New Survey Finds Labor Productivity is the Number One Factor for Global Competitiveness in Manufacturing

CHELMSFORD, Mass.--()--A new global survey commissioned by Kronos Incorporated and conducted by IDC Manufacturing Insights revealed that labor productivity ranked the highest among all 11 countries surveyed as the most important factor for achieving manufacturing success. Factors such as modern infrastructure, government support, and foreign direct investment ranked in varying degrees after labor productivity.

News Facts

  • Manufacturing managers, directors, and executives from sectors including automotive, food and beverage, machinery and equipment, and textiles across Australia, Brazil, Canada, China, France, Germany, India, Mexico, Spain, the U.K., and U.S. were surveyed for current trends in global manufacturing. Respondents from developed economies fared similar to emerging nations when rating manufacturing’s importance, with 70 percent of all respondents citing manufacturing as the single most important industry for their country’s economic health.
  • 74.7 percent of all respondents agreed that a high level of labor productivity is very or extremely important for achieving manufacturing success. While emerging nations rated the need for modern infrastructure higher than mature economies, labor productivity still topped as the main driver of success among all countries. Brazil, Mexico, and Spain scored the highest regarding labor productivity, with 82 percent in all three countries noting it to be very or extremely important. China, France, India, and Germany scored relatively low, with 66, 66, 68, and 68 percent.
  • Brazil respondents ranked the need for modern infrastructure the highest, with 88 percent rating it as very or extremely important. China, India, Mexico, and Spain followed with 82 percent in all four countries, and 66 percent in the U.S. agreed about modern infrastructure’s importance.
  • Brazil, India, Mexico, and Spain respondents rated access to foreign investment the highest, with 50, 50, 70, and 62 percent respectively citing it as very or extremely important. Canada, Germany, and the U.S. ranked the lowest, with only 12, 16, and 18 percent respectively.
  • China ranked government support for the manufacturing industry the highest, with 82 percent rating it as very or extremely important, and 48 percent of U.S. respondents agreed to the same.
  • When asked about factors that can improve workforce productivity, training and continuous improvement of the existing workforce was the top choice, with 68.2 percent of all respondents noting it as effective. Investment in technology followed next, with 63.3 percent.
  • And what are some of the issues impacting productivity? The survey found that absences can get in the way. When asked if absenteeism was not a problem, Australia, Canada, U.K., and U.S. respondents agreed the most, with 42, 48, 46, and 44 percent respectively, demonstrating absenteeism to be a smaller issue. Brazil, France, and Mexico cited absenteeism as a bigger problem in manufacturing, with 24, 26, and 22 percent respectively agreeing.
  • The survey also showed that both developed and emerging economies are impacted by a shortage of skilled production employees, with 68 percent in Brazil, 36 percent in China, 22 percent in Germany, 44 percent in Mexico, and 26 percent in the U.S. agreeing to a shortage.
  • How does the future of manufacturing look as a career option for the next generation? 88.2 percent of all respondents were very or somewhat positive about encouraging younger relatives to consider manufacturing as a practical career option. In the U.S., 90 percent agreed and other nations fared similar. Australia and China ranked the lowest, with 74 and 70 percent respectively.
  • The respondents were also asked about one strategy that they would recommend for global competitiveness. The winning recommendation, at a combined 45.5 percent, was that manufacturing companies should keep existing facilities as is and invest in workforce operational excellence methodologies, which comprise of strategies for more effective labor cost control, minimized labor law compliance risk, and improved workforce productivity.

Supporting Quotes

  • Gregg Gordon, senior director, manufacturing practice group, Kronos and author of Lean Labor
    “Manufacturers today are judged on a world stage and their treatment of labor is under the scrutiny of governments, downstream supply chain partners, and end consumers. With developed countries facing high levels of un-employment and falling wages, emerging nations can no longer rely on low cost labor as a growth strategy. They will need to develop a skilled, productive workforce to compete globally. Also, as manufacturers seek growth internationally, they are required to invest in economic development by foreign governments; specifically good paying, local jobs. With increased global scrutiny, competition, and supply chain complexities, the workforce is becoming a competitive differentiator for manufacturers everywhere.”
  • Bob Parker, group vice president of research, IDC Manufacturing Insights
    “The modern manufacturing workforce is going beyond its proud legacy of continuously driving higher levels of productivity through continuous improvement and is augmenting that legacy by being the pivotal resource in creating strategic advantage. Complexity is a given in our global supply chains and it is not just information that gives us advantage, but people with the skills to use that information. As our surveys and detailed interviews confirmed, managing corporate capabilities through the workforce is a competitive necessity.”

Supporting Resources

Survey Methodology

The basis for this study includes new primary research with 550 workforce management stakeholders across 11 countries: Australia, Brazil, Canada, China, France, Germany, India, Mexico, Spain, United Kingdom, and the United States. The companies included in the research were from the manufacturing industry and included a diverse collection of both discrete and process manufacturers. Participating firms were required to have a minimum of 200 employees. Respondents were recruited from both the IT organization as well as the Human Resources organization to ensure that line of business and technologist perspectives were well represented. The online survey was fielded for four weeks in March and April 2012.

The survey effort was augmented by 19 formal in-depth interviews with senior leadership from global manufacturers based in the following countries: Canada, China, India, United Kingdom, and the United States. Interviews were conducted by phone and spanned 60-90 minutes each.

About Kronos Incorporated

Kronos is the global leader in workforce management solutions that enable organizations to control labor costs, minimize compliance risk, and improve workforce productivity. Tens of thousands of organizations in 100 countries — including more than half of the Fortune 1000® — use Kronos time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics applications. To learn how Kronos uniquely delivers complete automation and high-quality information in an easy-to-use solution, visit

© 2012 Kronos Incorporated. All rights reserved. Kronos is a registered trademark of Kronos Incorporated or a related company. All other trademarks are property of their respective owners.


Kronos Incorporated
Indrani Ray-Ghosal, +1 978-947-3042


Kronos Incorporated
Indrani Ray-Ghosal, +1 978-947-3042