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International HRM: 2015 Block 2: Human Resource Planning: Macro Level - Labour market trends International HRM: 2015 Block 2: Human Resource Planning: Macro Level - Labour market trends - Labour markets & HR strategy - Flexibilisation of employment - Externalisation 1

Also known as Workforce Intelligence Planning 2 Also known as Workforce Intelligence Planning 2

Economic and competitive context of HRP • 2010 s – markets for products and Economic and competitive context of HRP • 2010 s – markets for products and services: • • globalised sharp and frequent variations intensely competitive shorter product life-cycles • 2010 s – public sector services • 30% funding cuts: Doing more & better with less: “ 3 Es” • Implications for firms / public sector organisations: Flexible response to changes in demand • Implications for firms’ / organisations’ staffing • decreasing the size of their internal labour markets • increasing their use of external labour markets • To: • Reduce costs • Increase responsiveness 3

Sources of labour and HRM approaches § Organisations: § Cultivate their internal labour markets Sources of labour and HRM approaches § Organisations: § Cultivate their internal labour markets § or § Draw upon external labour markets … Depending on: 1) The uniqueness of the labour required 2) The strategic value of the labour to the organisation’s core competence 4

Modelling Workforce sources and HRM approaches 5 Modelling Workforce sources and HRM approaches 5

Labour markets & HR approaches The best-fit / alignment approach to Strategic HRM, suggests Labour markets & HR approaches The best-fit / alignment approach to Strategic HRM, suggests that the four contrasting types of workforce require contrasting approaches to HRM: 1. The management of those groups who are unique but of low strategic value will be: § Relational – collaborative 2. The management of those groups who are both unique and of high strategic value will be: § Relational – commitment based 3. The management of those groups who are of high strategic value but not particularly unique will be: § Transactional – productivity based 4. The management of those groups who are both of low uniqueness and of low strategic value will be: § Transactional – compliance based 6

Labour markets and knowledge flows § § The contemporary organisation relies for sustained competitive Labour markets and knowledge flows § § The contemporary organisation relies for sustained competitive advantage or best value public service delivery through building human capital, that is through managing knowledge flows: § Within the organisation § Into the organisation from the external, idiosyncratic, labour market Thus, the organisation needs: § to nurture its relationship with “Alliance partners” to draw their idiosyncratic knowledge into the organisation § to ensure high retention of “Knowledge employees” to ensure that human capital is built and maintained and not lost, through employee-turnover, from the business 7

Types of workforce § In the case of a car manufacturer such as : Types of workforce § In the case of a car manufacturer such as : 1) Knowledge employees § Examples? 2) Alliance partners § Examples? 3) Job based employees § Examples? 4) Contract workers § Examples? 5) Identify 3 advantages and 3 disadvantages of BMW directly employing staff? 8

Employee-less “organisation” • Virtual or Network “organisations” • the “Beneton model” • Such organisations Employee-less “organisation” • Virtual or Network “organisations” • the “Beneton model” • Such organisations – • have almost no direct employees • based on networks bringing individuals and groups together for specific projects • Commercial contracts replace employment contracts ① Identify the advantages and disadvantages of this organisational form ② Overall what factors influence an organisation’s / unit’s mix of core and peripheral employees and peripheral workers? 9

Labour market trend: externalisation • Firms no longer employ their own staff to perform Labour market trend: externalisation • Firms no longer employ their own staff to perform jobs that are not “core” functions for the business. . • For example cleaning, catering, routine administration • These services are bought in from external, specialist companies • Manufacturing firms off-shore work or outsource work • design work in home country • production / service delivery work in developing country with own staff (off-shoring) production / service delivery work in developing country with 3 rd party staff (outsourcing) • Chinese manufacturers are themselves outsourcing to firms in lower wage economies such as Vietnam: • http: //video. ft. com/v/1496733752001/Vietnamese-manufacturing 10

Labour market trend: externalisation • The “dark-side” of outsourced production are becoming clear &here’s Labour market trend: externalisation • The “dark-side” of outsourced production are becoming clear &here’s the case of Apple’s supplier, Foxconn: http: //www. nytimes. com/2012/01/26/business/ieconomy-apples-ipad-and-the-humancosts-for-workers-in-china. html? _r=1&pagewanted=all 1. 2. 3. 4. What are the advantages of global supply-chains for consumers and for workers in economically-developing countries? What are the business problems and the HRM problems with globalsupply chains? What role should International HRM departments have in ameliorating the risks and problems in global supply-chains? Specifically, list 7 -8 metrics which International HRM departments should use in auditing global suppliers? Explain why these metrics are important for workers in economically-developing countries, for consumers and for shareholders. 11

Labour market trend: externalisation • Service sector firms off-shore activities • Offshoring is no Labour market trend: externalisation • Service sector firms off-shore activities • Offshoring is no longer just about minimising rent and labour costs: http: //video. ft. com/v/1467137390001/Rich-pickings-for-outsourcers • What are the advantages / disadvantages of off-shoring? 12

Workforce agility • Core employees working standard working weeks and years. . . • Workforce agility • Core employees working standard working weeks and years. . . • now account for less than 50% of all employees in EU • These core employees in the internal labour market are now expected to be: • Functionally and Temporarily flexible • Core employees: • • • Well trained in firm specific skills. . . flexible, “can-do” Highly productive Key behaviours: problem solvers, creatively developing the business Career prospects Relatively well paid – pay dependent on performance Availability – annualised hours assumptions 13

Drivers for agility • Flexible working arrangements were introduced primarily as productivity or efficiency Drivers for agility • Flexible working arrangements were introduced primarily as productivity or efficiency measures, although it is increasingly recognised that these strategies have implications for Work-Life Balance … family friendly policies • Of particular relevance to WLB are practices such as: • Flexi-time (40% of UK organisations … low compared to EU average) • Home working (30% of UK organisations for selected jobs) • However, “flexible working arrangement without cultural change have limited impact” … are flexible workers really valued in cultures of “presenteeism” • There is considerable debate regarding the extent to which work and life should be regarded as separate spheres: what do you think? 14

Work-life balance responses It is argued that “Generation Y” (1990 s born) desire a Work-life balance responses It is argued that “Generation Y” (1990 s born) desire a better WLB than their predecessors. What are your own preferences? 15