Problems and Solutions for Labor Management in Thai Automobile Suppliers

Abstract

This research aims to analyze the labor management problems facing Thai auto parts suppliers as well as to propose some possible solutions. The research was conducted by gathering data and information through interviewing 31 suppliers’ representatives and government agencies as well as a survey of 425 workers. Employing content and thematic analyses, the research has key findings as follows. The Thai auto suppliers have labor management problems in two stages: employment and management.  For employment, there are shortages both in terms of quantity and quality.  This study investigates 4 aspects of labor management within the workplaces. First, on recruitment and selection, four problems are outstanding, namely quitting, discontinuity in skill development, high labor expenditures, and delayed government procedures regarding the employment of legal migrant labor. Second, on the compensation system, there is no significant problem.  Yet, it was found that welfare is not sufficiently provided to labor.  Third, on skill development, there is a tendency that workers quit the job after having been trained and that Thai workers do not really desire skill development. Fourth, on labor relations, there is virtually no problem, as these suppliers tend to use kinship-like organization culture. Workers’ reaction on the four aspects of labor management are at moderate level.Considering each aspect, workers tended to agree with skill development the most, compared to the rest aspects which are at moderate level rated in the following order: compensation, then labor relations, while recruitment and selection came last. 

            This research proposes suggestions for firms and the government. For firms, employing migrant labor and adopting technology are suggested to solve the labor shortage problem.  Meanwhile, the emphasis on OJT is suggested to solve the labor quality problem. Regarding labor management problems, firms must add innovation in managing their employees, particularly on compensation management that could motivate workers to continue working and minimize quitting rate.  The government must have a clear, consistent, and integrative labor policy, particularly on the transition toward electric automobiles as the transition will create unemployment due to the termination of some suppliers such as suppliers doing business in automobile exhaust system.  The government should also emphasize more on dual system training as it helps graduates to have ready skill needed to work.  Regarding migrant labor, it is suggestible as a short-term measure that the government develop their skills to increase efficiency, while the Thai labor are yet to cope with new technology which suppliers are also slow to adopt or adjust themselves.