HRM for Labour Intensive Organisations

Posted on: 11 December 2017


In the latest ease of doing business report, India has jumped 30 spots to number 100. This is the highest jump, that any country has ever made. For a country with maximum young population, this is good news, as more business would mean more employment. Another factor that supports India, is the availability of low cost labour in comparison to western countries. While the business grows, and the country’s population gels in with their employment opportunities, it is interesting to analyse the trends in context of which these organisations manage their human resource.

Human Resource Management (HRM)

HRM is defined as the systems developed to help organisations maximise the performance in service of their employer’s strategic objectives. We discussed human resource management in our last edition also. While the last edition talked about employable resource, we plan to look at the technological aspects of HRM in this note. A decade ago, HRM was targeted at minimising mistakes while paper based organisations moved toward electronic processes. HRM was considered as a regulatory requirement and not a business enabler. With changing times and evolution of technology, HRM now spans a wide range, from recruiting to performance management. With the involvement of complex technology, organisations have numerous solutions at their disposal.

Each organisation confronts one of a kind difficulties and business drivers; thus a one shoe fits all theory cannot be used. For a manufacturing unit: shift assignment, overtime, etc., leads the HRM requirements; for a service industry: the reimbursement distribution, along with the performance calculations, takes the driving seat. Battling through these individual challenges, organisations try to achieve a common goal of keeping individual and HR costs at a focussed level, and maintain legal and regulatory compliance.

HRM for labour intensive organisations

HRM in labour intensive organisations has all the ingredients for being complex. The employees are biggest resources and everything revolves around them. You cannot opt to lose your strength in the name of cost cutting, and attrition is high. Organisations have to keep recruiting on regular intervals, and then train the new entrants, but cannot spend a fortune on training. Among all these activities, the basic HR related work has to go through these transitions smoothly.

Organisations cannot spend a huge share of their budget on getting the infrastructure as is used by some other industries, while they try and mitigate these challenges. Apart from the infrastructure requirements, organisations have to abide to various regulations. The policies have to be implemented in a transparent manner, helping managers and not becoming roadblocks. Among all these, the cost factor plays a subtle role. The cost involved shall not cross the earnings an organisation will get through the resource.

Along with the above mentioned factors, flexibility, ease of use, data security, etc., add up to make the selection of HRM difficult. The age old solutions, though, try and provide interim support but they will do more harm than good in the long run. A solution like cloud based IT seems to be perfect with shared cost, high security, and mobility. The adoption rate needs to be monitored for analysis, but it can be claimed that every organisation will sooner or later switch to cloud based solutions.