Where is India’s manufacturing sector headed? A quick reference to the India Brand Equity Foundation report will show that the five-year goal for the Indian government is to increase manufacturing’s share of gross domestic product (GDP) from 16% to 25%, creating 100 million new jobs along the way.
The goalpost appears to be far (considering that India’s manufacturing sector has stagnated at about 16% of GDP [bit.ly/2EMsne3] for over a decade). Hence a range of initiatives, like reduction in income-tax rate for micro, small and medium enterprises, investments in road, rail and port infrastructure, and incentives like free land to set up base and 24x7 power supply have been launched to set the wheels in motion.
The fact that global giants like General Electric Co., HTC Corp., Cummins Inc. and the Boeing Co. have set up manufacturing plants in the country shows that we are inching closer to achieving this goal (bit.ly/1IRbnCo). The biggest priority in the manufacturing industry now seems to be adopting transformative technologies to accelerate this growth. The speed and rigour with which manufacturing companies can inculcate robotics, automation and Big Data capabilities, and obtain talent that can adapt to these technologies as quickly will determine their success in the future.
This new phase of industrial revolution, often called Industry 4.0, has created a void for talent, especially in additive manufacturing (3D printing), augmented reality, Big Data, analytics and automation (BCG-CII-Next-Gen-Mfg-Nov-2016.pdf). This calls for young talent with new skill sets and the latest technical know-how. Acknowledging this need, manufacturing companies have started taking steps to attract and retain young people, including involving millennials in business decisions.
The focus is on preparing for a change in workforce demographics which will shift towards Gen-Y (below 35 years of age) even more. This definitely is not easy for the manufacturing industry today. The sector, though it boasts attrition rates as low as 10%, is quite behind new-age industries like information technology (IT) and professional services when it comes to attracting talent below 35 years of age. Compared to 78% in the IT industry, the percentage of Gen-Y employees in the manufacturing sector is just 57%.
Traditionally, the manufacturing industry has been synonymous with hierarchical structures and patriarchal mindsets. A deeper look at data tells us that this perception may not be unfounded. A recent study by Great Place to Work Institute conducted across 106 manufacturing companies in India involving 37,060 employees has identified the major hurdles that companies need to overcome to attract fresh and innovative talent to join them.
Known to be one of the most credible methodologies of assessing workplace cultures globally, the Great Place to Work Institute’s study looks at workplaces from employees’ perspective and assigns two-thirds weightage to the voice of employees. This is measured through anonymous surveys conducted across these organizations. The rest one-third weightage is assigned to the strength of people practices implemented across the organization, measured through responses to a structured questionnaire submitted by the organization to the Great Place to Work Institute’s team. Basis this, 25 best workplaces in the manufacturing industry were identified.
The study reveals that a young workforce (below 35 years of age) in manufacturing has a lower perception of being treated fairly regardless of their age when compared to other major industries. The positive perception around non-discrimination basis age stands only at a 73% for the younger workforce in manufacturing as against 82% in the IT industry and 80% in financial services firms. This especially becomes a hindering factor for young employees who want to contribute new ideas, but do not feel involved in the decision-making process.
Being ahead of the curve, the best workplaces in the manufacturing sector have taken the lead in introducing specific practices to attract and retain talent from the Gen-Y community. Mahindra Auto has an auto-centric quiz, “Auto Quotient", aimed at creating a strong auto-passionate community among enthusiasts in the age group of 18-35 years. Marico Ltd’s ‘campus connections’ Facebook page has a fan base of more than 76,000 students across B-schools. The organization constantly leverages the wisdom of today’s youth by crowdsourcing ideas from them.
The public sector, too, is making efforts to engage its young workforce. NTPC Ltd has an online initiative, “BRAINTICKLERS", that focuses on cross-functional collaborative innovation by providing a gamified experience of idea generation and contribution. With a lot of youngsters joining NTPC, this portal provides challenging tasks to them as well as gives them the feel of social networking.
Organizations are also taking steps to empower and involve young employees by inviting business ideas that they feel will be successful today. These practices help in dispelling the perceptions of a hierarchy-led culture and age discrimination against younger employees. Mahindra Auto has an elite group of young high-potential employees (all below the age of 35) that come together to form the “Shadow Boards", which present proposals on strategic business imperatives.
Based on the coefficient of correlation, it is interesting to see that the young workforce has a higher need to work in an organization that is perceived as a fun place to work (a challenge for the industry overall). Gen-Y in the best workplaces report a positive perception of 74% around getting opportunities to have fun at work as against 56% by their industry peers. It is perhaps no coincidence that the best workplaces consist of a higher proportion of Gen-Y employees (61%) than the rest of the workplaces (55%) in this industry.
Our research shows that apart from inclusion and respect as a full member regardless of position, the other key elements that drive retention of employees in the manufacturing industry are opportunities for career growth and care shown to them as individuals and not just as employees. With respect to career opportunities, employees at Whirlpool of India Ltd appreciate the “Young Leader’s Programme" in their organization in so many words. “Ever since I joined Whirlpool as a Young Leader, my learning curve has been steep with a well-defined path ahead. No two young leaders had the same experiences, each of us experienced a well-tailored career path, based on our aptitude, career goals (career compass) and job scopes," says one company employee.
Mahindra Susten Pvt. Ltd has “Meet the Lead", a formal platform for mentoring young employees in the organization. As a result of this targeted approach by the best workplaces, the younger population in these organizations reports a significantly higher positive perception around willingness to stay with their organization for a long time, at 79%, as against 69% for other workplaces in the industry.
Other areas where the employees in the best workplaces in manufacturing report highest positive perception as compared to their industry peers are pay parity, profit-sharing and offering unique perks, providing opportunities to have fun at work, and a fair performance evaluation system, which is also one of the chronic challenges for the industry. An inspiring example is Apollo Tyres Ltd, an organization which has achieved a high perception in distributing variable pay through a process where employees can see the comments of their reporting officers in the system as well as the detailed calculations for the variable pay.
In the rapidly evolving landscape in India, the ability to anticipate and prepare for future skill requirements and the aggregate effect on employee engagement is increasingly critical for firms to fully seize the opportunities presented by these trends and to mitigate undesirable outcomes. The best workplaces know that technology is replicable, culture is not!
Adapting to new-age technology demands, the best workplaces are not losing sight of and are, in fact, laying a lot of importance on building and strengthening workplace culture to stay relevant and competitive. Independent research affirms that organizations that are great workplaces are more successful financially and outperform standard market indices by a factor of 3-4. Nineteen of the 36 organizations identified in the research by Jim Collins based on up to 60 years of performance data published in three books—Good to Great, Great by Choice, and Built to Last—have also been identified as great workplaces by Great Place to Work Institute. Hence, we truly believe that the next few years will see ever more accelerating momentum in the sector as many of the above pieces fall in place.
Prasenjit Bhattacharya is chief executive officer and Akshita Mehta is a consultant at Great Place to Work Institute, India.
To start your organization’s journey towards creating a great place to work, apply for the best workplaces list by logging on to www.greatplacetowork.in/apply.