Are work orders not ready for employees when they get to their workstations? Are other factors involved?
Even without the analytics, converting from a manual time and attendance system to an automated system can produce lost-time savings. Employees find it’s fairly easy to write on their timecard that they came in at 6 and left at 6, and took a 30-minute lunch. But there’s no validation of that..a longer lunch break or a late arrival for work would not necessarily be captured.