Dear Colleague,
The views given by our Colleagues are very valid and very good insights given. It was a good learning for me too. Kindly read my sharing as below in addition to those views and suggestions:
Similarly, you will have your own good insight and expertise in this area of operation technically which will be helpful in addition to the sharing.
As far as Manufacturing Industries are concerned, in my over 30 plus years of HR work in several group companies in Manufacturing, we traditionally follow the pattern of a Pyramid structure. The Ratio of bottom line will be thick whereas once move upward the ratio is thin. In Top most level the number is very much less and countable. As far as cost is concerned the upper layers will be more cost oriented than the lower levels.
In your case where in you have been working in a heavy construction equipment manufacturing company (OEM) as a corporate HR having employee strength approx. 3500 employees including contractual workers. You have been asked by the management to prepare the trend of management to staff ratio in manufacturing industries in India.
e.g Sr. level Management ratio
Middle level management ratio
Junior level Management ratio
Staff ratio
Contractual workers ratio
I strongly believe, out of my personal experience each organization's Talent Count is to be determined only based on internal bench marking and by doing a quick internal Industrial Engineering Study. Whatever sector in Manufacturing when you compare externally it may not be really going to help you as it will be a futile exercise. The main reasons are difference in-terms of :
- Lay out of your Factory/Factories
-Technology adopted
-Production Flow and Process you flow
-Skill Level of the Talents
-Support Technology provided for Business Function ( Digital Operations Vs Manual)
-Level of Automation and use of Modern Production Technology adopted and such other factors
Hence there is no ready made solution to arrive the number but to work internally. I will share how we did long back before several years back and how we approached, which will some good insight to you for your use. More or less we worked in similar assignments and started without knowing the starting end of the thread.
We worked like this in sequence:
1. Formation of TT: Later we formed a Task Team ( TT) involving the Plant Head+ Plant HR Head+ Plant Finance Head + Plant Operations Head + 4 Members from Shop Floor.
2. Mapping Matrix of Work Process (MWP) : The TT visited each machine by machine, section by section, department by department, function by function for 3 months time dedicated and mapped all the Work flow - Level of Automation- Further scope for Automation - Technology and list of Operational Jobs involving Manual work which got further divided into Core ( affecting quality) and non core( not impacting quality)
3. Mostly this was done in simple Excel by one key Engineer after taking inputs of TT and Plant Operations Head - Work Flow involving manual work - Man hours required to complete the task- Manpower required based on the past Production data etc
4. Talent Table : Then the Table - Current Number - Proposed Number for next 2 years - Ambition Number Level 1(Post automation level 1 which are already in progress and in pipe line) Ambition Number 2 ( Post automation level 2- possible future automations)
5. Bench Mark Reference : We also collected the number and ration of Similar Industries through our Manufactures Association for only a reference point or calibration
6. Now the Spread Sheet was ready with all required data
7. Then the Corporate Team and TT sat together and listed the ration and as an out come the ration covered the Brain Work - Execution Work - Manual Work Core - Manual Work - Supportive
8. We had more than 8 to 10 joint meetings and some time we involved Trade Union Leaders also in the sitting and strengthen the spread sheet.
9. Broadly we arrived a ratio based on a concept called " Profit Per Employee" ( PPE) for all levels upto Senior Management starting from so called blue-collar
10. Roughly ( which may be different for your organization) as a joint decision we arrived a number that overall 15% was on the Senior Management Level 35 % in the Execution Level and all On -Roll Executives (We converted all Staff to Executive Level) and these numbers are direct employees comprising Permanent Workmen, Executive and upto Senior Management level. Then the TT recommended 35% Contract Workers and 15% Flexi Staff ( on-call only based on orders for production from Sales Team) This was decided as a midterm solution and the Group wanted to go-in for a full fledged Manpower Bench Marking study involving MNC Consultants who are experts in this area which is still not done I suppose as the cost involved is huge and huge.
11. At that time for that business module of that Unit/ Organization the ratio arrived by the TT was approximately out of 100% of Talent Count the ratio was 25% of Business Functions - Finance, Supply Chain, HR, Administration, QA and similar. Then 75% on the Operation and Sales & Marketing, R&D and new Products which were Revenue Generating Departments. But the real challenge came up later was there were many disagreements from Unit Heads/ HODs /Union and here and there lot of modifications were done to buy their agreement
12. At that time the Units were given target to work on Ambition Numbers constantly and to work towards possible automation by Capex Projects in Production Line to make the work flow simpler/automated.
I also share few good articles related to this subject.
https://www.onlineclothingstudy.com/...ine-ratio.html
https://www.investopedia.com/terms/r...eremployee.asp
To sum up, overall- like a Finger-Print, the Organization under discussion needs to frame internal strategy considering different Check Points like Business Module, Business Objectives, Level of Automation, Nature of Technology, People Philosophy, Short Term and Long Term Business goals, Proposed Future Technology, Industrial Relations , Profit per Employee targeted etc and then work on a sound strategy to arrive the ration/ number in a befitting manner. Another possibility is to quickly check with cluster Industries of similar nature of manufacturing (and if any Employers Association to use for help ) and to collect the ratio/ numbers for refence point.
This will be a very good exercise helping the Business and People for profit and progress
All the Best and God Bless,
Dr P.SIVAKUMAR
Doctor Siva Global HR
Tamil Nadu