HRD Function in Manufacturing and Services Sectors: A Comparison

The previous articles discussed the role of the HRD function from a wide variety of perspectives. We have seen how the HRD function is pivotal to the success of contemporary organizations. This article compares the HRD function with regards to its relevance and operation in the manufacturing and service sectors.

Before launching into the salient aspects, it is pertinent to note that the human resources are more critical to the success of the organizations in the services sector as compared to their importance in the manufacturing sector. The primary reason for this is that human resources are considered as an asset and a source of competitive advantage in the services sector whereas they are yet another factor of production in the manufacturing sector.

The HRD function in the manufacturing industries is often concerned with payroll, administrative work and mediating between the management and the workers. Mostly, the manufacturing companies lean on the HRD function in times of labor unrest and strikes. On the other hand, the HRD function is pivotal to the success of the service sector companies as they are seen as enabling and empowering the employees in the services sector.

The point here is that in the service sector companies, the HRD function plays a more important role as the chief sources of competitive advantage in these companies are the human resources. In the services sector like the financial and technology companies, the brand value is measured according to the level of intellectual capital which is a derivative of the contribution of the human resources in the company.

Further, the services sector runs on human resources whereas the manufacturing sector uses machines and equipment as the key aspect of production. This means that the HRD function in the services sector has to ensure that the human resources are enabled and fulfilled to actualize their potential.

Especially with the prevalence of the RBV or the Resource Based View of the firm that treats human resources as being central to the functioning of companies, the services sector employs different methods and procedures to fulfill this aspect.

On the other hand, the manufacturing companies are still in the process of orienting their strategies towards the RBV and in many cases, they might not be able to do so since the mode of operation is fundamentally different from that of the services sector.

Finally, the manufacturing companies have classification of employees into blue collar and white collar roles which creates a barrier to the way in which they are treated and they in turn demand their rights.

On the other hand, the services sector has only white collar roles which mean that labor arbitration and mediating between organized unions and the management is virtually non-existent. This is an important and crucial distinction which often determines the differing perceptions of the HRD function in these sectors.

In conclusion, contemporary management theory has evolved to a point where the HRD function is being crucial in all sectors and the coming years might see a paradigm shift in the way human resources are conceptualized with the advent of knowledge worker in both manufacturing and services.