Human Resource Management - Essay Example

?Organisations are working in a globally inter-linked environment today. Their stakeholders, including suppliers, s and employees, are from different cities, regions and often countries as well. This implies that organisations exist in a sphere which is heavily influenced by many forces. This essay intends to shed some light upon the external environment factors that the human resource management systems of companies face. Aim The aim of this essay is to investigate the various external environmental factors that affect HRM systems today. Focus The focus of this paper will be on the effect of environmental factors on the HRM systems utilized for employee resourcing and talent management in an organisation in the U.K. Organizations do not work in a vacuum and have to rely on cues from the external environment to decide where the company is headed and the kind of talent it needs to take it there. While the environment can prove favourable at times, it can also drastically and negatively affect company business; consequently, having an understanding on how to deal with these, from an HRM point of view, is very important. Employee Resourcing and Talent Management: Analysis and Significance For the purpose of this essay, the chosen system is the Employee resourcing and talent management system of HR. Identifying new resource and hiring it happens to be the most basic function of any HR manager in any organization, irrespective of size and scale of operations. A more advanced but still extremely crucial level of HRM is the management of that talent and utilizing it in such a way so as to maximize overall output and efficiency. Unemployed talent represents people who are living within the same external environment of the organization and are experiencing similar pressures but are not a component of the internal culture and environment of the company. This difference, according to Marchington and Wilkinson, signifies the biggest opportunity for HR and the role it can play in changing the course of the organization, i.e. by hiring the right kind of people to be a part of the organization, who have the same values, but a different vision. Another area of opportunity was identified based on the results of a study conducted by Gibb (p335) which states that a statistically significant number of people believe most HR managers to be lacking in the resourcing and retention functions. External environmental influences and their impact on HRM systems and service delivery there are many influences that affect HR decision making and strategy. A detailed analysis of the external ones is given below: Political The government has been making deliberate attempts at curtailing the influx of foreighners into the U.K. – whether as workers or as immigrants. Fluendy (2011) comments on the great demand for foreigners in the U.K. for the fields of IT, engineering and accountancy, as well as in nursing and technicians. The government has been openly and sometimes surreptitiously implementing laws that discourage people from hiring workers from outside. The policy on immigration here has not been as it is implemented in other countries, with its aim since the 1960s to limit provision of U.K. citizenship and acclimatizing immigrants already present in the country (Boswell 2008). Despite that, more than 2 million immigrants have come and settled in the U.K. in the past decade or so. Job creation, unfortunately, has not been able to match this influx. These affect directly the labour market and thus the resourcing needs of HRM. Legal The stock market crash has instigated investigation into the effectiveness of the Financial Services Authority. Of late, insider dealing has been banned in the U.K., says Barnes (2010). Furthermore, discrimination control laws are in place. In late 2010, the Equality Act 2010 was implemented which is aimed at harmonising all existing anti-discrimination legislation (Davies 2010). With the labour market an amalgamation of so many nationals, HR needs to be well cognisant of the law for proper talent management. Economic In the process of recovery from the recession of 2007, the economy is witnessing unusually higher interest rates. Default rate is also very high, with banks sitting upon non performing loans. Unemployment is very high as well. Globalistaion has allowed easy access to move company operations to cheaper countries so there has been a drastic shifting of various concerns, particularly manufacturing to developing countries like China, Vietnam, India and Brazil where labour is relatively cheaper. Despite that, manufacturing remains a huge component of the Gross Domestic Product of the U.k., ranking number three among biggest contributors, after business services and wholesale and retail sectors (“Manufacturing in the UK: An economic analysis of the sector”); it represents 8% of total U.K. available employee base (“Manufacturing in the UK: An economic analysis of the sector” 2010). The stock market is moving on a snail pace, after the crash. Banks are faced with liquidity concerns. Slowly and gradually, stock value is picking up. Social Conditions The financial sector crash has rendered many people unemployed and worse, poorer: they have emerged from the recession without jobs and with a remarkable decrease in their savings. The U.K is also seeing an ageing population, where birth rates are relatively lower. Women are actively seeking high paying and high performance jobs. Many immigrant communities have established all over the U.K with people coming in from the Far East, South Asia and Africa. This has somewhat skewed the income distribution among the population. Since 2004, many people from East Europe have also come into the U.K. to seek job opportunities. Now while they may be educated to secondary school level, they are usually employed for blue collar work. The concrete welfare system of the U.K. has encouraged many British to happily stay on welfare. Thus, the attitude towards work is very different from that of the immigrant population. In recent years, the U.K. has also seen greatly increased consumer expenditure, particularly for high end goods and more expensive passions: travel ranks very high among them, according to Birch, Barrett and Weidmann (p248). Word of mouth affects how people perceive the industry as a whole and determines the kind of labour (skilled, semi skilled or unskilled) any company will be able to attract. HR plays a role crucial role in developing the PR of any company this way. Technological The ubiquity of the internet has made very informed and well connected communities. Technological advancements have resulted in better products, shorter product life cycles and streamlined processes. HR must utilize this as a resource. Environmental The world is witnessing increasing attention to greener technologies and waste reduction. A lot is spent on environmental projects for CSR. HR, however, does not play a crucial role in this. laws HR and the External Environment As mentioned in the PESTLE analysis previously, HR functions of resourcing and talent management are most concerned with the legal, political, social and economic factors. That is because these factors determine how the organization will survive: these factors can positively affect the company by providing opportunities and strength, as well as negatively when they become weaknesses or threats, as explained by Johnson et al (2008). In response to these factors, HR must: 1. Conduct elaborate research to be well informed about how these factors are continually changing. HR must be well versed with employment legislation in place. 2. Collaborate with finance department to forecast long term financial implications of recruiting specific people for specific roles. 3. Have detailed budgeting for talent management so as to invest most in those with the most potential The recent years have seen many changes to the way HR service delivery was traditionally expected and carried out. Today, the roles and impact are all very different. Taking a look at the changes in service delivery we realise that there are many new arenas through which HR is carrying out its activities. For resourcing and recruiting purposes, increasing number of companies are looking at e-recruiting websites for their resource requirements, say Maurer and Liu (2007) in their report on the method of developing effective e-recruiting websites that work. Another recent trend in the HR service delivery department, according to Marchington and Wilkinson (p137) has been the outsourcing of HR activities such as training and development, recruitment, counselling, etc. This has not, however, become such a global trend that companies have stopped having an internal HR function. Some activities, like training, continue to be majorly outsourced. Roles of HR To address the external environmental factors in its role as the provider of resourcing and talent management services in the organization, HR must adopt the following: 1. Ulrich Model The Ulrich model1 is one of the best tools that can be used to define new partnership roles that HR can play, with specific consideration to the external environment of firms. The Ulrich model since its time of inception in 1997, has emerged as one of the most powerful forces in changing the way HR is now perceived, i.e. as a strategic business partner (Holbeche 2009, p20 ) rather than an individually existing support function to the business; Ulrich and Brockbank say that HR wasn’t considered central to the business previously. These must be implemented looking at the strategic needs of the company. The HR Manager must play a Strategic role by connecting the overall company strategy to HR policy. This ways they assist in carrying out the strategy. When the strategy is crafted, company leadership takes into consideration the current and potential environmental factors that might or might not affect the country. HR managers must take on the role of implementing this strategy across the board the training people on using it as well. In terms of employee resourcing, this role places most importance as the strategy for a particular year, for example for infrastructure expansion, needs people with experience in supply chain. HR will thus recruit suitable people who will implement this strategy. HR managers must also become the employee champion, as in the person that the employee trusts and confides in. Such a role is especially needed to protect the company from making any faux pas as far their employee relations are concerned and ensures that no kind of discrimination, inadvertently or not, takes place in the workplace. This role is most important for proper talent management. When HR and employee are perfectly in tandem, then HR knows the strengths and weaknesses of the employee and is able to manage him and his career better. This is not to say that the other two roles are not of importance. However, for the purposes of resourcing and talent management, the two roles mentioned previously are more important. 2. Labour Process Theory Braverman’s theory of Labour Process, which is the breaking down of worker autonomy to the levels of unskilled labour is not feasible for talent management. For effective talent management, systems should be in place which increase the value of the human capital, says Schweyer (2010). Critical Perspective of the HRM system Employers today are well aware that the adequate recruiting of employees is one of the biggest issues that they are faced with right now, says Langan (p1). Therefore, they need the best team in place for HR which can interpret cues from the external environment and utilize them for the company. Resourcing would be useless, otherwise. The softer perspective of HR, placing people as a value-added resource essential for priorities like customer service, has not always worked, say Lucas and Deery. Often there is need to treat them just as a resource, without aspirations or feelings, they say, which is the ‘hard’ concept of HR, as defined by Legge model of HRM. There are countless examples on both counts of this dichotomy, some where the soft version worked, others where the hard one did. It is the responsibility of HR to interpret the correct ones and have the best resourcing and talent management capabilities in place. References Heather, A., 2003, "Building a workplace of choice: Using the work environment to attract and retain top talent", Journal of Facilities Management, 2:3, pp244 – 257 Boswell, C, 2004, ”UK Labour Migration Policy: Permanent Revolution?”, CeSPI. http://www.cespi.it/WPMIG/Country%20mig-UK.pdf 2011, “To please Tories, make a mainstream immigration policy sound tougher than it is”. The Economist. Blog. http://www.economist.com/blogs/bagehot/2011/04/david_cameron_and_conservative_party Birch, R, Barrett, J, Wiedmann, T, 2005, “Exploring the consumption and related environmental impacts of socio-economic groups within the UK”, Stockholm Environment Institute, University of York 2010, ”Manufacturing in the UK: An economic analysis of the sector”, BIS, Department for Business Innovation and Skills. http://www.bis.gov.uk/ Barnes, P, 2010, “Stock market efficiency, insider dealing and market abuse: the UK experience” International Journal of Business Governance and Ethics, 5:1-2 Davies, A, 2011, “Workplace Law Handbook 2011 - Employment Law and Human Resources Handbook”. Workplace Law Group, Cambridge Maurer, SD, Yuping, L, 2007, “Developing effective e-recruiting websites: Insights for managers from marketers”, Business Horizons, 50, 305–314. Holbeche, L 2009, Aligning human resources and business strategy, Butterworth-Heinemann, Oxford Marchington, M & Wilkinson A, 2005, Human resource management at work: people management and development, 3, CIPD Publishing, London Stephen Gibb, S, 2001, “The state of human resource management: evidence from employees’ views of HRM systems and staff", Employee Relations, 23:4, pp.318 – 336 Fluendy, P., 2011, “Employment law – Hiring skilled employees from outside the UK”, fmwf.com, http://www.fmwf.com/media-type/news/2011/03/employment-law-hiring-skilled-employees-from-outside-the-uk/ Langan, S, n.d., “Finding the Needle in the Haystack: The Challenge of Recruiting and Retaining Sharp Employees”, California State Personnel Board, http://unpan1.un.org/intradoc/groups/public/documents/UN/UNPAN021823.pdf Lucas, R & Deery, M, 2004, “Significant developments and emerging issues in human resource management”, International Journal of Hospitality Management, 23: 5, December 2004, 459-472 Schweyer, A, 2010, Talent Management Systems: Best Practices in Technology Solutions for Recruitment, Retention and Workforce Planning, John Wiley and Sons, NY Read More