Monday, June 2, 2008

Got Talent? - The Penang Semi-Conductor Challenges

Less than a week ago, a friend mentioned about the challenges his company is facing in meeting the ever demanding salary packages nowadays in the semi-conductor industry especially in Penang.

Interestingly, Penang state is today the third-largest economy amongst the states of Malaysia, after Selangor and Johor. Manufacturing is the most important component of the Penang economy, contributing 45.9% of the State's GDP (2000). The southern part of the island is highly industrialized with high-tech electronics plants (such as Dell, Intel, AMD, Altera, Motorola, Agilent, Hitachi, Osram, Plexus, Bosch and Seagate) located within the Bayan Lepas Free Industrial Zone. In January 2005, Penang was formally accorded the Multimedia Super Corridor Cyber City status, the first outside of Cyberjaya, with the aim of becoming a high-technology industrial park that conducts cutting-edge research.

In recent years, however, this state is experiencing a gradual decline of foreign direct investments due to factors such as cheaper labor costs in China and India but it is still the closest contact point within Asia.

10 Top Manufacturing Companies in Penang

1. Intel
Intel is one of the biggest investors in Penang and surely enough is considered as the Golden Boy of Penang. Intel has a large number of facilities across Bayan Lepas, Seberang Perai and Kulim, Kedah and presently has one of the largest work forces in Malaysia.
Perhaps because it is so big and powerful, people either love Intel or hate them.
Those who love Intel will dream every night when they can work with them. People who otherwise hate Intel will come out with something like Face Intel that tells you every possible reason why you need not to work with Intel.

2. Motorola
While the size of their facility is not as big as Intel, Motorola is one of the best learning avenues for those technical oriented people as the company continues to stamp its presence with continuous innovation of new products as the years go by.
Motorola remains one of the most admired companies which nurtures and produces top engineering talents. Motorola plant in Penang is equipped with a world class Research & Development Center (R&D) and a Distribution Center. The only downside that I see is their uniforms. They just look weird.
Motorola recently was awarded the Chief Minister’s Award due to its contribution in developing knowledge workers in Penang and Malaysia.

3. Dell
Dell’s contribution in Malaysia earned the founder, Micheal Dell, a Datukship. After establishing Dell Asia Pacific in Penang, they have further stamped their commitment in the development of additional facilities by investing in new facilities in Cyberjaya, thus adding more jobs and creating more opportunities for the local people.
Dell Penang has an assembly facility that produces wide range of products including notebook and desktop computers. There is also a support division for Asia Pacific operation. This is where the call center people work around the clock attending to you, the Dell customers.

4. Sony
SONY brand needs no introduction. From its modest beginning as a producer of transistor radios, SONY is now a household name in electronic and consumer products market. For a number of years, SONY won a lot of accolades and awards for its continuous innovations and technology inventions.
Some of the hot products by SONY are the Walkman, Play Station, Cyber-Shot Digital Cameras, VAIO notebooks and many more.
SONY set up their first manufacturing plant in Prai more than 20 years ago and today employs over 13,000 staff nationwide. The Seberang Perai plant is another of Sony’s facility apart from the Bangi plant and an office in PJ, Selangor.
5. Agilent Technologies
Agilent Technologies’ current manufacturing plant was a result of a spin-off from Hewlett Packard company and was officially launched on 1 November 1999. The beginning of the original Agilent Penang was way back in 1970s.
Agilent’s main business covers the manufacturing of electronic measurement devices, sensors, medical and bio-medical equipment, networks and many more. Agilent follows many other players to exercise transferring some of the facilities to China but the current business operation in Penang remains vibrant.
And oh, in case you have not noticed, Agilent has one of the best, most professional and nicest security personnel around. Kudos to them.

6. Seagate
Penang Seagate was established in 1988 and primarily manufactures thin film magnetic recording heads, also known as sliders. If you don’t know what it means, just remember Seagate to be a company in data storage business.
In terms of employment, Seagate offers a wide range of opportunities including research, development, manufacturing, business operations, support and so on. Currently, Seagate employs over 50,000 staff worldwide, with their main facility based in Scotts Valley, California.

7. Jabil Circuit
A Fortune 500 company, Jabil Circuit is one of the major EMS (Electronic Manufacturing Services) providers in the world. (An EMS company is also known as a Contract Manufacturer.) Its Penang plant is located in Bayan Lepas Industrial Zone, facing the beach.
An Electronic Manufacturing Services company is a company that designs, tests, manufactures, distributes and provides service for Original Design Manufacturer, ODM and Original Equipment Manufacturer, OEM. In other words, it provides outsourcing services to the clients. For example, Nokia (OEM) outsources Jabil Circuit (EMS) to provide all the manufacturing and distribution service while the company itself focus on the research and development work.
8. Flextronics
Similar to Jabil Circuit, Flextronics is also an Electronic Manufacturing Services (EMS) company. Flextronics operates in more than 30 countries worldwide and helps its customers to design, build, and ship and service electronics products across the world.
Their plant in Penang is one of their many facilities in Malaysia that include Shah Alam, Selangor and Melaka. It provides Design Services, Component Solutions, Test Services and Manufacturing & Assembly. Flextronics offers excellent opportunities for professional growth, a competitive compensation package, and a highly collaborative work environment as well as international exposure.
In the latest development, Flextronics acquired Solectron in mid 2007 to create ‘the most diversified and premier global provider of advanced design and vertically integrated electronics manufacturing services.’ Their next annual revenue is expected to be more than US30 billions after the merger.

9. BBraun
BBraun is a worldwide company with established history of supplying medical products and solutions which include surgical, pharmaceutical and healthcare products.
BBraun was founded some 160 years ago, with it’s headquarter based in Germany. The Penang facility employs over 4,000 staff and is among one of the largest of their plants worldwide.
BBraun Malaysia is currently under expansion plan with as much as RM400 millions to be invested between 2006-2009
10. Avago Technologies
Just like Motorola which separated from the semiconductor division (the Motorola PJ, which we now know as Freescale Semiconductors), Agilent Technologies followed the same move in 2005 by separating with the semiconductor group.
As a result of the Agilent’s Semiconductor Product Group acquisition, Avago Technologies was born. Avago is said to be the largest privately-held semiconductor company. Avago’s plant remains in the same compound with Agilent, alongside the latter’s Test and Measurement Division.

It has become somewhat of an employee's market. So how do you hang on to existing talent?

Indeed, today's talent cannot be won over through basic methods such as increased remuneration. Attracting and retaining talent has become a corporate objective of some organizations, if not most at this stage. They are striving to improve their methods for managing, motivating and training talent.

Every employee is motivated for different reasons. It is important to capture this information as each individual stays and progresses within the organization. We will see an increasing trend in the use of human resources information systems and tools being used for updating key employee data and each individual's motivators.

To overcome this issue companies should develop an "employer of choice" mentality. They can do this by paying at least at 75 percentile of the job market; provide employees with challenging but interesting and developing work. In addition, they can strive to create a culture where all staff are expected to live the core values and have supervisors who realize their key role is supporting and taking an interest in their staff. Other measures like flexible work hours, the development of a collegiate atmosphere as well as a pleasant work place with good tech tools will also help.

Retaining employees today rarely depends on compensation as a sole factor. There are several factors involved such as benefits, job satisfaction, job recognition, job advancements, personal development, and recognition of contribution. Hence, companies will have to formulate a plan for employees to recognize their job objectives for the incumbent to contribute substantially to an organization. Through the plan, employers will recognize the shortfall of the employee's skills. It can then contribute towards developing an employee's skill-set through initiatives like training.

Growing shift beyond remuneration as a motivator?

Talent diversity and mobility present a lot of challenges for business leaders and HR practitioners where they have to manage staff retention, relocation and expatriate management matters as well as succession planning. While talent management is key, succession planning is just as important to retain knowledge held by retiring matured workers and ensuring there is sufficient time to coach and develop successors. One of the major challenges would be getting HR professionals to focus on developing line managers to be equipped with people management capabilities and evolving them into people managers, who are not just functional specialists.

The challenge for HR practitioners would be, how "seamless" can the HR role be performed and transited within the organization to minimize conflicts at the strategic and tactical levels are a real test to the organization.

However, the only constant is the measurement or the metrics factor. HR professionals must constantly assess, review and level up its competencies and capabilities to keep up to the needs of the changing business environment. It's only through this constant practice that HR practitioners can stay relevant and strategic, and be a long-term partner to work together with CEO, business and HR leaders to refresh and retain the talent pool within the organization.

Pay is always important among young talent. But increasingly the focus is shifting to providing work which moves them forward in knowledge and skill development. Secondly, it's having supervisors who understand that if they don't involve, listen to, and show genuine interest in their staff and their progress, then there are consequences.
More employees are looking for job satisfaction and recognition opportunities.

HR/talent management software, how has it helped the talent management process?

Today, we see integrated talent and compensation management programs that feature areas such as pre-employment skills and personality and behavioral assessments.
One of the leading technology companies in Europe created dedicated compensation planning software to allow HR managers to gain full access to performance history and succession data while planning and allocating merit and equity rewards within one system.

It helps in competency profiling and selection, the skill auditing, measuring and managing performance and in personal development and recognition. It also provides access to many aspects of personnel reporting and "at a glance" data.

The system has contributed to multiple aspects of our talent management process, especially for recognition of top performers and development of employees. The capability of generating analytical reports also helps the management and saves a lot of time for our HR people.

Increasing use of technologies is at the expense of the "human" factor or the personal touch in HR?

Technology or this "paperless" concept plays a value-adding and complimentary role to most HR processes and efforts. However, the human touch is still important and the use of technology can provide good support to tedious functional areas and take time away from heavy paper work. HR practitioners can focus more time and efforts in other soft skills aspects of the job such as providing coaching and counseling to employees, and working with leaders, business and line managers to strategize and map out competency roadmap to enhance knowledge and skills of the employees.

e-HR today provides a roadmap with systems and tools. HR staff will always need to be strong in EQ and especially the listening and empathy aspects. However, they will need to have more knowledge of the business and naturally be IT-savvy. HR staff in the future should be ex-line executives or supervisors who are seen as high-potential who then spend one year in HR before going back into line management.

With the help of technology platforms, HR professionals gain more comprehensive information on both individual employee and teams, which improves fairness in the organization. Other than that, transparency in communication within the organization is also improved. These are examples how technologies can help to avoid the problems of being too "personal". But after all, technologies do not make decisions for you, but target to provide you sufficient and analytical information for you to come out with good strategies. So the "human" factor in HR should not be affected.

Seeking your employee buy-in for the new processes or ways of doing things associated with the new technology tools?

We need to be "time-sensitive" and "profile-sensitive" to employees. Each individual learns at a different speed and it's important that the training in place be structured and allows more time to employees who might not be so savvy with technology. An orientation about technology or a refresher program might help.

Most people don't like change. People often only go to the doctor when they have pain. Show them the potential agony and then they will change. Even if present methods show no sign of real problems this still means continually including them in all aspects of the design and implementation process. By doing this, one develops understanding of efficiency and best practice processes and ultimately you gain commitment.
Educate the employees on the benefits of the change and how it would assist them in making the working environment better.
There is always a way to retain and attract than dangling that big carrot in front of mercenary workforce...