Amidst the dynamic contours of the Indian manufacturing sector, a notable majority of organisations are taking proactive strides to embrace flexibility, ushering in a new era of improved working conditions for their frontline workforce.
A new study by HR, payroll, and workforce management solutions provider UKG, explores topics ranging from the prioritization of employee wellness to the transformative impact of digitalization on revenue and productivity. Additionally, it addresses pressing concerns such as cybersecurity in the era of digital transformation, the evolving role of artificial intelligence in manufacturing, and the strategic focus on building a skilled talent pipeline within the Indian manufacturing landscape.
The study surveyed 314 HR leaders in India-based manufacturing organisations to gauge the impact of labor supply, labor laws, and compliance on operations. The survey covered diverse industries, with manufacturing at 43%, and food processing and pharmaceutical/life sciences each at 28%.
Impact of labour laws and compliance on manufacturing organisations operating in India
In the fiscal year 2019-20, amid the peak of the pandemic, the Indian Parliament enacted four new labor codes. These codes consolidated a network of 29 central labor laws and encompassed the Code on Wages, 2019; the Industrial Relations Code, 2020; the Occupational Safety, Health and Working Conditions Code, 2020; and the Code on Social Security, 2020. Despite this, certain states are still in the process of formulating and publishing rules to implement these codes, given that labor is a subject falling under the jurisdictions of both the central government and individual states.
Moreover, an overwhelming 96% of organizations find their state’s current labor laws and regulations effective in fostering a favorable working environment for the manufacturing industry. Regarding year-over-year changes in compliance costs in the past 12 months, 75% of organizations noted shifts, with 50% reporting a moderate increase and 25% indicating a significant increase.
The survey included manufacturing organizations from different Indian states, with the breakdown as follows: Andhra Pradesh (10%), Bihar (11%), Gujarat (14%), Haryana (10%), Karnataka (15%), Maharashtra (32%), Tamil Nadu (15%), Telangana (6%), Uttar Pradesh (13%), West Bengal (7%), and Other (3%).
To what extent are organisations prioritizing the frontline employee experience? (and is it enough?)
In India, the study reveals that 52% of Indian manufacturing organisations have adopted flexible scheduling practices, empowering employees with the autonomy to set shift availability, swap shifts, or extend working hours. Other key offerings include 51% prioritizing employee well-being through wellness programs, 49% extending financial wellness benefits such as earned-wage access and same-day pay, 39% utilizing an employee communications mobile app, 34% offering hybrid or remote-work options, and 34% emphasizing predictable work schedules. Additionally, 27% provide paid time off, and 44% offer training and development opportunities.
Commenting on the survey, Sumeet Doshi, Country Manager at UKG India, said “As we navigate the intricate landscape of Indian manufacturing, our survey unfolds a narrative of progress and people-centric innovation. A compelling 52% of manufacturing organizations have embraced flexible scheduling practices, underscoring our commitment to empowering frontline workers. This not only provides them with autonomy over their work hours but also signifies a pivotal step towards a more agile and employee-focused industry. Furthermore, the resounding 96% endorsement of the effectiveness of state labor laws in fostering a positive working environment amplifies the collaborative spirit driving the manufacturing sector’s success.”
Synergizing Human Potential with Technological Innovation in Manufacturing
69% of Indian manufacturing employees (31% strongly agree, 38% agree) feel that their organisation is not doing enough to take advantage of mobile technology to support the frontline employee experience
Presently, 10% of Indian manufacturing organizations leverage the power of Artificial Intelligence (AI) for optimizing workforce scheduling. In contrast, 38% of these organizations rely on digital tools to enhance their scheduling processes. Furthermore, 41% of Indian manufacturing entities harness electronic tools for workforce scheduling. On the other hand, 11% still adhere to manual processes for scheduling.
Ashok Saxena, VP Engineering at UKG India, noted that “The data clearly reveals the considerable untapped potential for incorporating technology into the Indian manufacturing sector. While a mere 10% currently embrace the efficiency of Artificial Intelligence for workforce scheduling, there’s a significant 38% leveraging digital tools. Simultaneously, the feedback from our workforce is paramount, with 69% expressing a desire for more emphasis on mobile technology to enhance the frontline employee experience. This underscores the pivotal role of technology, urging organizations to not only embrace AI but also prioritize the integration of mobile solutions for a more connected and empowered workforce. The future of manufacturing lies in the seamless synergy of human potential and technological innovation.”
Crucial priorities for manufacturers over the next 12 months
Over the upcoming year, 47% of manufacturers are placing a high priority on employee well-being and safety, while 41% are emphasizing cybersecurity, and 40% are directing their attention towards digital transformation. Additional priorities encompass recruitment (32%), retention (23%), Diversity, Equity, Inclusion, and Belonging (DEI&B) initiatives (39%), sustainability efforts (39%), fortifying supply chain resilience (35%), exploring AI and generative AI (35%), nurturing a positive workplace culture (32%), and preparing for resiliency and disaster scenarios (27%).