Human Resources is an essential part of any business, taking care of the workforce from hire to retire and all the stages in between. Technology is a critical tool in supporting these efforts, streamlining tasks like employee performance reviews, hiring, employee benefits administration, and more. What if there was a way to make those tasks easier while enabling HR to further empower and engage the workforce? There is – visibility and analysis of your data.
As automation expands across manufacturing operations, more data is being collected than ever before. Organizations are optimizing the full value of that data to make smarter business decisions and drive continuous improvement at an operational level in their businesses.
But when further examined under the lens of Human Capital Management, the data can tell another story; a people story that can help uncover opportunities for further efficiencies. Why is this so important?
It’s important because the manufacturing industry faces critical talent issues with the typical manufacturer experiencing 20%+ turnover rates, and nearly 75% of manufacturing employees report being actively disengaged.
Let’s look at how access and analysis of data can identify not only opportunities for operational improvements, but also how the data derived from workforce management technology can provide insight into talent issues so you can adapt your human capital management strategies.
Let’s consider an area of utmost importance in manufacturing, overtime, and explore in more detail how data and access to information can fuel a more strategic and efficient organization.
Overtime
In manufacturing there is good overtime – labor capacity is expanded to produce more goods or provide additional services, and bad overtime – hours that are not used productively but still incur a premium.
Workforce management data analysis can shed light onto where overtime is being used, under what conditions, and if there is room to reduce unnecessary overtime costs. But when looking at the data under the lens of human capital management, other opportunities are revealed.
For example, the amount of overtime being used each week can be reviewed and more importantly, why overtime is being leveraged instead of straight time. Is it to meet an increase in production and the additional labor is needed short term, or are there open positions that need to be filled? If there are open positions, have they been open longer than average?
Why is having access to this data critical and how does providing it to HR drive value for the organization?
Organizations must consider not just the cost to hire and recruit for jobs, but also how much is being spent on overtime during that process. If the overtime is only being used because of vacancies, emphasis can be put on hiring and recruiting at that location to reduce the time positions are open, reducing not only overall costs, but also saving supervisors time having to manage overtime schedules.
This transparency enables HR to be a better partner to operations by helping them understand the pool of labor resources available, identify opportunities to cross train, and accelerate hiring processes if and when needed.
We can also review where overtime is distributed. Data can show us what employees are working overtime and how often (over the course of a week, month, year), and what percentage of their overall pay comes from overtime. It can also show overtime use by department, job role, or a particular shift.
What insights can we gather from this data, and how do they impact HR?
When considering what employees are working overtime and when, several things should be taken into account. Let’s assume that an employee is working a considerable amount of overtime. Is it because they are the only available employee with the skills and/or certifications needed to perform that particular job? Or perhaps the supervisor is treating them more favorably when allotting hours, knowing that they want the time?
Providing this data to HR allows for the opportunity to correct any potential issues, such as:
- Accelerating the timeline to hire
- Identifying job roles that have a shortage of skilled workers available to fill them, or
- Taking steps to ensure that employees are being treated fairly with their schedules
Access to overtime data can also help HR to:
- Identify where to prioritize hiring, training, or upskilling current talent
- Strengthen the partnership with operations to fill open positions quickly, thus reducing unnecessary overtime
- Ensure employees are treated fairly when scheduling OT and minimizing risk of fatigue or burnout
The key to saving a considerable amount on overtime expenses could be as simple as training or upskilling additional employees to spread the hours where needed. The more range of skills employees have, the more flexibility managers have to place them into positions to avoid unnecessary overtime.
Human Resources has the opportunity to help foster a culture that empowers and engages the workforce. Whether hiring, training, or working to retain employees, the more data available to the department the better. Workforce management data specifically can shed light onto practices that may need improvement, aid to define more strategic training practices or identify where accelerating hiring can drive immense value by lowering overtime costs.
