1.4.1 Approaches to staffing

• what happens when business treat staff as an asset vs a cost?

  asset: employees are valued for their skills, creativity and long term contribution

  cost: employees are viewed as expenses, and businesses may focus on minimising costs

  • lower costs
  • poorly skilled employees -> easy to replace
  • higher skilled workers are harder to replace
• what is the difference between salary and wage?

  salary: fixed cost, yearly

  wage: variable cost, monthly
• what are other staff costs?

  • cost of sickness
  • cost of staff welfare
  • cost of staff redundancy
  • cost of staff facilities
  • cost of uniform
• what happens when staff are seen as a cost?

  • may outsource jobs to other companies
  • may move jobs overseas where it is cheaper
  • other temporary / zero hour contract
  • workers may join a union
• what happens when staff are treated as an asset?

  • more productivity
  • staff have more autonomy (freedom)
  • motivation increases
  • higher costs
  • better products
• what happens when staff are treated like a cost?

  • lower motivation
  • low productivity
  • lower costs
  • workers may join a union
  • poorly skilled workers are easier to replace