Textile News, Apparel News, RMG News, Fashion Trends
News & Analysis

Capacity building is more effective rather reduce ‘Management Costs’ in the Bangladesh apparel sector

Bangladesh textile and apparel manufacturers are struggling on profitability due to higher production cost. Lower prices from brands and recent wage hike are contributing to increasing the cost more. Textile and apparel manufacturers are looking for ways to keep the cost affordable. Management staff is no exception to be considered as high cost by the textile and apparel manufacturers. To keep the overall salary expenses within a limit, recently many companies are looking for ways to reduce ‘Management Costs’. Many staffs are being fired in this regard.

Capacity building reduce RMG cost
Figure: To reduce ‘Management Costs’ in the Bangladesh apparel sector investment behind the capacity building and employee training is paramount.

Instead of investment behind the capacity building and employee training, the trend to shorten the size of the management staffs or limiting salary expense may not be effective to save cost. This may lead the whole industry to cripple into collapse in the near future. So, it is high time for manufacturers to think twice before cutting the size of management staff.

Cost for paying salaries to the management staffs

For the textile and apparel manufacturing company’s contribution of the cost for paying salaries to the management staffs (staffs other than supervisors and workers) is usually very less. It is mostly less than 25 percent of the total salary. Management staffs and other types of decision-making jobs are classified as an exempt job. They are responsible for thinking operations, customer support, legal counsel, marketing, strategy engineering management, program management, and finance. An error may cost him his life and several others, the cost of the company may billions of dollars. On the other hand, non-exempt jobs related to worker usually get a wage or an amount of money per hour and paid over-time. An error may not cost bigger than that of management staffs. So, good pay for the management staffs highly important to keep the organization profitable and sustainable in the competitive market.

Key responsibilities of management staffs 

A profit organization exists primarily to generate profit and aligns the team with profit goals. Hence the most important parts of running a business is planning. Management staffs usually contribute in value addition, implementation as well as providing the resources and process discipline to enable and ensure the highest possible level of quality, reliability, and productivity at the lowest overall cost and securing profit. Management staffs also put efforts to build a productive, dynamic and sustainable business and ensure the industry to run for a successful robust business. Proper business execution is important to increase volume in production and reduce risk and make the business adaptable to the market and other changes.

Textile Today Training is integrating the resources joining hands with many experts and organizations to create an effective platform for helping the industries to transform their human capital. The campaign of Textile Today named ‘Transforming Human Capital’ is helping to create awareness on the importance of professional level on job learning and training.

Below things should be considered before reducing management cost:

Job insecurity and extra load on management staffs: Unless building capacity in the management staff the trend of reducing ‘Management Costs’ by direct and indirectly cut off management size is resulting job insecurity in the organization. This is an extra load on management staffs for chances of losing the position and to search for new job opportunities, as a whole the organization is becoming less innovative and rigid to changes and development in the individuals.

Also Read: Textile Today and Northern Tosrifa Group joined hands to create skilled professionals

Focusing to increase value addition may not effective: Most of the textile and apparel industries are focusing to increase value addition to innovate in product and process development rather invest behind people. Instead of creating strong marketing team to reach out to better markets, instead of an employee development plan by training if the textile and apparel companies reduce ‘Management Costs’ resizing management part in number and salary strategically the whole sector once again may cripple into collapse in near future.

Investment behind innovation and productivity: If the key challenge for the sector is to increase profitability, the approach companies should have taken is to increase investment behind innovation, improving business processes to increase efficiency, productivity and performance as if the company become adaptive and less prone to market shift. The innovation will not only improve the chances of business surviving but also help it to thrive and drive increased profits.

Investment behind the technology: Technology Adoption is good but needs to be careful if that technology doesn’t reduce scopes of being innovative and adaptable to change. Big investment behind technology may reduce the cost of per unit product today but it may make the industry captive to limited products, processes etc. The industry is making another great mistake as they did previously by just increasing capacity adding new machinery, now making management smaller and incapable depending mainly on technology, the companies in future may become more captive other value chain players.

Investment behind capacity building among the management staff  

Employee development can be seen as a benefit by offering training, continuing education, conference attendance or even something reading practice of a book, professional magazine to be updated in the same line of the modern world for process and technology adaption. It has been proven that investment and expenditure behind management people always shift the business towards sustainability and give better capacity to remain competitive. Capacity building project among the management staff, on the contrary, make business lively, innovative, and creative and can help fight any sort of market change and challenge.

Capacity building among management

The above figure shows how investment behind management staff by offering training can improve process development as well as the machine’s productivity. Because men run the machine and apply new process so investment behind people is more effective rather than investment in automation or process development.

On the other hand, fast fashion is a high changing world. Once the industry adopts a high-cost technology, it is very costly to change. But people are much easy and fast changeable. And sometimes by reducing the number of management staff and more centralizing the power within limited management people may drive the business towards more one-man-show. The consequent is lack of innovation and delay decision over the problem by the limited management staff can be offensive and unproductive.

So, it is high time for manufacturers to think twice in reducing their capacity to deal with changes.

Today it is well understood that investments behind human provide a fastest and safest return.  Textile Today Training is integrating the resources joining hands with many experts and organizations to create an effective platform for helping the industries to transform their human capital. The campaign of Textile Today named ‘Transforming Human Capital’ is helping to create awareness on the importance of professional level on job learning and training.

Read More: Textile Today launches training program to create efficient professionals for implementing SMS in the factories

Besides Intertek-SEIP, BKMEA-SEIP, BGMEA-SEIP, BUTEC-SEIP etc. are some collaborations under which institutions are providing training to build a skilled workforce in the textile and apparel sector.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

Related posts

EPB and BUFT sign agreement to develop skills of mid-level managers of garment factories

Textile Today

Textile Today and Northern Tosrifa Group joined hands to create skilled professionals

Textile Today

Local managerial capacity building: what it means for Bangladesh?

Textile Today

Latest Publications

View All