Human Resource Strategies in Cost Reduction - Coursework Example

Student Name: Course Name: Tutor: Date: Human Resource Strategies in cost reduction Introduction The development and transformation of the contemporary workforce as well as management of the generational employees is a very critical aspect of management that affects most of the today’s organizational workforce. Due to the emergence of such employees and various challenges possessed by them most of the organizations are forced to undertake different strategies in order to meet employees’ needs while reducing the costs. The human resource managers of various organizations should determine, make plans and involve in the implementation of the new policies as well as programs which can enable them to successively meet employees’ needs while effectively maintain their management and reduce organizational costs (Gary 95). To effectively undertake the challenge, the human resource management team needs to assess the entire policies as well as programs of the organization. This followed with the evaluation of employees’ needs. This is due to the fact that both the organizational and employees’ needs are achieved through the agreed policies and programs within the organization. The strategic role of human resource function in cost reduction and maintenance of the human capital The strategic way of managing the human resource is critical element to the human resource. The strategic initiatives of human resource such as effective teambuilding, flatters structures within the organization, and the approach to human invest idea which values employees’ skills, abilities and knowledge are very essential in the organization. In order to effectively manage the human resource, organizations are required to make as a focus on the idea of added value on the functions of human resource. Such a strategic approach involves some valiant efforts in creating relevant strategic partnerships within the human resource function, undertake participation of the strategic planning in the entire organization and transform the business strategies to the practices as well as policies of human resources in the organization (Gueutal & Stone 167). As a result of the strategic approach application, most organizations and the human resource as a function are expected to function in line with the intended objectives as well as goals with a consideration of upholding the competitive advantage and the ideal management of the workforce (Lepak & Snell, 42). One of the important functions in the management of human resources is recruitment. This is simply because the recruitment functions are viewed as the main gateway to ensure the functions of the organization are attained. Employees of a given organization are relevant people at the required time and with the intended skills. Therefore, such a function will involve the organization in the demand for employees due to the diverse nature of the labour force. However, other personal functions of the human resource such as personnel files as well records maintenance of the employee, processing of the documents, training, and compliance to the federal needs are also considered (Hamerman 117). The human resource management policies may as well be cantered towards the employees’ roles in the organization. This can be in form of initiatives which effectively promote the management approaches to the needs and benefits of the employees as well as considerations of the flexibility of work schedules. Organizations are therefore required to be cognizant of the great challenges for instance workers who face the struggle in balancing between family and the work responsibilities. Work flexibility offers the workers with the sense of self-control about their respective lives implying that organizations are able to make reductions in the cost of health benefits, increase morale, stress free and reduction of absenteeism cases among the employees, while maintaining the rate of productivity in the organization (Garavan & Gunnigle 56). Although, incentives as well as rewards are very much significant to the entire wellbeing of the employees, a consideration should be put on the value of well created work environment that lets employees feel encouraged and accepted into the organization. For effective achievement such an environment, accuracy in planning that considers the strength of future leadership should be maintained. This is sometimes known taken as talent management that puts a focus more on the strategic needs within the organization. It is very vital for the employees to have a feeling of belonging within the organizations; consequently, the organization contributes to an increased rate of retention through the creation of a work environment that is promising and future opportunities to the employees. The importance of retaining older employees as well as increasing their contributions via the efforts such as; phased-retirement and the hire-back programs, are also considered (Combs & Skill 69). Demand forecasting Demand forecasting concerns the prediction of the number and the kinds of people whom the organization will be in need of at a given time in future. Two major approaches that are greatly used in demand forecasting include; the statistical and judgemental approaches. Statistical approach With the statistical approach, the organization is involved in the prediction of its required workforce. It is typically applicable when the organization is considered to be operating in an environment that is stable, since the appropriate factors of the business can easily be predicted with specific degree of certainties (Brown 30). The most common statistical methods used are; trend analysis where the future demand for a given human resource is determined basing on the previous business trends in relation a particular business factor, the ratio analysis involves the computation of the exact ratio in human resource determination between a particular business factor and the required number of employees and the regression analysis which is comparable to both the trend and ratio analyses because forecasts are determined on the basis of a relationship between a given business factor and the size of the workforce (Meisinger & Dave 134). Judgemental approach The judgemental approach in demand forecasting considers the application of the human judgement instead of the number manipulations. The commonly utilized judgemental techniques are the group brainstorming that greatly focuses on the use of a certain panel of professionals in employee demand as well as sales force estimation. Supply forecasting Completion of the demand forecast enables the organization to have a comparatively good idea about the needed employees’ number and the kind of positions required in handling the work at a given time. The organization, therefore, makes the estimation concerning the kind of positions to be filled in a given time by such individuals who are considered as the organizational employees (Bontis & Fitz-enz 238). The supply forecasting is viewed as the two-step process. The first one involves the grouping of organization’s positions based on; title, responsibility level and functions, such grouping should imply the positional levels across to enable employee’s expectation in advancing. The second attempt in supply forecasting concerns the estimation of every job group, figure out the number of employees to retain their respective positions at the planning period and the number of employees expected to shift to some other positions via transfers, demotions as well promotions and the manner in which they will abandon the organization (Meisinger & Dave 134).These kinds of predictions take the previous mobility trend into consideration. In addition, the organization needs to value any kinds of plans involving the mergers, division divestitures, acquisitions, layoffs, downsizing and retrenchments. While making the supply forecast, organizations should consider examining certain individuals. The legal issues to be addressed by the GMS in reducing the size of the workforce The major problem in the current labour climate of the Global Mining Services (GMS) is how to cut down the costs in different areas of the company especially in the personnel department. Reductions in the workforce are extremely considered to be personal as well as emotionally estimated events. As a result, they usually contribute to the legal claims, since most individuals tend to feel unfairly treated. Therefore, the effective ways in downsizing the workforce with GMS in particular as the company of case study that is forced to undertake such measures, need to consider the following legal issues; Exercise complete planning During the early planning stage, the human resource management team should not identify the specific individuals that have to be terminated. The early identified lists appears to be very subjective making it hard to defend, this will expose the company to vulnerabilities and in control of the ant-discrimination laws. It is obvious that in case the entire function, department or rather job category is eliminated and such responsibilities will be no longer in progress and not performed in some other organizations, then there will be no selection duty of the human resource management. The GMS employer needs to make selection among the affected employees, enabling the selection process to be very uniform as well as objective (Hopeman 43). Establishment of fair selection process Establishment of fair selection process involves the determination of a very fair method and some defined criteria in selecting among the available employees of the affected departmental positions. The forced ranking system is considered to be the ideal method, the affected employees’ areas are ranked based on the cumulative points of a weighted criteria for instance; skills, previous performance, the period length in service and the versatility. Identification of the administrators for the process The GMS leadership should decide on whom to involve selection criteria on the affected positions or rather departments and the one to review the outcomes from selections. The best method involves the managers concerned with the areas to undertake the selection criteria from. Prepare a very proper documentation This is one other important issue that requires some special attentions prior to the selection’s commencement are documentation. The premature paperwork, informal kinds of email response concerning the selection decisions and the entire preliminary selection documents until the final decision is made. Communication strategy sketch Various employees who are selected for the termination need to understand why them; it means that the GMS will need to stay prepared with a genuine, concise as well as respectful response. The ability to discuss the workforce reduction and the retained employees with the effective address to their increased fears while avoiding permissions to the security of the future job must be reflected by the GMS management team (Jennifer 43). Stacy is very true in her claim of having the good case of using the redundancies as well as layoffs in downsizing the GMS workforce, this so because in addressing the legal issue of a good communication strategy, they will be in a position to provide a genuine response for opting to downsize the workforce since cash flow and excess human capital are the major problems to GMS company. Conclusion The challenge of the human resource function in the development of strategies that reduce costs while retaining the required human capital, involves the entire management team to effectively assess the entire policies and programs of the organization. The assessment leads to the evaluation of employees needs. Works Cited Dessler, Gary. Human Resource Management. 10th ed. Englewood Cliffs, NJ: Pearson/Prentice- Hall, 2004. Gueutal, Hal G., & Dianna L. Stone, eds. The Brave New World of eHR: Human Resources Management in the Digital Age. San Francisco: Jossey-Bass, 2005. Hamerman, Paul. HR and Administrative B2E: Maturing and Expanding. 31st July, 2010. < http://www.business.com/directory/human_resources/outsourcing/hrms_hri > Sue, Meisinger, & Dave, Ulrich, eds. The Future of Human Resource Management: 64 Thought Leaders Explore the Critical HR Issues of Today and Tomorrow. New York. John Wiley & Sons, 2005. Hopeman, Jennifer. Legal: Reducing Legal Risks When Reducing Your Workforce Association Management .Washington. Shaw Pittman, 2003. Bontis, N. & Fitz-enz, J. Intellectual capital ROI: a causal map of human capital antecedents and consequents. Journal of Intellectual Capital, 3 (3), (2002): 223-247. Brown, M. G. Human capital’s measure for measure. Journal for Quality & Participation, 22 (5) September/October, (1999): 28-31. Combs, J. G. & Skill, M. S. Managerialist and human capital explanations for key executive pay premiums: a contingency perspective. Academy of Management Journal, 46 (1), (2003): 63-73. Garavan, T. N., Morley, M., Gunnigle, P. Human capital accumulation: the role of human resource development. Journal of European Industrial Training, 25 (2-4), (2001): 48-68. Lepak, D. P. & Snell, S. A. The human resource architecture: toward a theory of human capital allocation and development. Academy of Management Review, 24 (1), (1999): 31-48. Read More