The twin forces of globalization and technological change have reduced the advantages of financial capital and superior technology as sources of competitive advantage.  At the same time, demographic change is rendering labor markets increasingly competitive.  Hence, in developed (high-wage) nations, the quality of human capital management (HCM) is arguably the only sustainable source of competitive advantage that remains in the manufacturing sector. 

With that in mind, McBassi & Company partnered with PlantSuccess to undertake an analysis of which human capital factors are most important in driving manufacturing plants' success across a variety of key outcomes.

Analysis.  Forty-five plants, primarily from the chemical industry, participated in this analysis.  McBassi collected data on numerous aspects of leadership, management, and development practices within these plants. 

Data were also collected on plants' performance (relative to their competitors or "world class" standards) on seven separate key business outcomes: profitability, productivity, asset utilization, ability to attract employees, ability to retain key employees, customer satisfaction, and process safety.

Findings.  Our statistical analysis revealed that the five most powerful HCM predictors of plants' overall success (equally weighting those seven business outcomes) are the following (listed in descending order of importance):

1. Hiring decisions

2. Innovation

3. Collaboration & teamwork

4. Accountability

5. Job design