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The Human Element in EMS

The electronics manufacturing services (EMS) industry is only doing an average job of managing its human resources functions. This is one of the main findings of a report recently released by Charlie Barnhart & Associates (CBA).

HR managers in this industry do not consider themselves strategic partners with senior management within their organization. Their top three HR risk concerns are staffing, retention, and training. They have trouble finding and keeping good employees, especially in engineering. These hard-working HR folks are struggling with lack of support within their organizations and a lack of resources to conduct effective employee feedback, training, and HR development programs.

In our report, Beyond Outsourcing, we gave the HR function within the EMS industry an overall grade of C for its performance.

There is an even greater need for attention to people skills in the EMS industry, where the barriers to entry are low and many companies are started by engineers. The dysfunctional state of the industry, as evidenced by abysmal OEM customer satisfaction rates and cratering business performance metrics, has resulted in historic upheaval. The history of the industry demonstrates how chaotic and unstable things were and are — double-digit growth in one decade, companies getting acquired or evaporating the next.

In the electronics manufacturing industry, as in many other global businesses, there is a crisis in HR management. Managing a global workforce means balancing the requirements of local cultural considerations with cost reductions through lower labor rates. Historically, this has been especially true in the EMS industry. But when a business or industry considers its employees as merely an expense on the income statement, there is trouble ahead. The truth is, people really are the most important entry on a company's financial statement. They create the value by operating the equipment, maintaining customer relationships, and protecting the value of the assets.

In emerging markets such as China, the challenge is to nurture a growing middle class to encourage domestic demand. That means managing rising salary expectations while maintaining customers' demands for low labor costs. The traditional top-down military style is proving ineffective with tech-savvy Chinese young people, and some experts predict low workforce engagement will be a major impediment to China's rise to economic superpower status.

In the debt-ridden developed world, the trouble comes from lack of skilled workers. This may seem counterintuitive, considering unemployment rates, but the combined effects of misalignment in education, demographics, and the misallocation of resources in the wake of the finance crisis have resulted in a severe manufacturing skills gap.

With many electronics manufacturers considering a return to a regional approach — building in the region for the region — managers are realizing that things will have to change to help them find the skilled workers needed. Our study draws from the HR management industry's experts to bring objective analysis to the EMS industry.

What will be the overall impact of this lack of attention to the human element on this industry? We see major shifts in how global electronics companies design and execute hardware manufacturing. The players, geographies, business models, and distribution channels are morphing constantly. The key to success for these service providers will be how effectively they manage HR elements. Investment in people will be critical.

What do you think? Share your comments below.

20 comments on “The Human Element in EMS

  1. Ruth Glover
    July 17, 2013

    Your article illustrates multiple issues: planning the job descriptions to engage the readers, knowing what skills are needed, understanding peronality factors for the group to be well rounded and truly training the team for successful interviewing results. 

    Recruiters often see the hiring managers' attitudes as blase or “I know how to do this without ,your help.”  Sometimes HR prevents the hiring managers from talking with agency recruiters, a travesty for understanding the requirements.  Better communication, better training and better understanding for all concerned would help EMS find more qualified candidates.  Recruiters must be able to act as part of the team, at least for the hiring process.

  2. Suzanne.Deffree
    July 17, 2013

    Agreed. Add to that the shrinking number of young people studying STEM (science/technology/engineering/math) fields and entering such careers and the problem gets worse in 10-20 years. That's why competitions that inspire young people and provide mentoring in STEM, like the Avnet Tech Games and FIRST, are so important.

  3. ahdand
    July 18, 2013

    @Suzanne: Good point on mentoring the young students. I think the numbers will die if the training and the guidance is not given properly. Also they should make sure that everyone is being taught the importance of this. Creating awareness is very important.

  4. prabhakar_deosthali
    July 19, 2013

    EMS has emerged as a major industry in the last decade , especially in the developing nations like China, India, Malaysia etc.

    But if we see the curriculum of the Science and engineering courses that are taught in universities and colleges -there is more stress on design and development and much less stress on the manufacturing technologies. 

    So the fresh engineers are hardly equipped to take up the manufacturing jobs unless they are properly trained with the strict regime of quality throughput under tight timelines.

    This lacuna needs to be filled by creating specialized curriculum  oriented towards EMS.

  5. elctrnx_lyf
    July 19, 2013

    Any manufacturing in general works on the principle of more output than anything else. They tend to give very less importance to people but the successful and large ema companies definitely have a long term plan in developing talent which is only solution for a sustainable business.

  6. _hm
    July 19, 2013

    @Prabhakr: Yes, there is undue stress on abstract design for everyone. They should offer choice. Many times, trade schools trained people are very effective in helping engineering doing design and prototype. They also work good for EMS.

     

  7. ahdand
    July 19, 2013

    @_HM: As long as you have the knowledge to do what is being asked from or what is being expected from you can be survived but if you want to climb up the ladder, you should be able to think out of the box and suggest different things which can enhance the productivity.       

  8. SunitaT
    July 20, 2013

    In the debt-ridden developed world, the trouble comes from lack of skilled workers.

    @Eric, thanks for the post. Its surprising to knwo the debt-ridden developed world has lack of skilled workers. I think government should take necessary steps to bridge this skill gap by training unemployed people with necessary skill-sets. 

  9. SunitaT
    July 20, 2013

    Add to that the shrinking number of young people studying STEM Science/technology/engineering/math) fields and entering such careers and the problem gets worse in 10-20 years

     @SuzanneDeffree, agree with your observation. Number of people studying STEM is on decline in developed word. But surprisingly number of people studying STEM in developed world is continuously on rise in developing nations. I think US government should take necessary steps to encourage STEM education.

  10. SunitaT
    July 20, 2013

    @nimantha.d, The subjects that are mainly taught in engineering colleges are not implemented. Moreover the training new interns go through has to be top notch for them to provide good service to the EMS industry.

  11. Himanshugupta
    July 21, 2013

    @Tirlapur, i do not know whether the reason for falling number of people studing STEM is populations dynamics (less number of young people) but the situation in the developing world is not too bright as the education system in developing countries still teaches century old theories. Most of the students go to developed world for advance studies and work there for either sometime or longer. If these young fellows want to come back to developing country even then companies absorb them as the world is shrinking due to technologies around us. So i think that the options are not traditional anymore.

  12. ITempire
    July 22, 2013

    I think EMSs are a mixture of skills of human resources, manufacturing equipments and the methodology to manufacture. Clients expect a lower manufacturing cost and not specifically the lower labour cost of the EMS providers. If quality human resources are deployed they might make good use of the manufacturing equipment and bring improvements to the manufacturing methodology thus bringing the overall costs down and simultaneously improve the quality of products. Conventional thinking to save labour cost is not the way to go. 

  13. ITempire
    July 22, 2013

    Elctnx_lyf, the quality of leadership determines whether the human resources are viewed as a long term asset or an expense to the business. However, for consistent improvements and successful outcomes, it is necessary to retain and train the workforce you already possess. If leadership thinks short-term, it cannot expect high-skilled / high-performing labour to stay with the enterprise.

  14. Hailey Lynne McKeefry
    July 22, 2013

    In the IT security industry, there are a lot of programs and contests and events aimed at raising the attention of young folks, in graduate school, college, and even high school and middle school. I wonder if there are programs like that in the supply chain industry…and whether they would be effective. It might be too esoteric for younger students, but perhaps in advanced education. Anyone have any experience? HOw about big companies using interns or something like that?

  15. Ravenwood
    July 30, 2013

    I have some experience here, as a Board member of an EMS trade association that engages student/parent/instructor organizations from Elementary through University level with exposure to, and support from, our industry. One such organization is FIRST Lego League (FLL). FLL has proven to be an outstanding program for children with interest in manufacturing task-oriented electronic robots. In later years this includes design. In all years it fosters team-building equally with device building. “Get 'em early” is essential. Waiting until college really is too-late. However, we've been very successful at creating Student Chapters of our organization at engineering schools (e.g., Georgia-Tech) along with intern programs (companies big & small love internships).

    And let's not forget mentoring. There are organizations that will pair professionals with tech students, making a rewarding experience for both. Checkout MentorNet as but one example.

     

     

  16. Nemos
    July 30, 2013

    The problem is that are too many candidates with qualifications in the market and in the most companies are so picky in the hiring process. The problem that is mentioned actually is created by the companies and their hiring advisor companies.

  17. Hailey Lynne McKeefry
    July 30, 2013

    Thanks, Sparky… really interesting examples. I do think that getting them young is really important…and making them fun. I'll bet FLL has gotten a lot of kids on the path.

    As for mentoring, i know that it was great mentors that kept me moving forward in the industry. I want to throw this out to everyone: Tell us what your mentors have done to you? What do you do to mentor others? Give us some great stories!

  18. Hailey Lynne McKeefry
    July 30, 2013

    @Nemos, i think there a lot of people looking for jobs–and that jobs are getting more specialized. It's gotten much more difficult and complicated to match the right people to the right jobs. it does make it harder for eveyrone involved, hiring and those wanting to be hired.

  19. SunitaT
    July 31, 2013

    In the electronics industry, as in many other global businesses, there is a crisis in HR management. Managing a global workforce means balancing the needs of local cultural considerations with cost reductions through lower labor rates. Historically, this has been particularly true in the EMS industry. But when a business considers its employees as merely an expense on the income statement, there is trouble ahead. The truth is people really are the most vital entry on a company's financial statement. They generate the value by operating the apparatus, maintaining customer relationships, and protecting the value of the assets.

  20. t.alex
    August 8, 2013

    I do see a number of people who trained in engineering, interned at big MNC with good HR policies but ended up working for banks with the prospects of better pay and better future 🙂

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