Interview with Dr. Mohammad Hosseini: Attention to Skilled Human Resources, the Key Factor in the Advancement and Development of the Steel Industry
The importance of well-trained and motivated human resources is considered the key to the success of any organization. This is an accepted principle in modern management science. If the leadership of an organization can guide all of its human resources in alignment with the organization’s goals and direction, it can easily overcome challenges and obstacles to achieve its objectives. Industrial institutions, particularly the steel industry in Iran, need effective management of human resources in comparison with their global competitors. In this regard, we had an interview with Dr. Mohammad Hosseini, a PhD in Business Management with a specialization in Organizational Behavior and Human Resource Management, and the Head of Human Resource Research at Mobarakeh Steel Company in Isfahan, where we posed our questions.
What are the main challenges that steel companies face in managing their workforce, particularly in terms of skill development and employee retention?
The challenges we face in human resource management within steel companies are similar to those experienced by other industries. The reality is that the shortage of skilled labor across various sectors, especially in our country’s industries, is becoming a serious issue. In this regard, we encounter problems both at the operational level with non-university-educated workers and in skilled labor positions that require technical knowledge, and the effects of these issues are somewhat visible.
The reason for this is the different policies in the way education and curricula have been developed over various historical periods, which has created a gap between the available human resources and the needs and demands of the industry. In the current situation, it seems that this gap will only grow. We are now witnessing that non-experimental science fields, which should make up the majority of our workforce, have very few university applicants.
On the other hand, in our universities and schools, less attention is paid to teaching the necessary skills to those who are going to become part of the workforce in the future. Instead, more focus is placed on imparting general knowledge, which is sometimes even unhelpful, even for the individuals themselves. The inflation and economic challenges that exist in society are surely contributing to a decrease in the motivation of the workforce across all professions, industries, and service sectors. This phenomenon also creates difficulties in retaining human resources.
This situation has led individuals, in addition to working in industry or the service sector, to constantly look for alternative ways to make a living. In fact, the wages they receive do not cover their living expenses, and as a result, they do not dedicate their full effort to their primary work.
On the other hand, the steel industry itself, as a sector with many physically demanding jobs, has less appeal for the new generation of workers. Potential employees, who we could easily attract in the past, now prefer to work in digital-based jobs such as blogging, vlogging, trading, and other similar professions, or choose to work in the service sector instead of industry.
Another challenge in securing human resources for industries is the issue of migration, which we are aware of and know it has an impact. Currently, the age of migration has increased, and trained workers are migrating, which affects the shortage of skilled and motivated labor. Motivation and interest in work are sensitive issues.
When the need for skill development arises, it undoubtedly makes our job more difficult and forces us to teach even many of the basic skills in jobs that may not be considered highly advanced within the industry itself. In fact, we bring in the best available workforce for the industry, but we have to train them ourselves. These are, after all, the challenges we face.
Another challenge we face in the steel industry is working with older technologies, while our competitors globally are utilizing more advanced technologies. One characteristic of older technologies is that they are less human-friendly; in other words, newer technologies tend to be more human-centered. The issue of employee health, in the long run, will significantly impact both the employer branding of the steel industry and will also create additional costs for business owners. What could be a greater cost than the possibility of losing the individuals we have worked so hard to attract?
How can human resources departments in steel manufacturing companies adapt to the increasing trends of digital transformation and automation, while maintaining employee motivation and engagement?
We must ride the wave of digital transformation, but the most important issue is to view digital transformation not only as a technological matter but also as a human one. We need to address various aspects, including the technological side of human resources. First, the services provided to employees should be offered electronically. This is essentially the initial stage of digitization. By doing this, we create a better experience for individuals and improve the speed at which welfare services are provided to employees.
Next, digital transformation should be prioritized in terms of skill development among the leaders of the steel industry, as well as the employees within this industry. We need to improve digital literacy both among leaders and employees. Alongside this, we must consider that digital transformation should always be approached with a business ecosystem perspective, focusing on the broader business ecosystem view.
As those responsible for the steel industry, we must strive to empower the ecosystem around us, no matter where we are in our beloved country. The ecosystem has various components, one of which is certainly digital service providers, another is universities, and also social activists. We need to focus on raising awareness within our ecosystem. We must manage our human resources more effectively.
It is important to make better use of the media resources at our disposal and utilize cost-effective communication methods. We must also take advantage of new technologies to create a connected community with our colleagues and within our organization. We should not leave them isolated in the waves of both virtual and real-world spaces in ignorance. Using these strategies will undoubtedly reduce our costs, improve the quality of our services, and enhance our brand.
Discussions such as remote work can also be considered in certain areas and sectors of the steel industry, but due to the operational nature of many jobs, it may present challenges for us. Digital transformation can be effective in improving many of our processes. The key point is that we must view this transformation as an opportunity.
We must utilize various tools available in the digital space to ensure that some of the jobs in our field, which are hard and harmful to humans, are no longer detrimental. Many of these tasks can be delegated to machines using automation; robots can be used in challenging situations. In the health sector, we can take advantage of various gadgets developed in this area. The use of IoT, which has greatly expanded, can even be applied in human resources management.
Organizational behavior plays a vital role in productivity and innovation. What actions can steel manufacturing companies take to foster a culture of collaboration, accountability, and innovation among their employees?
The biggest factor shaping culture, responsibility, and encouraging innovation is definitely the leaders of each organization. Therefore, we must primarily strive to raise awareness among leaders about the important role they play, using the knowledge of organizational behavior management and human resource management, and also empower them. However, the empowerment of leaders is effective only when their selection is based on merit. This means that if we have not made the right choices in selecting leaders, the concept of empowerment becomes largely meaningless and unachievable.
Therefore, first and foremost, we must strive to choose leaders who believe in collaboration, responsibility, and innovation, and who value the growth, participation, and respect of individuals. In this way, they can guide people along this path through role modeling and supporting developmental processes, as well as through the designs they implement.
After selecting the right leaders, we must also seriously and effectively focus on leadership development. It is essential to continuously improve the leadership style of our leaders so that the organizational climate and, ultimately, the organizational culture are enhanced. An important aspect in this regard is having leaders who are well-suited to the steel industry. Naturally, when we talk about the steel industry, we need leaders who can withstand the turbulence of this industry and, in all situations, remain steadfast in their principles and continue to move forward in the same direction.
After focusing on the role of leaders, we can certainly undertake various activities using the knowledge of organizational behavior and human resource management. Today, there are many modern techniques for selecting qualified employees, which are, of course, adapted to the needs of both small and large companies. In the area of “employee retention,” we can implement various activities, and the same applies to “employee development.” In fact, we can manage our employees much more effectively. Certainly, “culture” will be one of the most important elements of our management. Moreover, we must introduce and utilize suitable and intelligent strategies into our field of work by analyzing the environment and market.
What are the best strategies for talent acquisition in the steel industry, especially considering the unique needs of this sector and the global competition for skilled labor?
First, we need to determine which part of the steel industry and which category of employees we are talking about. The discussions will certainly vary depending on the different sectors of the steel industry. Moreover, strategies may differ across various areas within the steel industry itself.
Talent acquisition is carried out through methods that are well-known and scientific, such as tests, interviews, and the use of assessment centers. Today, focusing on technological and digital infrastructures can assist us in this regard. We have access to online labor markets. For example, we can utilize LinkedIn and similar domestic and international programs. Platforms like Indeed and LinkedIn have created major infrastructures globally, and I believe we can rely on these tools to both source talent for many positions and attract a broad range of individuals. Additionally, using these methods can help reduce our costs.
For this purpose, defining standard job roles within various sectors of the steel industry can clarify the situation for individuals who are potentially ready to join this industry, making it easier to attract them to the steel sector. Such processes might help us find these individuals more effectively and efficiently. Naturally, the competencies required for standard roles can be defined in a standardized way. The necessary capabilities are clearly defined, and the skills are also specified in a standardized manner; thus, the right person for the right job is chosen with the highest likelihood of success.
Competence, skills, knowledge, talent, and many other concepts overlap, and with a scientific approach, the necessary characteristics can be defined in a more abstract manner. We can leverage the new generation, who are highly interested in using these infrastructures, to help us.
However, for jobs and positions that are not yet part of platforms like LinkedIn, such as blue-collar jobs, we can focus on creating other infrastructures. Efforts have already been made in this area and are visible in the country. There are infrastructures in place for attracting simple labor, where individuals can find relevant job listings and connect with employers through them. From a macro perspective, we can address and cover this shortage in a similar way.
Alongside this topic, working on reputation and employer branding can also be an important factor. Developing a “value proposition package for job applicants” and communicating it to potential candidates who are ready to join us can be a very effective strategy in attracting talent.
An important clarification is needed regarding what has been discussed, as we are currently witnessing that job design in many steel companies is not done correctly. Many of them have only designed their jobs at a general level. Undoubtedly, addressing the organizational job structure and designing it properly can be effective in talent acquisition. After attracting talent, the next crucial step is retention, or in other words, “talent retention.” Paying attention to performance management systems and proper motivational systems can certainly complement our efforts and help us retain talent more effectively.
Given that the steel industry is highly competitive and often faces economic pressures, how can HR leaders strike a balance between cost efficiency and maintaining high employee satisfaction and morale?
The key point is that when we have difficult work, we must provide benefits to keep people with us. In this context, HR knowledge tells us that simply paying more will not guarantee employees will stay. If we want people to stay and work for us, we must offer more than what is currently set as the minimum wage by labor law.
If we want people to work for us, given that we know wages have been suppressed and haven’t grown in line with inflation, we must pay attention to employees’ living conditions. This is an important point, but the more crucial aspect is that we need to design a value proposition package for our employees that is tailored to each organization, which certainly won’t just include salaries and benefits.
In advanced organizations, this concept is known as the Employee Value Proposition (EVP), which refers to the benefits that an employer offers to attract and retain employees. These benefits are not solely financial. For example, how attractive your company’s environment is, how positive the atmosphere is, how much integrity and transparency are present, and to what extent the company is environmentally conscious, can be significant factors in retaining employees.
In this regard, we can also highlight how well employees in an organization get along with each other, how leaders interact with staff, and how much room for growth and development exists. All of these factors can play a role as competitive advantages in attracting and retaining employees. This is while salary increases might not be significantly higher than those of competitors. By offering a percentage increase of just seven or eight percent above competitors, more individuals are likely to stay with the organization.
It should also be noted that labor costs in our country are much lower than those of foreign competitors. A comparison between the minimum wage in our country and those in the region and around the world shows that we have significant leeway. Considering all the costs associated with our industry, labor costs actually represent a competitive advantage in our country, and from this perspective, we do not have much concern.
However, we should not focus solely on the cost aspect of human resources. Providing opportunities for growth and development, along with fostering enthusiasm and attachment among employees, can collectively lead to a higher quality of life for them. The very important point is that they should enjoy their work.
If, in the long run, we have fewer people, we might be able to manage with seven motivated individuals instead of ten. Ultimately, we would pay a total amount lower than the salary of those ten people, while also achieving significantly higher work quality and productivity.
Finally, it is important to note that although labor costs in our country are lower, this should not lead to us having a disproportionately large workforce compared to our competitors. In many large companies in Iran, the workforce is two to three times the size of that in foreign competitors. Naturally, when the number of employees is large, they tend to have idle time, which creates negative consequences for the organization. These are details that I hope industry professionals will pay attention to.
Thank you, Dr. Mohammad Hosseini, for the time you dedicated to us.
Steel World Review
