Is Blue-Collar Workforce Management a Hurdle in your Digital Transformation journey?

Introduction

The concept of Industry 4.0 is rapidly gaining traction across various sectors. It represents a major digital transformation in the way companies approach manufacturing operations. However, this digital transformation has also made a significant impact on human resource activities. The HR 4.0 is driven by technology with digital transformation incorporating groundbreaking changes in conventional human resource management.

These changes include process optimization, reduction of costs with labour and with materials, error reduction and manual work, and ease of decision-making for managers. The advent of Industry 4.0 and HR 4.0 has enabled us to look at the broader future of blue-collar workers. It is a part of a workforce that has remained fairly untouched by digital transformation. Because of that, organisations face tremendous challenges when it comes to the management of this workforce. Since a vast proportion of blue-collar workers are processed manually, data loss becomes a critical challenge in their management. Regardless of how tangible this problem may seem, tackling it remains a major hurdle for organisations.

The data loss is not merely limited to the management of the blue-collar workforce, rather it has a prolonged impact. With so much dependency on manual processing, data loss makes it even more challenging for organisations when it comes to the expansion and diversification of the workforce.

Here are some major challenges in digital transformation of the blue-collar workforce

• Paper-driven manual processes causing errors & loss of data

One of the key problems with manual data is its vulnerability to errors, intentionally or otherwise. A paper-driven approach not only reduces the efficiency of the organisation but also makes processes disparate. Furthermore, in conventional blue-collar workforce management, worker entries are done manually, rendering it prone to errors. Even if there is an attempt for minimal digitalization, it could pose a major challenge in terms of scalability.

• Reduced business efficiency due to lack of data tracking

With a lack of data tracking for the blue-collar workforce, businesses often lose an edge and efficiency in what they do. Manual errors in tracking and managing attendance lead to workers falsifying information, eventually hampering the efficiency and productivity of the business.

• Higher cost due to middlemen

Blue-collar workers often depend upon labour contractors to find work opportunities. Although these middlemen make it easier for workers to find a job opportunity, they charge a hefty commission from the hiring organisation. Besides, they often push workers to take up low-paying jobs with challenging working conditions.

• Lack of analytics & insights leading to inaccurate & slow decision-making

Manual attendance systems cannot provide critical data in real-time, in order to obtain key insights for decision-making. As a matter of fact, they cannot ascertain major issues like loss of productivity, absenteeism, hiring requirements, etc., thereby hampering the organisation in the long term.

• Disconnected systems causing repetition and departmental inter-dependency

With no coherent system managing blue-collar workers, there is a repetition in tasks which in turn leads to confusion and process inefficiency.

• Increased business risks owing to unverified employees

When blue-collar hiring is done manually with the help of middlemen, companies run the risk of hiring someone with criminal records. Organisations might end-up hiring workers with civil or criminal records, scamsters, unethical candidates, etc. – and this can be detrimental to their business and brand.

• Rate of attrition higher than the rate of onboarding

Since attendance is registered manually, reconciliation becomes an extensive process. The data is retrieved from multiple sources and the final report would require approval from top management before it goes to salary disbursement. These activities eventually delay wage payments and lead to a higher attrition rate.

• Manual payment & onboarding errors

When it comes to blue-collar management, payment activities are processed manually, rendering loss of data and human errors in tracking attendance. Similarly, when it comes to onboarding, errors accumulated due to manual processes result in a higher attrition rate of qualified candidates.

• Hassle of compliance filings/ legal liabilities

For blue-collar hiring, compliance with state labour laws is a vital issue. As different Indian states have specific laws related to employment contracts, maximum work hours, worker conditions, overtime, and wages, it becomes highly challenging for the company to achieve 100% compliance with these laws specifically when the workforce is distributed across locations.

• Delayed payroll processing

A paper-driven approach to blue-collar workforce management poses a huge challenge to scalability. This further leads to hindrances in wage calculation, delays in wage payments, and other similar issues.

• High attrition rate due to low employee engagement

Highly engaged teams often lead to higher productivity, better retention rates, and greater creativity. However, when recruitment processes are not streamlined and there is low employee engagement and upskilling, companies witness a higher attrition rate, leading to lower productivity and slower growth.

• Different platforms to manage attendance, leaves, and other HR requirements

One of the critical issues with blue-collar management is the lack of cross-functional systems to engage and retain the employees. Difficulty in accessing employee records leads to redundancy, data errors, and overall employee mismanagement across the organisation – resulting in spending huge effort, time & money an inefficient manner.

Conclusion

Such challenges will remain incessant unless they are addressed efficiently with a proper HR management system. Companies need to leverage the capabilities of HR 4.0 where they can streamline a lot of business operations and enhance the overall efficiency of the organisation. Understanding the needs of both blue-collar workers and organisations hiring them, BetterPlace has developed India’s first-ever HRMS platform for the blue-collar workforce. Its one-stop solution tackles a vast range of problems faced by organisations right from finding the right talent to onboarding them, from employee verification to managing their payroll.