Approaches to Staffing (Edexcel A Level Business)

Revision Note

Steve Vorster

Written by: Steve Vorster

Reviewed by: Jenna Quinn

An Introduction to Staffing

  • Effective human resource management (staffing) is important to business as it ensures that the organization has:

    • The right people, in the right roles, with the right support, with opportunities to succeed

  • This will lead to higher productivity, more profits and a positive work environment

  • Human resource management focuses on how employees can be:

    • Effectively recruited

    • Effectively deployed (used)

    • Effectively developed and trained

    • Effectively motivated

    • Effectively managed and led

Staff as an Asset & as a cost

  • Staff represent both an asset and a cost to a business

  • Staff are an asset to a business as they bring knowledge, skills, and expertise to the business

    • Staff can increase productivity, drive innovation and enhance customer service - all of which contribute to the success and profitability of the business

    • Staff can help to build a positive reputation for the business through their interactions with customers, suppliers, and other stakeholders

  • Staff also generate costs to a business - and for many businesses staffing costs are one of the largest costs they have

    • There are costs associated with

      • Hiring and training workers

      • Managing workers as managers have to be hired

      • Paying the salaries of full time workers

      • Paying wages of hourly staff

      • Additional benefits, such as company cars, pensions, healthcare etc

      • Letting workers go (redundancy payments)

The Impact of National Minimum Wages on Staffing Costs

  • If the government introduces (or raises) a national minimum wage it applies to employees who receive a wage rather than a salary

    • Businesses that employ workers on a wage basis will face higher labour costs

    • Businesses that employ workers on a salary basis are less affected by the introduction of a minimum wage

      • They already pay a fixed amount regardless of the number of hours worked

Developing a Flexible Workforce

  • Flexible working is the development of a culture where workers are equipped to do different roles or where they work in a range of employment patterns (full-time, part-time, zero hours contracts, work from home, etc)
     

  • Developing a flexible workforce can bring many benefits to a business

    • Each specific approach should be assessed, as there are potential disadvantages to each

Diagram showing ways to develop a flexible workforce: multi-skilling, flexible hours and home working, outsourcing, part-time and temporary roles.

Allowing workers to work from home is just one of several methods available to businesses to develop a flexible workforce 

 Multi-skilling

  • Multi-skilling is the process of training workers to fulfil multiple job roles within a business

    • E.g. South West Airlines trains staff to handle multiple roles including check-in, baggage handling and customer service

The Advantages and Disadvantages of Multi-skilling

Advantages

Disadvantages

  • Business utilise their workforce more efficiently which reduces labour costs and increase productivity

  • It can help to improve patient outcomes in healthcare industries as workers with a broader range of skills can provide more comprehensive care

  • May require significant investment in training and development

  • May not be appropriate for all job roles, especially those that require a high level of expertise

 

Part-time and temporary working

  • Someone who works part-time may only work two or three days a week

  • Someone who works temporarily shows up for work whenever the business needs them

    • E.g. Amazon employs temporary workers to handle seasonal spikes in demand such as Christmas

The Advantages and Disadvantages of the Business of Part-time & Temporary working

Advantages

Disadvantages

  • Flexible working arrangements can help businesses to attract and retain talent, especially staff who value work-life balance

  • This may improve productivity, as staff can work during their most productive hours and avoid distractions 

  • Flexible working arrangements can create challenges in terms of communication and collaboration (especially if staff are working remotely)

  • Monitoring and managing flexible workers can be more difficult 

Outsourcing

  • Apple outsources much of its manufacturing to Foxconn in China

    • This allows the company to produce products at a lower cost and maintain competitive pricing

The Advantages and Disadvantages of Outsourcing

Advantages

Disadvantages

  • This may allow businesses to access specialised skills that may not be available in-house

  • May reduce labour costs

  • This may lead to a loss of control over quality and delivery, especially if the outsourcing partner is based in another country

  • This may create ethical concerns, especially if the partner is based in a country with lower labour standards or human rights abuses

Flexible hours

  • Flexible hours allow employees to schedule working hours around their individual needs and accommodate their commitments outside of work

  • A flexible hours schedule usually involves working some set hours, with the remainder of hours organised according to the employees' needs

    • E.g. An employee may be expected to be at work between the hours of 10am and 2pm, but can choose when they complete the rest of their working hours

Home working

  • Advances in communication technology have enabled a larger proportion of workers than ever before to work from home

    • Employees use tools such as email, instant messaging, collaborative software, scheduling apps and videoconferencing to carry out work remotely

  • Home working has a range of advantages and disadvantages for both the business and its employees

Advantages

Disadvantages

For the Business

  • Smaller or fewer premises may be required, reducing costs

  • High quality workers may be attracted from a wide geographical area

  • Workers may be more productive if they work in isolation, away from distractions

  • The cost of equipping workers with technology to work remotely may be significant

  • There may be less opportunity for collaboration between workers, reducing innovation

  • Careful monitoring will be required to ensure remote workers remain focused on tasks

For the Employee

  • Commuting costs, such as train fares, are eliminated

  • Stress reduced as a result of not having to travel to work

  • Some flexibility may be possible, allowing workers to manage other commitments

  • Staff may feel isolated from colleagues

  • Household costs such as electricity and heating may increase

  • A healthy division between work and home life may be difficult to manage

The Distinction Between Dismissal & Redundancy

  • Dismissal (firing or sacking) is the termination of employment by an employer against the will of the employee

    • Employees are usually terminated due to their misconduct (e.g. violating company policy) or poor performance

    • The employer may choose to dismiss them immediately (without notice or compensation) or provide a notice period which they can work out

  • Employees are made redundant when the job is no longer available and the business reduces the size of its workforce

    • The termination is not due to any fault of the employee

    • The employer must follow certain legal procedures, including providing notice and paying redundancy compensation

Different Approaches to Employer/Employee Relationships

  • The nature of the employer/employee relationship is influenced by whether there is an individual approach or a collective agreement

Individual and Collective Bargaining Approaches Explained

Individual Approach

Collective Bargaining

  • Focuses on the relationship between an employee and their employer

  • Assumes that each employee is unique and has their own goals, motivations, and interests

  • It emphasises the need for tailored compensation packages that cater to each employee's unique skills and needs

  • The employment relationship is a voluntary agreement between two parties in which both negotiate their respective roles, responsibilities and benefits

  • The employer has the power to hire, fire, and set the terms and conditions of employment

  • A process whereby a group of employees (represented by a trade union) negotiate with their employer for better wages, working conditions and benefits

  • Employees have more bargaining power when they negotiate collectively rather than as individuals

  • The employment relationship is seen as a power struggle between two parties with conflicting interests

    • The employer wants to maximise profits by keeping labour costs low

    • The employees want to maximise their wages and benefits

    • The union acts as the collective voice of the employees and bargains with the employer on behalf of all workers

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Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.

Jenna Quinn

Author: Jenna Quinn

Expertise: Head of New Subjects

Jenna studied at Cardiff University before training to become a science teacher at the University of Bath specialising in Biology (although she loves teaching all three sciences at GCSE level!). Teaching is her passion, and with 10 years experience teaching across a wide range of specifications – from GCSE and A Level Biology in the UK to IGCSE and IB Biology internationally – she knows what is required to pass those Biology exams.