Globalization and Job Security:
How to Discuss Globalization with Your Employees

Almost every day there is a report of an American plant closing, matched with announcements of new plants in Mexico, Brazil, Eastern Europe or some other low-labor-cost region.

The one-line quote from management is consistent: global competition, globalization, or external pressures are forcing them to adjust. These articles have developed over time into a constant drumbeat of job loss, downsizing and internal upheaval in a corporate setting. In the New Global Era, labor, just like capital and equipment, must be fluid. However, the truly global company requires experienced personnel. The company should be expanding, with all hands on deck.

Unfortunately, the senior executive faced with announcing a new global organizational structure, or announcing any kind of personnel change, is likely to face resistance from middle management and others who fear that their jobs may be eliminated in the process. There is no certainty in an uncertain world, but global companies are in a unique position to speak very positively about a secure workforce and solid future.

The news that most of your associates have read or heard is about companies who have not really gone global. Plants are closing because the company lost the orders, was too expensive or did not adjust to the new global environment. The employees, therefore, are looking at the shadows and footprints of globalization, rather than the process itself. It is extremely important to highlight this fact when talking with the workforce about globalization.

Globalization saves jobs

Working proactively, the global company needs experienced personnel. Most truly global companies are at least doubling their sales over the next three years. The real risk is that management is spread too thin, losing its focus and failing to obtain timely assistance. As a result, managers are needed who can serve in a multitude of new capacities that enhance personal and professional development. Globalization actually secures jobs.

Serving the global market focuses the demand of the entire world on your production capabilities. You can't simply duplicate your plant in five locations worldwide and expect flawless performance. It takes skilled labor in each location, experienced managers familiar with the product line and a certain volume of production to maintain efficient production.

Existing facilities are critical to the success of the overall global effort. Once other facilities are online, the "mother" facilities can shift focus to concentrate on key areas where they can be most efficient and integrate the production process with the new "daughter" operations. This transition can often occur without staff reductions. How? It has been Quadral’s experience that a company expanding to other countries to serve a customer will often receive additional local business from that customer – resulting in more business for existing facilities.

Check labor cost vs. part cost

It is also very important to understand and explain that lower hourly cost does not mean lower part cost. Mexico is a great attraction for low labor cost at this time, but when Quadral quoted production of a particular plastic part, production efficiencies in "high-cost" Germany actually resulted in lower part costs. Jobs in a global company are also more secure because you are not as subject to the waves of local economies as your purely domestic competitor. There are few recession valleys to wade through and fewer layoffs.

Globalization offers middle managers a great opportunity to use their understanding of the company culture, capabilities and technical know-how in a much more interesting way. They may lack knowledge of languages or may have had a narrow focus in their careers, but their depth of knowledge and experience can be their core competency – springboarding them into the role of a global manager.

One Japanese manufacturer is training a number of American managers back in Tokyo to become local production managers throughout the world. They have a very secure future and will be given a great degree of authority wherever they go. Managers who want to take responsibility for their actions, to experience new opportunities and to see new horizons, will be greatly rewarded in the New Global Era. Those used to paper-shuffling, deferral of decisions and "court politics" will be exposed quickly and have the greatest to lose. All employees should be given an equal chance to accept the global challenge, and those who do not accept their new role will do so by their own choice. The result will flow directly from their decision.

Placing the future of your job in your own hands is often a very scary situation in a large corporation. However, globalization rewards proactive effort, responsibility and initiative. Placing the globalization process in the hands of each employee provides a unique approach in management and can spark a truly exponential leap in productivity when properly directed. This requires constant communication with your associates, consistency in the message and a coordinated and mutual understanding of the real globalization process.