The ancient Chinese saying, “Give a man a fish and you will feed him for a day; teach a man to fish and you feed him for a lifetime,” stands true for a developing country like India. Fast forward to 2019 and it means providing sustainable jobs for people. In India’s industrial sector, where workforce management is still being conducted in a traditional manner, the jobs on offer to employees and salaried staff depend on managers and their level of fairness.
While this scenario by no means has any benchmark standard that can rule out unfair tactics among workforce management, how can manufacturing companies ensure fairness and proper scheduling of its workers? That’s just what American multinational workforce management software and services company Kronos aims to resolve. The company offers a suite of automated, intelligent, and innovative human capital or workforce management solutions which, it says, assist organisations in handling the employee scheduling, time and attendance, absence management, labour activities, labour compliances and analytics that gives insights on labour patterns, trends and outliers.
The company also offers a Workforce Dimension (WFD) which was recently launched that offers a breakthrough employee experience and unprecedented levels of operational insight into managing your workforce. Kronos WFD functions on a three-vector approach: ‘Work your Way, Work Smarter and Work in a Modern Cloud’, made possible through industry-first technologies and smart cloud computing. This product enables the workforce to function from remote areas with in-memory cloud computing, thereby empowering the employer with access to relevant data, on the go. WFD aggregates within its ambit - Timekeeping, Scheduling, Absence Management, Analytics, Data Collection and successfully manage workforce compliance.
Renault-Nissan Automotive India uses Kronos' automated workforce management solution.
Speaking to Autocar Professional, James Thomas, country manager, Kronos, says that in a typical manufacturing company around eight to 12 percent of expenses are related to operations; this cost usually does not include payroll expenses. He adds that the ratio keeps varying and can also be in the range of 30 to 70 percent, which is a huge expense; if not managed properly, it can lead to financial challenges for an organisation.
Solutions for the automotive industry
With increased competition in domestic as well as global markets, manufacturing companies are aggressively looking to reduce costs. As a lid cannot be kept on variable expenses like raw material cost, overhead costs or capital costs, it is imperative companies start improving their efficiencies while also controlling costs. Kronos says that in the automotive industry — from parts suppliers to original equipment manufacturers — are increasingly recognising the value of effective workforce management, as labour is one of their largest controllable expenses as well as a competitive differentiator.
The workforce management company says for collecting and tracking employee time and attendance data, paper timesheets do not cut the mustard anymore. Using home-grown systems is not only expensive to maintain, but also exposes firms to compliance risk. For this, Kronos says its solution automates the processes for capturing employee time transactions and calculating pay. This helps put an end to buddy-punching, time theft and pay premium stacking that can send labour costs soaring. Its solution also gives supervisors detailed visibility into labour costs and unscheduled overtime so they can better control labour budgets. Using decision-support tools, supervisors can create schedules that optimise the use of available labour resources and minimise reliance on last-minute, unplanned overtime.
Citing an example, Thomas says after deploying the company’s solution at a customer facility, they found that the firm was bearing a huge expense towards overtime pay despite no work overload. Kronos was able to track a trend wherein a large number of labourers were staying back each day, adding to unnecessary overtime cost. With the solution from Kronos, the OEM was able to improve worker shift management which helped the company reduce expenses.
Such measures have helped Kronos customers across the world achieve substantial savings. For instance, it helped saved around $1.3 million (Rs 10 crore) over a 12-month period for Mitsubishi Motors of North America. And in terms of ROI (Return on Investment), Volkswagen FAW was able to realise 100 percent ROI in a matter of just 12-months.
Renault-Nissan Automotive India is a Kronos client. “We were keen on a completely automated workforce management solution to manage our rapidly growing workforce, and yet maintain our high levels of efficiency and productivity. We evaluated multiple solutions and chose Kronos as its solution could accommodate all of our requirements. In addition, Kronos has an established presence in large manufacturing organisations in India, and offers best practices for global automotive companies,” said Ramuni Nair, head of Human Resources, RNAIPL.
Sharing his views on the steps taken by the organisation to cut down expenses, Thomas says, “People being taken out or employees being replaced is a common thing, because that is seen to be the easiest cost that you can cut when a downturn happens.”
“The reality to an effective people management skill is to have real-time control and understanding on shift to shift; week to week; month to month and quarter to quarter. It is easy to reduce the workforce but when the growth returns and you need to recruit again it is not as easy as letting them go. The replacement cost is not just recruitment, it includes the training costs; the skill that they have (existing employee) training on the important things. You have to understand the existing workforce that is being replaced has been a worker or an employee for you for X number of years, the attrition is going up even in these places,” explains Thomas.
Thomas believes an effective transparent solution that helps an organisation have complete automated fair control on the manner the workforce is deployed, works or get paid leave without any favouritism can not only help the company reduce cost, but also have a consistent performing workforce. When it comes to India, with its abundant workforce and an aim to become the next manufacturing hub for the globe, an effective workforce management solution could just be the ideal solution to help existing and new organisations to access a cost-effective and quality workforce, which will also be learning new skills in an era of disruption.
(This article was first published in the June 1, 2019 issue of Autocar Professional)