The Changing Face of Manufacturing: How HR Transformation Can Drive Strategic Value

changing face of manufacturing in hr

The manufacturing industry has evolved significantly in the last few decades. For manufacturers, the effects of globalization, technological development, and shifting consumer preferences has brought up new opportunities and problems.Manufacturing businesses must adopt new technology, strategies, and organizational structures to remain competitive in this ever-changing environment. HR is a crucial aspect of this shift.

Human Resources (HR) plays a critical role in businesses by managing their most valuable asset: people.HR adds value to each department in the company, and a skilled and efficient HR team plays a critical role in attracting and retaining talented employees within the company. The development of a company’s strategy is greatly aided by the involvement of HR, as they improve employees’ perceptions across the organization and create a comprehensive employee experience.

The following functions are typical of an HR, which include:

  • Talent acquisition, recruitment, selection, and onboarding
  • Employee engagement and performance management
  • Training and development

Organizational development can enhance a company’s performance during such transformations. A well-executed approach to organizational development emphasizes optimizing the utilization of a company’s workforce. It is equally vital to have excellent talent acquisition, a robust onboarding policy, and better employee engagement prospects.

A successful HR strategy takes a multi-level approach to human capital management. This involves evaluating employee satisfaction and engagement, as well as assessing the adequacy of the company’s total rewards program. Additionally, an HR must analyze strategy from an organizational perspective, considering factors like business continuity, forecasting demand, and planning for future leadership transitions. Through this process, you’ll better understand HR strategy’s critical role in shaping your organization’s overall direction and success.

How does an HR strategy change in a Manufacturing setup?

Manufacturing involves using machinery, tools, and labor to create products for either use or sale. This term can encompass a variety of human activities, from traditional handicrafts to cutting-edge technology, but is commonly associated with large-scale industrial production, where raw materials are transformed into finished goods. The manufacturing industries’ Human Resource Development (HRD) department typically handles payroll and administrative tasks and mediates between management and workers. Some important concerns in any manufacturing industry include shift changes and absenteeism. At the same time, it also becomes quite critical for the manufacturing industry to look into a diverse workforce. HR must develop innovative strategies that reflect inclusion to incorporate a diverse workforce.

According to a report in Tribune India, global manufacturing contributes around 38.5% of job roles. While India is one of the futuristic manufacturing hubs, with 17% of the nation’s GDP and over 27.3 million workers, manufacturing plays a significant role in the Indian economy. These two critical facts illustrate the manufacturing industry’s vital role in functioning the economy worldwide. It translates into developing a talent pool equipped with skills and a transformational HR industry.

As a multinational corporation with operations in more than 100 nations, GE as a global manufacturing company, is committed to fostering the potential of new hires through programs that provide extensive experience and help develop the skills necessary for long-term success. Since their history is based on lifelong learning, they invest more than $1 billion yearly in training and educational opportunities.

Manufacturing industries need human capital more than ever because of strong sales and increased investor interest as they want to become the fastest-growing service sector. The myriad of small and large industries now realizes the importance of competent human capital and its essential role in the success of their operations. Manufacturing faces significant issues in the HR department and the broader challenges of global competition, layoff, product development, and cost management. HR in the manufacturing sector needs more focused attention than ever in these rapid global market trends.

Here we put forward the various HR challenges and solutions required for an imperative HR transformation in the HR industry:

  • Employee Shortage:
    Despite rapid and sustained financial growth within the manufacturing sector, there is an unwavering concern about losing human capital in the manufacturing industry. The primary role of HR is to identify skilled laborers in the stream of the manufacturing industry quickly. Manufacturing HR must develop strategies to replace the human capital that each firm needs. With this, businesses will thrive in the competitive future and exist. An excellent strategy can help to compose a reputation as an employer of choice and talent acquisition. Manufacturing HR departments must learn to compete with other industries to begin filling their skill gaps to handle these recruitment difficulties successfully. In other words, the HR manufacturing setups should actively transform into using HCM software to engage with and attract skilled workers effectively.
  • Cost Management:
    Labor is one of the significant expenses for any organization. At the same time, staff turnover would add up to the cost-effectiveness of an organization. Given the substantial workforce shortages and recruiting abilities, minimizing attrition is crucial for manufacturing companies. Adding to the present condition of acquiring skilled labor, a subsequent layoff exacerbates HR concerns. An optimal HR strategy to effectively use training and development can assist in retaining and engaging the most valuable team members. It will be pivotal in ensuring the company has the right people to meet its goals and objectives. To incorporate a fructifying HR strategy, organizations must implement a comprehensive HRMS solution and aid in an effective cost management strategy.
  • International Competition:
    Given the marked increase in global competition, HR’s duties in manufacturing grow ever more critical and complicated. To further complicate matters, HR must take every feasible step to boost productivity and production levels to maintain competitiveness in the global marketplace. Diversity and inclusion are equally crucial in HR to develop strategies to help the organization surge productivity. With a better working environment in the competitive market, it becomes evident for the employee to explore better working opportunities. To offset the reduced labor costs experienced by foreign competition, HR must establish an engaging environment that can optimize the productivity, inventiveness, and devotion of every person inside each department.


Human Resource Management is widely recognized as an essential management aspect in any company. HR is highly regulated in the manufacturing industry, and rules are consistently applied. The role of HR is of paramount importance for apt business growth. HRD is influential in designing an organization based on its tenets and principles. A poorly designed organization can waste talent and effort, while a well-designed organization effectively utilizes its talent. With the advancement in the digital age, it should be a linear movement for the manufacturing organization to delve into HCM software. Using digital transformation in HR would benefit the eco-system of human resource development in providing innovative and effective ideas for productivity and revenue generation. Large and mid-sized manufacturing companies have realized the importance of HR transformation that would aid in moving toward the company’s goal and vision. As the manufacturing industry continues to grow, HR will play an increasingly crucial and complex role in the future. However, with careful attention and effort, HR can overcome obstacles and help the company reach new heights.

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