1.4.1 Staffing approaches

• Staff as a cost:

  Treat 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
• Staff as an asset:

  Treat 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
• Staff as a cost: summary

   

  Focus: identify workforce needs of the business and recruit & manage accordingly (hiring, moving and firing)

  Key features

  Short-term changes in employee numbers (recruitment, redundancy)

  Minimal communication, from the top down

  Pay – enough to recruit and retain enough staff (e.g. minimum wage)

  Little empowerment or delegation

  Appraisal systems focused on making judgements (good and bad) about staff

  Taller organisational structures

  Suits autocratic leadership style
• Staff as an asset: summary

   

  Focus: concentrate on the needs of employees – their roles, rewards, motivation etc

  Key features

  Strategic focus on longer-term planning of workforce needs

  Strong and regular two-way communication with staff

  Competitive pay structure, with suitable performance-related rewards (e.g. profit share, share options)

  Employees are empowered and encouraged to seek delegation and take responsibility

  Appraisal systems focused on identifying and addressing  training and other employee development needs

  Flatter organisational structures

  Suits democratic leadership style
• Is cost better than asset?

  Might result in a more cost-effective workforce where decision-making is quicker and focused on senior managers. But a genuinely “cost-based” approach might expect to suffer from higher absenteeism and staff turnover and less successful recruitment.
• Is asset better than cost?


  Seen as an approach which rewards employee performance and motivates staff more effectively. However, being too “soft” when all the employee benefits are added up, the cost of the workforce may leave a business at a competitive disadvantage.
• Different types of flexible working?

   

  Part-time working

  Term-time working

  Working from home

  Flexitime

  Career breaks

  Job sharing

  Annual hours contracts

  Mobile working

  Shift swapping
• What is one benefit of a flexible workforce related to costs?

  Businesses can save on overheads by reducing office accommodation needs.
• How does flexible working impact recruitment and staff retention?

  It leads to better job satisfaction and higher staff morale.
• What demographic changes in the UK workforce are reflected by flexible working?

  There are more women in the labor market and an aging population.
• What technological developments have facilitated flexible working?

  Employees can now access their employers online and communicate digitally.
• Why is there an increasing need for businesses to offer flexible working hours?

  To deliver services to customers on a 24/7 basis.
• What does employment legislation allow certain groups of employees regarding flexible working?

  It gives them the legal right to request flexible working.
• Drawbacks of flexible working:

  • Additional administrative work and “red-tape” involved in setting up and running 
  • Potential loss of customers if key employees reduce their working hours
  • Lower employee productivity (potentially)
  • Inability to substitute for certain skills if certain employees are absent (a common concern of smaller businesses)
  • Managers finding it difficult to manage or administer the flexibility
• What is multi-skilling?

  • Where staff are allowed to carry out a variety of tasks rather than specialise
  • Enables greater use of job rotation (with subsequent benefits for motivation)
  • Common in service industries – e.g. retail, hotels
  • Puts a greater requirement on training
• What is outsourcing?

  Delegating one or more business processes to an external provider, who then owns, manages and administers the selected processes to an agreed standard
• What is offsourcing?

  The work is done overseas
• Business objectives in house

   

  Quality

  Easier to ensure quality and trace problems if done in-house

  Cost

  In-house departments don’t have to make a profit – so might be cheaper

  Maybe too small to obtain economies of scale

  Easier communication

  Speed

  Easier to schedule work or production to fit in with business needs

  Flexibility

  Closest to the real needs of the business

  Ability to respond may be limited by capacity
• Business objectives for outsourcing

   

   

  Supplier may be a specialist, with greater experience and better equipment

  The main reason to outsource.  Supplier likely to achieve economies of scale

  Motivated to keep costs low in order to make a profit

  Extra costs of communication

  Speed of response can be set as a requirement of the outsourcing contract

  Commercial pressure should encourage good performance

  Suppliers likely to have greater capacity and flexibility than in-house

  May have to balance conflicting demands from other customers
• What is a dismissal?

  • Employee dismissed because of break of contract or other unacceptable behaviour or performance
  • May be considered “unfair” and subject to legal claim by employee
• What is a redundancy?

  • Employee loses job because job is no longer required by the business
  • Requires consultation and redundancy payments payable
• What is employee representation?


  Arises when employees are part of a formal structure for involving them in the decision-making process of a business
• It is a legal requirement to consult with employees:

  • Proposed redundancy programmes
  • When employees are transferred from one employer to another (e.g. the sale of the business) 
  • On changes to pension arrangements
  • Proposed changes to working time arrangements
• What are the main roles of trade unions?

  • Protect and improve the real incomes of their members
  • Provide or improve job security
  • Protect workers against unfair dismissal and other employment legislation issues
  • Lobby for better working conditions
  • Offer a range of other work-related services i.e. support for people claiming compensation for injuries at work
• Advantages for an Employer of a Good Relationship with Trade Union

  • Negotiating with trade unions saves time and cost rather than dealing with all employees individually
  • Unions are part of the communication process between the business and employees
  • Employee morale and motivation may be improved if they know that their interests are being protected by a union
  • The trade union can be a supportive partner in helping a business undergo significant change
• Reasons for Declining Union Membership

  • Decline in employment in manufacturing (traditionally high membership)
  • Increased employment in the service sector - unions are less well established
  • Growth in the number of small firms - unions unrecognised (or not needed)
  • Significant growth in flexible working – employees see less need for union protection
  • Improved employee involvement in the workplace – so less perceived need for collective bargaining
• Industrial action - damage for business

   

  Lost sales and profits from the lost output

  Damage to customer satisfaction

  An internal distraction for management and the business (worse if competitors are not affected)

  Damaged relationship with staff may adversely affect motivation, productivity etc
• Industrial action - Damage for the employee

   

  Lost pay

  Potential loss of jobs if the action results in action to cut costs

  Possible loss of customer and public support (depending on the reasons for the action)

  Risk that illegal action will result in legal proceedings
• What is the method of industrial action where employees follow the strict conditions of their employment contract?

  Work-to-rule
• What do employees do during a work-to-rule action?

  They follow strict conditions of their employment contract without voluntary overtime.
• What is the impact of a work-to-rule action on employee pay?

  Employees still receive their basic pay.
• What is the method of industrial action where employees refuse to work overtime?

  Overtime ban
• How does an overtime ban affect production capacity during peak demand?

  It can have a significant effect on production capacity.
• Why might an overtime ban be ineffective as a bargaining tool during quieter periods?

  Because there is less demand for overtime work.
• What is the method of industrial action where employees work at the slowest allowable pace?

  Go-slow
• What is the primary characteristic of a go-slow action?

  Employees work at the slowest or least-productive pace allowed under their contracts.
• What is considered the action of last resort in industrial action?

  Strike
• Avoiding industrial disputes:

  • Regular consultations with a trade union - pick up problems before they escalate 
  • A staff forum or joint working group to pass on information and collect ideas from workers and consult with workers 
  • An employee consultative body to discuss major issues as they arise 
  • Team and group meetings and feedback sessions 
• What are the risks associated with a strike for both employers and employees?

  It is fraught with danger and strictly policed by legislation.
• How is a strike regulated in terms of industrial action?

  It is strictly policed by legislation on industrial action.