Importance of Human Resource Planning in RMG
Importance of Human Resource Planning
Importance of Human Resource Planning – Manufacturing Readymade Garments (RMG) as a labor intensive industry requires a large number of labor force to produce its products and (or) services.
Usually the least developed or developing countries having huge number of
population are the suitable places for labor intensive industries. These industries follow the lowest wage to keep the production cost at a minimum level. Read more about Human Resource Development in RMG factories
Bangladesh and manufacturing ready-made garment (RMG) have been
synonymous to the most of the global brands and buyers of this sector. RMG
sector was considered a start-up industry in many developed economies.
Durations of RMG manufacturing industry in America and UK to Japan to 4-
tiger economies (Singapore, South Korea, Hong Kong and Taiwan) were muchshorter than in Bangladesh. The shifting of the RMG manufacturing industryover the period, from country to country is because of labor-cost. Over the last four decades Bangladesh is heavily dependent on a single industry and that is RMG due to absence of any other alternative sector (s) to cope with so much of unemployment. Among the major garment manufacturing countries, Bangladesh has the lowest labor wages. Low-wages certainly are the key to be considered an importing destination by the buyers. Being the lowest even, among the other sectors of the country, proper utilization and planning on importance of human resource planning had never been an issue of concern.
The workers were identified with the numerical value in a factory, not as a resource. As a result, productivity, efficiency etc. are also low while man-machine ratio is high compared to its competing countries. Low wage does not help to keep the production cost lower if the workforces are not skilled. On the other hand, in managerial and technical positions many of the factories employ foreign staff to manage the production floors to material sourcing and negotiating with the buyers. Over the period, cost of production including the labor wage in Bangladesh has increased. To be competitive and to capitalize on green factories status and improved ethical compliance and structural safety, there is no alternative to a sustainable importance of human resource planning , which had been heavily ignored since its inception. Importance of Human Resources Planning
There is no universal policy on Human Resources (HR) applicable across the
sectors. Rather depending on the nature of business activities Human Resource Management (HRM) formulates the strategies for the organization. Human Resources Planning (HRP) in corporate level and in operation level is not likely the same. Similarly, HR planning, which is effective in service sector, is not necessarily applicable for agriculture sector or manufacturing sector. Even within the manufacturing sector HR planning depends on the uses of technology and work environment, as a whole. The man-machine ratio is not same in the highly technology dependent manufacturing industry like Textiles and labor intensive manufacturing industry, as Readymade Garments (RMG).
Huge population and lack of alternative employment opportunity, comparative lower wage etc. have been keeping the sector at the top in terms of formal sector employment especially for the females. As human resources are considered the cheapest element in this manufacturing process. They are still abundant as required. As a result, at the operation level management has to employ more workers than required as they are not yet costlier. A thoughtful plan is still missing on importance of human resource planning . Mid-level management is still very weak or inefficient to play the role they are supposed to play. With those realities, the industry is losing its competitiveness and it is concentrated on lowpriced volumetric products.
Generally, management always prefers ad-hoc plan instead of a sustainable
strategy. Bangladesh has the highest number of green factory buildings and
most of the factories are now structurally safe and sound. There are many group of companies who have multiple production complexes with modern machinery and equipment.
Interestingly they are not serious to develop their human resources. Their investment in human resource development is almost nil or insignificant. Instead, the industry is now overburdened with no or only lowly skilled operators and with absence of local talents in mid-level managerial positions. If within a decade few production lines can be converted into a group of companies, then how many decades are needed to develop an effective human management system?
Man, machine and materials are considered the basic elements of industrial
production. Among the core elements, managing human being is the most
important and complicated as well. Like any other organization, the activities of readymade garment factories can be divided into two key functions – Line – those are directly involved with production, the key function of the industry and Staff – those who provide assistance to production.
According to the wage grade of Minimum Wage Board employees of the
Readymade Garments (RMG) industry are divided into two categories, A)
Workers – those are differentiated into seven different grades (1-7) and B)
Employees – who are not directly involved in production but help in production, delivering their services, divided into four different grades (1-4). There are many other important functions which have been skipped in the wage grade. Following table can be drawn to explain the past and present status importance of human resource planning department in readymade garments industry in the country.
Bangladesh has the highest number of green RMG factories in the world.
Highly environmentally friendly factories do not have strategic plan on human resources development. As a result, shortage of skilled workforce creates an unhealthy competition among the entrepreneurs who recruit experienced supervisors and workers from the neighboring factories with higher wages and benefits instead of developing their own workers in their respective factories. It’s like readymade garment sector always look for readymade skilled workers. On the other hand, workers always think out their present value of work. To them BDT 500 is more important than their future benefits. As a result, workers’ 1st Phase (From the beginning till 2000)
Time Keeper
To maintain the payroll, a job of “time-keeper” was strongly placed to record workers in-out time and including over time (OT) work, wage disbursement etc. This activity was controlled by the concerned Production Manager (PM), then the most powerful and unchallenged authority. 3rd Phase (From 2007 onward) Human Resources Department (HRD). To maintain the payroll, a job of “time-keeper” was strongly placed to record workers in-out time and including over time (OT) work, wage disbursement
etc. This activity was controlled by the concerned Production Manager PM), then the most powerful and unchallenged authority. 2nd Phase (From 2000 to 2006)
Personnel Department
With the growth of businesses, it was difficult for the production managers to control the activities beyond their capacity. Increased numbers of employees, their payroll, issuing appointment letters, Identity (ID) Cards, calculation of overtime hours, store, security, loader etc. were not possible for a single head and hand. So, the term “time keeping” section got converted to “Personnel Department”. But in many cases functional authority remained in the arena of production manager. migration is a common and chronic problem of the sector. Production costs have gone up and this trend will continue due to periodical wage upgradations, safety improvements, material costs etc. there is no way rather than productivity
improvements and product diversifications. To do so, trained and skilled importance of human resource planning is a must.
The requirement of HRD did not come out from the factories’ side. They
appointed HR people to comply with the requirements of audits. Maximum
responsibility with no or minimum authority made them dissatisfied performing their job. If there were any conflict between human resources department and production department, top management were always in favor of production department, as most of them considered production department on income side and human resources department on expenditure side. Since, HRD was not to shape the business in corporate culture or in a structured form, so necessary authority was not delivered to make the department functional in the sector, except a few exceptions. Lack of required skills, fear of losing jobs and dissatisfaction are common among the HR members.
To understand RMG industry, one has to first try to understand the background of the workforces before knowing about their management. In our RMG industry, it is very significant to consider the background of workforces – who work in the core value stream. The people in core value stream in the industry are from below poverty line, under privileged, less educated i.e. marginal group of the society. The total number of the workers of the factories under the case study are 8830. Out of total manpower, 51% is male and 49% is female. Among the total manpower, around 55% are from Rangpur and Rajshahi divisions. In contrary, the workers from Sylhet and Chittagong are less in number i.e. 0.45% and 3.34% respectively.
The graph shows that the females are more in number from Barisal, Chittagong, Sylhet, Dhaka, Mymenshing divisions, and more number of males are from Rangpur, Rajshahi and Khulna divisions.
Among the various departments and grades, females are mostly employed in sewing section. According to minimum wages Gazette for Bangladesh garment industry grade 7 for helper and grades 6- 3 are for General operator, Junior operator, Operator and Sr. Operator respectively.
Out of total 7786 workers 55% i.e. 3495 workers are female while 45% is male. Females are more in the positions of lower grades. In the grades 7, 6, 5, 4 and 3 females are 62%, 66%, 59% , 52, and 46 respectively. Out of total more than 45% workers are in grade 4 whereas in grade 3 and 5 it is 14.32% and 10.34% which indicate that factories are highly depended on migrated skilled workers. In a garment factory operators are the lifeline both in number and in operation of the industry. The supervisor is the 1st line management in RMG manufacturing unit. They supervise the operators’ functions and are responsible for production targets. They play a very crucial role and make the communication bridge between the workers and the upper management. Normally an experienced male operator is promoted to next higher position Junior Supervisor. In the industry though the females are more in number yet we see very poor numbers of female in supervisory position.
The posts supervisors or line chiefs and above are captured by the males. In
supervisory level, out of total 680 supervisors only 32 are females which is only 5% of total supervisors. In officer category total manpower is 266 and of them 91% i.e. 243 are from male. In managerial position the scenario is the worst than supervisory and officer levels, i.e. only 1 out of 98 managers is female. This is an example of non-functional or absence of human resources planning of the industry. In RMG sector span of service life in a particular factory is very short. More than 41% of total manpower have less than one-year service with the present companies. More than 80% manpower have been working in the same company for less than 4 years.
According to BLA – 2006
1. A worker who has completed ten years of continuous service or more shall be paid at the rate of thirty days (section 27, 4b) wages for every completed year.
2. If the service length is five years more or but below ten-years calculation
should be at the rate of fourteen days (section 27, 4a).
3. There is no provision of service benefits for the workers who serve a
company for less than five years. There is a relationship between the service length and service benefit. Workers presence in the same company after 5 years is alarmingly low. It was known that the situations compel the workers to leave the factory before 10-years services due to legal obligations to pay higher service benefits. Thus experienced workers are to change the factories frequently.
RMG industry is a temporary filed of employment for the employees. It has not any life time plan for its’ workers. A worker can survive till he/she can serve the industry. With a temporary plan with its workers industry’s sustainable development is not possible.
A functional HR hardly exists in the industry. Study revealed, big companies of Bangladesh RMG sector are suffering from lack of modern management
concept. If we fail to address appropriate measures the day is not very far when this sector will be a history as it happened in the case of jute, golden fibre of Bangladesh. Now the question is of survival or be perished. For the survival following measures can be taken –
Industry efficiency is highly depended on the supervisors. When cost is the
biggest concern it will be a luxury to continue with traditional way of doing
things. If a factory can attract technically trained people for the supervisory
posts then it would be easier to compete with its competing countries in regards to efficiency and productivity. To create a congenial working environment and to ensure a long run growth of the sector HRP must initiate the changes from supervisory level.
The focus of discussion on minimum wage gives a perception to the common people that the sector pays as minimum as possible in all of its functional areas.
It is unknown to the many that the sector is the highest payer of wages in
Bangladesh private sector context. This encasing of information backfired to attract talented students to the industry. To reduce dependency on traditional production managers, some of the companies have been, though in limited
Scale, trying to involve the Industrial & Production Engineers (I&PE) in its
production department. But most of the cases the relationship between the
traditional managers and the modern engineers is not functional. As a result, expected outcome is yet to be reached.
Bangladesh RMG business is highly dependent on foreign professionals. The
owners are very polite with foreign staffs simultaneously they are, in many
cases, very rough and tough to the locals. Workers and officers, due to inherited colonial mentality, are more attentive and obedient to the foreigner as a boss rather than local boss. Sometimes buyers get confidence if there is any foreigner in their sourcing factory. A foreigner in senior position prefers to recruit the persons under him from his own country. Most of them have average job skills compared to locals but their better communication skills help them
better manage their customers. Ensuring a working environment, empowering HRD, industry can hunt local talents from all disciplines, as the sectors’ pay and perks are more than any other sector for the deserving ones. This way industry can minimize dependency on foreign nationals.
Identify the KPI (key performance indicators) against each position. Each
achievement will be expressed/transformed into numeric values. Organization will follow transparent appraisal method instead of confidential appraisal system. One can evaluate his/her performance by himself/herself. To achieve better score he/she can make effort. In this process the grievance, dissatisfaction
and frustration will be minimized and a healthy competition will prevail among the members of the organization.
If supervisor is the 1st line management then assistant production manager or floor in-charge is the in-line management. Department heads, production
manager and factory manager are in midlevel management. Soon after any
incident takes place in any factory the top managements’ and association
leaders’ immediate reaction is like “it is the failure of mid management”. This incompetency of mid management story is being told decades after decades.
Have the industry leaders or factory owners taken any noticeable initiative to improve their competency? Incidents are taking place at regular intervals and criticisms also are voiced in similar nature. Then the question is why no improvement efforts can be made? It is the owners’ attitude that they will not delegate their authority that they have been exercising over the decades. The owners will make HR, mid management responsible, for the failure, they will assign work load to a particular person or department but they will not delegate proper authority with the assigned responsibility. Without authority no one can exercise his/her responsibility. For the functional HRD this authorization is extremely needed.
It is commonly remarked by the entrepreneurs that they are not having qualified candidates to recruit though the organization has the number of vacancies. In contrary, students after completing their academic life they remain unemployed, and they think that is due to lack of suitable job opportunities. Both are the harsh realities when education system and industry demand do not match. Most of our students are now enrolling themselves in the business faculty where the number of the student in science faculty is decreasing alarmingly. In Bangladesh, education system could not adopt the changing demand of the industry due to lack of communication between the academicians and the entrepreneurs. Entrepreneurs can share their experience to the students and
academicians can contribute to the industry with their knowledge. Here,
government role is very crucial to make the bridge between the parties. The
entrepreneurs can open up internship opportunities for the students and the government, through policy making, can encourage students to study science more in number.
The RMG sector has flourished in a very scattered way. Unplanned expansion of production capacity without development of importance of human resource planning management has created the dependency on foreign professionals. There was no effective management system for maintaining the labor intensive industry like the RMG. The sector is highly influenced by the theory “X” of Douglas McGregors (1906-1964) where extreme negative approaches towards the workers were perceived. Employee dissatisfaction, absence of job security, low retention rate etc. is very common in the sector. One single department, Human Resources, is responsible for multiple works. They have a huge work load with minimum or no authority. They cannot involve themselves in workers training and development and motivational activities. Moreover, department itself has weakness to manage the functions effectively. importance of human resource planning
Conclusion
Recently the government, apex bodies and some of the brands have taken
different initiatives like Skills for Employment Investment Program (SEIP),
The Centre of Excellence for Bangladesh Apparel Industry (CEBAI) to develop operational and managerial skills for the apparel industry. but Much more is needed to be sustainable as Bangladesh RMG sector will lose LDC-specific benefits in 2027 like duty free access to European Union which is one of the major attractions for the importers. Considering the importance of the problem, an in depth and immediate study is needed in this particular area which is still missing. If the sector fails to address this crucial issue, then importance of human resource planning may lose the present business share.