Magazine article Personnel Journal

Insourcing Saves Jobs at Harman

Magazine article Personnel Journal

Insourcing Saves Jobs at Harman

Article excerpt

Facing a crunch, you ask employees to work harder and faster-and productivity soars. Now you know the same work can be done with fewer employees. What next? Most companies would answer: layoffs. Instead, Harman devised a plan to keep workers and productivity

Bertha Torres was a little nervous as she took the podium to introduce the President of the United States. As she addressed 1,500 of her coworkers in the makeshift auditorium, President Clinton stood behind herready to tell the employees of Harman International that their company is a model of ingenuity and responsibility that Corporate America should strive to equal.

In her 30-year career with Harman International Industries Inc. in Northridge, California, this was one job responsibility Torres likely didn't anticipate. A lead assembler on one of Harman's product lines, she was chosen for the honor because of her success in achieving growth and career longevity with the support of Harman's innovative programs. "I have mastered many jobs through company education and job training," she said. "The company has encouraged me to learn and grow." Torres is a model employee of a model company. And on March 8, she was the Harman spokesperson for employee loyalty.

Loyalty like hers is refreshing in a time when many of America's manufacturing operations face their competition by encouraging employees to meet high productivity demands, and then-once those have been met-rewarding workers with layoffs. Harman International has found the solution to this riddle. Instead of standing on the sidelines shouting cheers as assemblers work themselves out of jobs, managers have created temporary projects and given otherwise-idle workers a second chance at employment.

Harman develops a backup plan. Harman International, based in Washington, D.C., employs 8,000 people worldwide. Harman is a leading manufacturer of high-quality audio and video products under several brand names including JBL, Infinity and Harman Kardon. Like manufacturing companies across the country, it has been pushing to achieve higher levels of productivity. With better processes and designs, more advanced technology, and an emphasis on training and development, its workers now produce nearly three times the dollar value they did just three years ago. The consequence, of course, is that these workers are becoming so efficient that it now takes fewer of them to accomplish the same work.

Other factors that impact labor demand include seasonal sales fluctuations, market conditions and availability of materials. At some other companies, these conditions might have meant layoffs. But visionary leader Chairman Sidney Harman, a 40-year veteran of the sound business, chose to view them as a challenge. "We have no greater responsibility to our employees and our shareholders than to free employees from the threat of job loss, simply because they respond to our urging for greater productivity," Harman says. "That increased productivity is critical in an exponentially more competitive world, and we must seek improved processes and design in order to reduce the direct labor content in our products."

Sidney Harman's idea was to create a job bank of projects that assembly workers, or employees supporting assembly operations, could be temporarily redeployed to work on until demand for their labor picked up again in their original jobs. Dubbed Off-line Enterprises (OLE), this program encourages employees to approach productivity improvement strategies without the fear that they may be working themselves down the road to unemployment.

Sue Hammond, VP of HR for Harman Consumer Group Manufacturing Operations, says: "OLE has created a job bank of projects to draw upon for employing surplus employees should the need arise. Our real goal, of course, is to never use these jobs. This requires that production remain at a high level even with productivity improvements and advanced technology. …

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