Top exporter focuses on staff happiness

The firm, which has a staff of 9,500 at a factory in Prachin Buri province, supplies hard disk drives to its parent company, Japanese electronics giant Hitachi. At present it supplies more than half of Hitachi's global demand for hard disk drives.

In a recent interview with The Nation's Pichaya Changsorn, the Thai company's deputy managing director Nakorn Tangsujaritpun discussed some of the firm's human-resources and management initiatives designed to help it cope with the economic downturn.

Can you share some of your experiences from having been one of the first key people taking part in the development of the hard disk drive industry in Thailand?

I was not the first for the industry here, although I was employee No 1 of Saha Union United Technologies, which was set up about 20 years ago when IBM Japan decided to select it as a subcontract manufacturer. When IBM decided to construct its own factory I moved from Saha Union, as part of the agreement, to help IBM build its plant here in Prachin Buri in 1997. Then, in 2003 IBM sold this plant to Hitachi. Without applying for a job, I had already worked for three companies.

Actually, my first company was Motorola, but I worked there for less than a month before I was lured to join Saha Union by [its chairman] Anand Panyarachun, the former prime minister.

How much impact has Hitachi GST felt from the global economic crisis?

For the past 16 years, our output has increased every year. Early this year, we thought 2009 would be the first year output would not increase. But now we think we will maintain the records again this year.

We had seen some signs [of the downturn], so we were prepared. We cut overtime from three to two shifts. We introduced 27 cost-reduction measures, such as a salary freeze, cutting fuel allowances for executives by half, adjusting the temperature of air-conditioners and skipping new give-away uniforms. These measures were designed for survival, so we would not have to lay off staff.

Now, we are faced with a labour-shortage problem, having ceased overtime payments for six months [which led some workers to quit]. We recently recruited between 700 and 800 new workers and are hiring 900 to 1,000 more staff, including 40 engineers. We've resumed our "members-get-members" programme, under which staff members who find new workers are paid a reward.

What have your management initiatives been, to cope with the economic crisis?

Last year, we began to teach workers about debt management. Siam Commercial Bank and Kasikorn Bank sent their managers to help us train our staff on financial management and saving, and they offered special loan packages to our staff so they could refinance their debts. We also invited monks and a psychologist. When the price of rice soared up, we clinched a deal with a rice mill to visit the plant to sell rice to our staff at discount prices. They made Bt300,000 in one day.

We initiated the Hitachi Card, which provides a 10-per-cent discount for employees at selected shops in Prachin Buri. With 9,500 employees, we have exploited our status as the largest employer in the province.

During the period of hardship, we intensified our internal communications. I sat down and talked with the union. We set up an IT learning corner. Now we're conducting trials an internal radio-broadcasting system on which a disc jockey plays songs and keeps staff up-to-date with relevant information and [details of the] company's activities. I set aside time to talk to the staff three or four times per day, one hour each time.

Based on the Thai Health Promotion Foundation's "happy workplace" concept, we have introduced a "Hitachi Happy Organisation" campaign. Since most people spend more time at their offices than in their homes, we feel the company should do more than [just] give our workers salaries. That's why we helped them to refinance their debts, we educate them, we buy cheap goods for them, we allow them to sell papaya and lemon to our canteen, we hold sports activities and we opened a "walking street", where staff can bring in goods to sell to each other.

We have come up with an employee happiness index survey. We have instructed functional heads that one of their tasks is to achieve employee happiness. I'm pushing for the index to become part of the KPI (key performance indicators) of the site, because we have found it's related to the staff turnover rate.

For operational staff, the average length of employment is more than three years, and for office workers, more than five years.

How have you coped with high volatility in orders, particularly when you have not resorted to subcontracting or hiring temporary workers?

I don't believe in the subcontract worker system. We adjust through decreasing or increasing the amount of overtime worked.

Can you elaborate on your performance excellence programme?

That includes Small Group Activities. We have what we call "Hitachi Money". Staff can accumulate this by achieving work, doing good things, and providing suggestions and ideas to the company. They can redeem their "Hitachi Money" rewards by choosing items such as bags or jackets. All of these rewards have the company's logo attached. Last year, we received a total of 9,000 ideas from the staff, which helped the firm to reduce its waste and costs, among other things.

You shipped goods valued at US$2.8 billion in 2007, worth about Bt90 billion then. What is your latest export projection for this year?

Exports by revenue have continued to decrease since we have managed to reduce our costs. This year, exports should total between Bt70 billion and Bt80 billion, if [the value of the] baht averages around the present rate.

pichaya@nationgroup.com