2. Peter Rowley
Human Capital Management Strategy Director
Foreword
The world of work is changing at an alarming pace but none more so than in the Manufacturing
sector where the pace of change required to simply stand-still for another year is at a frightening
speed. Just the mere mention of Industry 4.0 just serves to remind us of the rate of change and
transformation which the industry is experiencing.
To help gain and share greater insight into your HR community perspective in Manufacturing, Oracle
recently undertook a survey to unearth some of the trends within the Industry, these insights are of
great value and we are delighted to share these with you. I wish to thank profusely all of those who
have helped pull these insights together. These people are all engaging with those at the coal-face
in the manufacturing world every day, so we value their insight. However, most thanks must go to
all the participants who have taken the time to contribute insight and allow us to share the bigger
picture. Thank you so much.
At a glance some of the key observations, which are fleshed out in greater detail below in the
report, include the following aspects.
3. Driving Efficiency
With the backdrop of Industry 4.0, how do we help employees become the best versions of themselves and
maximise employee productivity and output? Many are concerned about how their organisations will engage
with and leverage Artificial or Adaptive Intelligence (AI), Machine Learning, and Robotic Process Automation
(RPA). Additionally, Internet of Things (IoT) is now reaching into the world of Health and Safety and acting as an
advance warning system on process and safety. Many of them are asking themselves hard questions about how
ready they are for emerging technologies. They know it is no longer a question of “if but when” and assessing
our people and organisational preparedness, knowledge, skills and experience for adopting these technologies.
Engagement
Highly correlated to efficiency is that old chestnut - Engagement. Thankfully, many of the HR professionals in our
survey are reporting positive engagement numbers although 40% are suggesting that there is still significant
room for improvement on engagement. However, for me one of the key elements of understanding engagement
is not just the number on the dial but what form of engagement is at play in the specific enterprise. I often draw
insight from a recent research piece “Shades of Grey: An exploratory study of engagement in work teams” in
which the authors narrowed Engagement spectrum down to four very specific forms. The research, by Ashridge
Executive Education, Engage for Success and Oracle is just hot-off-the-press and makes really compelling
reading for those of you concerned by enterprise engagement.
EmployeeTurnover
Again, a clear by-product of engagement is employee-turnover. Thankfully, many of the respondents (in excess
of 80%) are in a position to say they are confident that they can capture the reasons why the employees leave
which helps underpin their retention strategies. However, for many of them the challenge remains to extract
insight from a lot of data, much of it unstructured. Enter the field of data analytics and how organisations can
leverage better insight quickly.
Learning and Development
In manufacturing, many of our clients are clearly well versed with the criticality of Learning and Development
in underpinning their survival strategies. Over 30% of the HR Directors think that Learning and Development
needs to be improved. Again, given to ongoing march of Industry 4.0 many enterprises are assessing their
readiness, and that of their employees for engaging with ML, AI, RPA, etc. What impact do these have on future
Workforce planning – what are the implications for buying-in or building new competencies and skills. Skills
gaps are widening faster so many CHROs now appreciate the imperative for new Learning technologies and
social learning platforms which can accelerate the pace of Learning and narrow the skills gap.
Talent Acquisition
This presented the biggest surprise for us as many of our prospects are in the market looking at how they can cut
hiring cost radically – over 80% are still reporting a high-level of dependency and use of recruitment companies.
Thankfully, many equally realise the massive potential for cost-saving if they can turn the dial down and lessen
reliability on external recruiters. Massive advances have occurred in the adoption of AI and ML into our own
Talent Acquisition solutions which enable users to have the combination of reach and great engagement while
leveraging Adoptive Intelligence to maximise the ability to intelligently screen.
HRIS
Finally, it is interesting to note that in excess of 40% of those surveyed have had no change to their overall HRIS
landscape over a three-year period. What this means however, is that the pace of change in HRIS has sped up
significantly and for many, gone are the days of a buying a HR solution that would drive your business for 10-15
years.
4. Engagement of the workforce
Starting with the engagement of
the workforce, employers clearly
understand the benefits of having an
engaged workforce, citing improved
collaboration, operational efficiency,
better business performance, and
improved customer service as
direct benefits of strong employee
engagement.
Fromthesurvey, 64%ofthemfeelthat
their current workforce is engaged –
i.e. feel passionate about their work,
are committed to the organisation
and put effort in their work. A lot of
research has been performed on
the impact of an engaged workforce
and the importance of employee
engagement can’t be overstated or
underestimated. Employee
engagement strategies have been
proven to reduce staff turnover,
improve productivity and efficiency,
retain customers at a higher rate and
help generate higher profits. Most
importantly engaged employees are
happier. So, for the remaining 36%,
this is where the true test will be:
understanding what engages their
workforce and how they address
this.
64% thinkthattheir workforceis engaged
5. Why do employees leave
Organisations?
Effective retention strategies often begin during
the employee recruitment process. Employees
are more inclined to remain with a company that
fulfils the promise made when their employment
offer was extended. Companies that provide a
realistic view of their corporate environment,
advancement opportunities and job expectations
to new hires can positively influence employee
retention. In our ever-changing world it’s
important to remember that your new hire will
be judging the organisation long before you can
assess their performance, so it is vital to get their
journey with you off to a positive start.
A very large majority (86%) of the HR directors
advised that they can capture the reasons as to
why employees leave their organisation. This is
a positive finding, meaning they can collate
information and act accordingly. Enhancing the
employee experience can help retain your staff
and save you on average 50-60% of the
employee’s salary per hire, so capturing this
information is vital to help you build your retention
strategy. The top five reasons why employees
decide to leave an organisation are the following:
the lack of vision from the organisation, the lack
of recognition and appreciation of their work,
the inadequate opportunities for development,
the financial insecurity and the failure to listen to
employees’ opinions.1
86%cancapturethereasons
whytheemployees leave
1
https://www.insightsforprofessionals.com/blog/8-reasons-why-your-employees-are-leaving
6. Performance reviews
When it comes to performance reviews
change is upon us as organisations are
moving towards a more collaborative and
flexible approach, designed to ensure that
employees have complete transparency on
how they are tracking against their goals at
any point in time. Companies are noticing
these trends and that we are also living in an
age where instant gratification is expected.
If organisations want their employees
engaged, performance reviews should be
carried out frequently. Employees want
more feedback from their management
about their work and they want to
understand how to improve themselves
quickly. Performance reviews carried out
more frequently will boost engagement
from the employees, reduce turnover and
increase the organisations productivity.
Having better quality conversations with
your employees will make them feel valued,
we’ve all been in that appraisal where you’ve
been asked; “Where do you see yourself in
5 years’ time?”; it’s a painful one to answer.
Now imagine the appraisal taking place
where the employee has already indicated
where they want to be and what their
aspirations are, by utilising a modern
HRIS. The line manager can access this
information prior to the appraisal and tailor
the conversation specifically to the individual
where a much more valuable conversation
will take place. This will have a positive
impact for all involved.
54%arereviewingemployees’
performanceoncea year
7. Recruitment
The recruitment of talent is one of the most
important engines within any organisation. The
benefits of having an internal recruiting strategy are
numerous. The main benefit is that, thanks to in-
house recruitment, the recruiters and organisation
know exactly what they need and what kind of
people they need to fit in with the values and
culture that they require. The other advantage of
in-house recruitment is that it is much less costly
for recruiting large numbers of people compared
to a recruitment agency. Besides that, easy and
user-friendly systems exist enabling you to go
through the in-house recruitment process more
efficiently than you may think.
Currently, many organisations are using
recruitment agencies which we know can be
incredibly costly and not always give get the
results you are desired. The recruitment of new
hires includes the posting of jobs, shortlisting,
meeting the candidates and interviewing them.
Lots of different and more cost-effective ways
exist, such as staff referral schemes etc.
83% of Organisations surveyed, declared that they
use the services of agencies to recruit new hires.
Recruiters opt to work with agencies for saving
time with interviews and avoid administrative
work, advertise roles online and even negotiate
salaries. However, outsourcing roles ultimately
comes with a hefty price tag, which could be
better used in other areas.
83%Arecurrentlyusing recruitmentagencies
8. Areas for improvement
More and more organisations focus on Continuous Improvement as a way to stay competitive. We
are continuously seeing a change in attitude towards HR departments and what they can bring to the
table. The benefits of continuous improvement are several from; streamlining the workflows, reducing
costs and increasing efficiency. In HR, continuous improvement helps to drive more commitment and
engagement from employees, improve relationships and increase productivity.
Adaptability is increasingly important, evident from the fact that 52% of the Fortune 500 companies
from the year 2000 no longer exist! Adaptability is a concern for all departments and is one of the
factors driving competitiveness of organisations. Indeed, organisations succeeding at adapting their
products and services to the market’s trends is proof that adaptability is a crucial.
For HR directors, the number one area which could
be improved according to the survey is Employee
engagement. Even though most HR professionals
said that they feel that their workforce is engaged,
they still think that there is room for improvement.
Employee engagement can improve the efficiency
and morale of your staff and we should always
look at improving the way we work and collaborate
to help improve results. More initiatives should
be launched to engage your people, whether
this is having a solid Learning and Development
path or a wellness imitative for your employees.
Transparency and honesty from an organisation
impact engagement. Organisations can offer this
transparency through its systems.
The improvement of your Learning and
Development (LandD) strategy will enable your
employees to achieve career goals and improve
individual performance. With the ever-changing
workforce, your employees will expect to have
updates and visibility of their performance in “real
time” as the need for instant gratification ison
the rise. The improvement of LandD can have a
significant and positive impact on the engagement
of your workforce, which will give them a sense
of consideration and care. Organisations must
give the opportunity to the employees to learn
the skills that are needed to achieve their personal
targets and give them the visibility to check in on
their own individual progress at any given time.
31%Thinkthatlearningand
developmentcanbe improved
40%Thinkthatemployee
engagementcanbeimproved
9. The modernisation of HR systems is an important
matter in every organisation. Modernisation of
systems enables you to increase the motivation of
employees in ways we have previously outlined.
Today we are talking more and more about
employee experience. The modernisation of
your HR system enables you to create a positive
and engaging employee experience. Employee
experience starts before potential candidates/
employees join the organisation right until the
day they may leave. A modern HR system will
help enhance employee experience by e.g. giving
the employees the possibility to give and get
feedback from management, reviewing packages
of benefits, identifying the employees suitable for
certain learning opportunities.
Besides the increase in motivation and
engagement of employees, the modernisation of
HR systems will enable employees and managers
to get access to data in real-time. Modernisation
of the HR systems can help you cut costs and
streamline outdated workflows, enabling HR to
truly become a strategic arm to the organisation.
43%haven’tupdatedHR
systemswithinthelast 3years
Modernisation
and Why it is Important
10. Brexit Concerns
Although uncertainty remains about the ultimate
outcomes, it’s clear that Brexitwillhave significant
repercussions, both positive and negative for the
manufacturing sector.
According to Henry Anson, editor of the
Manufacturer Magazine, “The manufacturing
sector is highly resilient and will now focus on
how to make the most of the opportunities that
Brexit creates.” HR has a crucial role to play in
implementing Brexit strategy, where people
issues will rank highly among the practical
implications.
Competition is likely to increase. For example,
Sterling’s fall in value relative to major currencies
has increased export competitiveness, but has
also increased imported component prices,
bringing additional cost. Moreover, the potential
imposition of tariffs will be a challenge in terms of
destination markets for industrial goods and for
imports—but also for the complex supply chains
through which components are sourced inside or
outside the EU. Manufacturing companies which
rely on the availability of a skilled workforce are
also likely to suffer if immigration controls restrict
their ability to secure necessary skills.
11. Improve the engagement with your employees.
Engagement can be achieved by making feel them
better for coming at work. This can be achieved
thanks to great employee experience from the
onboarding of the employee until the leave of the
employee. Employee experience can be improved
thanks to HCM systems to streamline processes and
make complex tasks easy.
Regarding the gathering of the reasons why the
employees leave, HCM systems can make this task
much easier. The HCM systems will enable you to
capture these reasons in real-time through surveys
and to be able to react more quickly.
Performance reviews should be done more
frequently. The performance reviews will enable you
to have a quicker feedback from the employees
on their performance. This shorten time could also
improve employee engagement as it would make
them feel more valued andcared about.
In-house recruitment should be strongly considered.
This kind of recruitment will save you cost, time and
most of all enable you to hire the right talent foryour
company.
Learning and Development should be highly
considered as the skills gap in manufacturing industry
is increasing. Competition and New Technologies
(e.g. AI, Robotics, Blockchain) are creating new needs
in hard skills. This means that companies will have to
teach these skills to their employees to keep them
employable. Besides the skills gap, the Learning
and Development area is a key point for employee
engagement, as the employees are looking for
learning every-day. This area will be a crucial point for
new generations coming (Yand Z).
Companies must consider the modernisation of their
HR systems. Today, HR systems allow companies to
attract talents, recruit, train and keep them. This
attraction of talent is one source of competitiveness of
companies. Besides the talent question, modernised
systems enable to have real-time data allowing you
to make quicker decisions.
Action Plan
Conclusion
As we have discovered, engagement from the workforce is an important concern of our interviewees.
This drives the efficiency of every company, which means that if the employees feel good in their
organisation, they will give their best each day. Moreover, the engagement of the employee finds
its origin in the trust, integrity and communication between the organisation and its’ employees.
Engagement from the workforce is critical and will be even more critical for the years to come. Those
interviewed believe it’s a key area and also an area which can be improved.
Besides employee engagement, performance management constitutes another concern for
organisations. In this survey, all interviewees carry out performance reviews, meaning that managers
and employees work together to plan, monitor and review employee’s work objectives and overall
contribution to the organisation.This concern is one with highest importance for HR and performance
of the employees has been cited as an area of improvement for a large number surveyed.
Finally, recruitment is a big concern for the organisations surveyed. Many organisations will need to
recruit talent with the right skills. This will be a challenge for the coming years as the job market is
ever changing with new disruptive technologies.
12. About Oracle
Oracle provides essential elements for companies
to pioneer innovations and drive new business
models. For example, applications based on artificial
intelligence (AI) can suggest the next best actions,
automate answers, and provide personalized
service. Oracle embeds machine learning into
several management and security offerings to help
monitor, troubleshoot, and predict potential outages
and security breaches. We enable automated but
personalized interactions across our applications
via digital assistants - and we’ve integrated AI into
analytics to help discover hidden patterns. Oracle
is the #1 provider of HCM software, with a broad
portfolio of solutions for companies of all sizes.
https://www.oracle.com/applications/human-capital-management/
References
Engagement Shades - http://hultmedia.ef-cdn.com/~/media/hultedu/executive-education/research/shades%20of%20grey.pdf?la=en
Employees Leaving - www.insightsforprofessionals.com/blog/8-reasons-why-your-employees-are-leaving
13. Kelvin Page
HR Technology and
Transformation Specialist
Adrien Orban is part of the Digital Specialist Program
at Oracle.
Previously, he has worked as a project and change
manager for SWIFT. Besides that, he has been a
market research consultant and has worked with
multi-size organisations to help them develop their
strategies.
You can find Adrien on LinkedIn -
https://www.linkedin.com/in/adrien-orban-36886377/
About the Authors
Kelvin Page is a HR Technology and change specialist
at Oracle, specifically focussing on strategic HR
projects within the Manufacturing industry who
assists and directs organisations with change
management.
He is on a mission to help SMEs grow, transform
and adapt to the changing world of work and open
the eyes to what might change in the near future.
Youcan find Kelvin on LinkedIn -
https://www.linkedin.com/in/kelvinpage/
Adrien Orban
Digital Specialist
