Attracting and retaining talent in manufacturing SME’s: challenges and how to overcome them…

I was speaking to a CEO of a family owned manufacturing business. Her biggest bottleneck for growth was not investment, but the resources. Their plants they are located in non-metro, their products are well received by both domestic and international markets. However the most exacerbating challenge has been finding and retaining the right talent. Even if they have been successful in hiring a good candidate, spousal considerations would see the resource walking away to denser pastures. For those running their businesses in metros the challenges remain same.  A defence technology company with their plants in Electronics city Bangalore finds attracting shop floor and dirty your hand innovation oriented engineers come hard by when deluged with offers from software counterparts. If they have been successful in hiring, guiding and training them, just when they are turning to be valuable they find the resources moving onto higher pay pockets and join larger brands including MNC’s.  In short, many of the manufacturing SME end up being the training shops for larger companies to poach industry prepared resources. Major challenge is not just to attract junior resources, but also middle and senior management. Unlike IT and other industries, crossover to manufacturing is limited because of perception and other issues.

Manufacturing SME face several challenges in hiring entry level resources. Biggest hurdle is expectation mismatch.  For the theoretical knowledge most possess and limited practical experience, meeting their expectations on pay front is a challenge. Second is locational flexibility. Many of them would love to work in Metros and better equipped areas.  Third is the employee growth prospect, especially exposure to foreign markets, an incentive their counterparts in IT and other services industries have an access to.

On the middle and senior management front, paucity of next line of leadership is a major issue. While many companies have various types of employee development programs, very few of them help in creating a pool of leaders. A challenge grapple is how to turn career “managers” from short-haul oriented, self-centred individuals to leaders.

Entry level hiring and retention is best addressed by adopting one of the following. Create a 2 or 3 year fellowship to attract students from challenged backgrounds and less endowed college campuses.  Design fellowship program to include induction, in class training, cross function training and on the job training. Incentivize junior resources with adequate compensation during the fellowship period. Move the resources after one quarter of fellowship training to design and shop floor and place them under the guidance of a committed senior professional. This is a proven strategy to attract and reduce attrition at lower levels. The complete program has to be conceptualized and positioned above the Apprenticeship Program, Ministry of Labour to reduce management cost of administering the program, gain flexibility and attract right resources. In parallel, offer short-term projects to graduate and undergraduate from nearby institutes as a part of their regular curriculum and for their long-term projects.  Ideally choose a less endowed institution that is yet to make a mark and is finding placements records difficult to achieve.   Success of these programs depends on planning ahead what courses to engage with and what specific projects would have higher ROI. This is not just an effective strategy to engage junior resources, but would prove quite useful in exploiting open innovation. Identify key areas of technology challenge and offer them as a contest where faculty and the students from various institutions can participate. Smarter manufacturing SME can align their requirements within the ambit of several government programs on innovation and industry-institute interactions. Such an approach can also yield higher branding opportunities for the company at no cost and succeed in attracting the right talent.

Middle and senior management capabilities can be best served by growing leaders internally or using other platforms such as “Faculty immersion”, or “interim Manager” programs. Attitude to learn and own are the key elements when selecting internal resources for leadership development. Growing internal resources requires thorough planning, and high intensity of follow through. Identify and develop potential leaders, look for obvious signs of quality of work, sense of ownership of team, quality of feedbacks to colleagues, penchant to DIM (do it myself), initiative for breaks with team, etc.   Assess their skills and capabilities, and identify right intervention strategies. Support them with mentors (either internal or external). Alternately, move them to different functions and expose them to other markets or Executive programs.

Many institutes and colleges goad their faculty to gain valuable practical experience and enliven their class room with rich industry knowledge. Faculty immersion programs works best in quality, scheduling, materials, and supply chain and marketing areas. Offer willing faculty appropriate fee to incentivize them to learn and transfer the skill internally.  Explore opportunities to get federal and state funds for plant and quality improvement programs such as ISO certifications and others so that cost for the company can minimized and faculty involved is better incentivized. Externally funded programs also offer the additional advantage of no cost marketing.

Many qualified and able professionals may have retired from active duty, but can be extremely valuable sources of leadership and capability development for SME. Devise programs to on board willing and able experienced professionals as “interim general managers” or “Interim leaders”.  Define explicitly the hand holding they would do for your internal resources, prioritize maximum 2-3 areas where they would be involved and outcomes that may be achieved. Celebrate the milestones achieved, involve them in capability development and expansion. In the end, attracting and retaining resources in manufacturing SME requires the company to be creative in its recruitment methods and flexible in the immersion and exploitation of the skills.  Rejig your HR from a passive support organization to proactive outcome driven function. Enable mechanisms to engage and exploit open innovation.

Dr T R Madan Mohan

How to improve your execution excellence

Strategy making is a grandiose and heady affair, but by itself does not guarantee successful outcomes. While many attribute successful outcome to grand strategy, seasoned professionals realize execution excellence is what determines the quality of outcome. Execution excellence is a result of loads of commonsense and stick to basics program. In all its simplicity, a solid execution excellence is all about plan-do-act-review and revisit of efforts required to meet the outcomes. Reams have been written about planning, review and control acts of effective execution. I would rather share insights gained by working with some of our client organizations. From a business program perspective, always choose just 3 or 4 objectives that matter to your company. Chasing too many objectives would prove to be counterproductive. Define how each of these objectives would be measured both in terms of financial and non-financial indicators. Also remember, some of the measures may be long term, may emerge only when certain priorities are fulfilled. Align your senior management roles and vision with their respective objectives. Do not attempt to formalize too many things. Processes and systems are fine, they should not be rigid and stifling the initiative and creative solutions that need to emerge at various levels. Communicate to all involved in the transition, the outcomes, expectations and the head rooms (remember Murphy’s law) so that there is enough flexibility to fail, learn and grow. Bean counting beyond a certain level may be an excellent academic big data project, but may not have high ROI from company’s perspective. Ensure the process and systems build allow one to manage root causes broad enough to impact revenue and customer satisfaction.  Communication is the biggest culprit that can affect execution excellence. Insufficient communications, iterative communications with changing goal posts and too implicit communication affect the outcomes. Contradicting communications from senior management and conflicting directions during the midcourse have derailed many a successful programs. Get communication strategy right from how and what to inform, how and whom to influence and finally how to gain advocacy for program must be thought through in detail. Ensure adherence and buy-in from all senior management about communication strategy. People are the key to execution excellence. Some many exit the program citing long haul of change, some may not know how to transition to new role and expectations and so on. Effective use of praise, promotion, handshakes and pat on back for failing and emerging strong must be employed at all levels. In many a program, it is certainly the wins at middle and lower ends that define the momentum of the program. Ensure small wins and headwinds are celebrated. While many companies commit the training and support required for the people, inability of the senior management in letting go of B & C responsibilities hurt the outcomes. Create inclusive mechanisms such as executive council or Program committee to broad base ownership, innovation and results management. Successful working of these mechanisms is key to execution excellence.

Dr TR Madan Mohan