TOPIC 2 HUMAN RESOURCES Human Resource Planning “Sonny, when there is more than one of you in your organization, you are in the people business. You are not in the food business, a service industry, the widget business, the medical profession, or whatever other business you may think you are in - you are in the people business. You just remember that boy! “

Learning Objectives Identify the constraints and opportunities presented by demographic change Discuss the significance of labour mobility Analyse the workforce planning process Evaluate strategies for developing future human resources Discuss different methods of recruitment, training, appraisal and dismissal Describe reasons for and consequences of changing work patterns and practices HL – Analyse the impact on business of legal employment rights HL – Examine how recruitment, training and appraisal can help achieve workforce planning targets HL – Analyse the consequences of changing work patterns and practices on business HL – Apply Handy’s Shamrock organisation theory

So what exactly is HR?

Key terms Human resource management – strategic approach to the effective management of an organisations workers Human resource / workforce planning – analysing and forecasting the number of workers and skills of those workers required

What is Human Resource Management (HRM?) Using and developing people within a business to meet the objectives of the organization. WHAT? WHERE? WHY?

What would happen if you had the wrong number / type of staff?

Why HRM has become more important? Most businesses now provide services rather than produce goods – people are the critical resource in the quality and customer service level Competitiveness requires a business to be efficient and productive – this is difficult unless the workforce is well motivated, has the right skills and is effectively organised The move towards fewer layers of management hierarchy (flatter organisational structures) has placed greater emphasis on delegation and communication

HR strategies Sees people as an unwelcome cost People are an input to get work done Managers are the ‘thinkers’ – give instructions to workers! Sees people as an unwelcome cost People are an input to get work done Managers are the ‘thinkers’ – give instructions to workers! Hard Sees people as those who can add value to the business. A business needs to develop their employees skills, interests & abilities Managers are facilitators – to coach & help staff to do their work properly. Sees people as those who can add value to the business. A business needs to develop their employees skills, interests & abilities Managers are facilitators – to coach & help staff to do their work properly. Soft

HR strategies Treats employees simply as a resource of the business. Strong link with corporate business planning – what resources do we need, how do we get them and how much will they cost Treats employees simply as a resource of the business. Strong link with corporate business planning – what resources do we need, how do we get them and how much will they cost Hard Treats employees as the most important resource in the business and a source of competitive advantage Employees are treated as individuals and their needs are planned accordingly Treats employees as the most important resource in the business and a source of competitive advantage Employees are treated as individuals and their needs are planned accordingly Soft

Evaluation What are the benefits of having a ‘hard’ HRM strategy? Staff are well monitored Costs are minimised, Companies can increase / reduce output when needed. Greater centralisation / control by managers

Evaluation What are the benefits of having a ‘soft’ HRM strategy? High levels of employee participation, Higher motivation Greater commitment from staff, Lower turnover, Less absenteeism Greater productivity!

Demographic Change Potential supply of labour is affected by demographic change Example of demographic change OpportunitiesConstraints Natural population growthMay be easier to recruit good staff Increased birth rates may take years before they impact on the working population Net migration (immigration compared with emigration) May be easier to recruit good staff at lower rates of pay Highly qualified staff might be recruited from other countries Immigrants may need more training Ageing populationOften claimed that older staff are loyal and reliable Older staff may be less flexible

Labour mobility Occupational mobility of labour – Extent to which workers are willing and able to move to different jobs requiring different skills Geographical mobility of labour – Extent to which workers are willing and able to move geographical region to take up new jobs

Labour mobility: How easily can you work in a different place? Geographical mobility Depends on where your family and friends live Depends on the cost of relocation – Cost of moving to Mexico from Australia = US$19,000 (Flights $2,000; Car $10,000; Luggage $2,000; Furniture and House $5,000) Language and cultural differences Fear of the unknown

Labour mobility: How easily can you change career? Occupational mobility Skills of a worker: training, qualifications Age: Younger people are more mobile Specialisation: Very specialised people have trouble complying with regulations in another country Discrimination: age, religion, gender, race…

A high degree of geographical mobility – especially between rural and urban areas can lead to… High labour mobility can help achieve economic efficiency by…