SAP for Chemicals Blogs
Explore blog posts by chemical industry leaders and SAP experts, showcasing transformative solutions powered by SAP. Contribute a blog post of your own.
Showing results for 
Search instead for 
Did you mean: 

This blog post is the third post in my series on Building Human Capital in the Chemical Industry. If you want to learn more about key HR trends in the Chemical Industry be sure to check out Part 1. If you want to explore key priorities that should be considered by a HR Manager check out Part 2. This week I will be focusing on numerous ways / roles through which HR / Human capital ensures profitable operations in chemical companies.

Media / Platform to Exchange Ideas and Views

HR Manager in a Chemical company can involve and engage workers by providing them a media / platform to exchange ideas, suggestions and views for setting up productive work environment.  Workers through their feedback, suggestions can help prevent unsafe conditions at shop floor, help to setup right practices / processes, cut costs and wastages. Chemical Companies should encourage employees to provide suggestions and feedback and reward them for their insights.

Align Workforce Planning with Business Strategy

In a globalized chemical industry which is experiencing talent and skill shortages, companies need to setup effective workforce planning processes. This will ensure that HR managers plans ahead and considers all eventualities to prevent surprises. It will also ensure that a chemical company has the right skilled manpower available in different locations and regions to execute Business strategy. 

Workforce planning processes should analyze and ascertain key skills and competencies required to execute the business strategy. This can help to ascertain and analyze gaps (shortfall in required manpower) which can result from career progression / promotions or expansion into new markets or businesses. Workforce planning should also include measures and initiatives to cover gaps (talent shortages). These measures can be initiatives and programs like skills improvement and recruitment (in shortfall regions). Workforce planning processes can also be used to model organizational changes (structures) and ascertain their financial implications.

Develop Actionable Insights in Workforce data

Chemical industry operations are characterized by margin and profitability pressures. They need to measure, monitor and control costs in order to earn sufficient return on their investments. The chemical industry not only needs to invest in (hard) assets (plant and equipment) but also needs to invest and build its soft assets (human capital). Accordingly, it needs to build systems and processes which can help quantify its return on these investments (capital assets and human capital).

There are sufficient metrics / standards (Asset Turnover ratio, ROI, OEE etc.) available to quantify financial health and operational efficiency / productivity of an organization. Similarly, a chemical company will need to define and set up processes, standards, metrics, data requirements and sources, and calculation procedures to measure and quantify effectiveness of its policies to build right skilled workforce and also help to calculate return on its investment in building Human capital. These (HR related) measures and standards can help companies benchmark and compare its performance against similar companies, providing an insight into areas where improvements (in performance) are required.

With better insights (through quantified and validated HR metrics) into its workforce, chemical companies can understand what measures and actions it will need to take to execute its business strategy. Chemical companies can also utilize these metrics and insights on its global view of its talent position to undertake effective workforce planning.  

Mergers, Acquisitions and Divestures

Chemical companies, in their quest for profitable growth, tend to either divest non-core or non-performing units or businesses, or acquire new businesses (either to complement existing product lines or venture into new segments / product line) in their regions or across the world. Divested businesses can also be spun-off as a separate business entity / company. In either situation – divest or acquire – HR managers need to devise processes which are resilient enough to manage the challenges that arise from an altered organizational structure. 

Spun-off companies present unique HR challenges because the resulting company will have a limited supporting infrastructure.  With a revised business and organizational structure, HR Managers should evaluate talent positions, rework job profiles and communicate the new organizational structure to employees (who will be concerned about their role / position). For this HR Manager in a spin-off company needs to build and execute a change management program – which will help to communicate changes (in job profiles) to employees. .

Effective management and the integration of workforces in a merger and acquisitions (M&A) scenario is key for ensuring business success. This, however, requires the creation of an integration team. This team should evaluate the resulting businesses & it‘s requirements and factor in cultural issues (values, beliefs, operating practices etc.) while defining integration processes / strategies. Accordingly (based on the integration strategy) the integration team should evaluate available talent, review and design a new organizational structure and staff the resulting structure. The resulting organizational changes should be communicated early to concerned employees.

How have you used HR data to increase profitability? Have you implemented any platforms to increase communication among employees? How have mergers, acquisitions and divestitures impacted the management of your human capital? Use the comment space below to share your thoughts or connect with us at @SAP4Chemicals

Labels in this area
Top kudoed authors