Leveraging Human Capital Development for Successful Labour Mix Rationalization and Productivity Growth

Abstract

Human capital development is at the centre of productivity growth. Increasing skilled workforce and reducing unskilled workforce is one of the key factors influencing productivity in manufacturing industry. As organizations grows and flourish, the labour mix must evolve to meet the changing workforce requirement. Poor execution of labour mix migration is detrimental to organization performance. This article seeks to explore the role of human capital development in successful labour mix rationalization for a manufacturing firm with heavy dependence on unskilled labour to deliver productivity growth. The findings revealed that human capital development occurred at every level ranging from production operator to manager. Labour mix migration focuses on increasing skilled workforce through skill development programs. However, this study has directed the focus to the importance of developing employees and the first line managers involved in the labour mix rationalization to ensure successful labour mix and achievement of productivity growth.