Business S2

Outsourcing

The use of third party subcontractors for carrying out non-core activities

Advantages of outsourcing

• Allows the business to focus on its core activities

• Reduces labour costs

Disadvantages of outsourcing

• Quality control can be difficult

• Associated with unethical practices

Offshoring

Relocating part of an organization’s functions or processes overseas

Advantages of offshoring

• Job creation

• Wages may be lower in other countries

Disadvantages of offshoring

• Associated with unethical practices

• Potential language barriers

Insourcing

The use of an organization’s own resources to carry out a specific job

Advantages of insourcing

• Allows for full control of its operations

• Job creation in domestic economy

Disadvantages of insourcing

• Can be expensive

• Employees may lack necessary skills

Reshoring

Bringing back business functions to the domestic country from overseas

Advantages of reshoring

• Reduced risks

• Job creation in domestic country

Disadvantages of reshoring

• Can be expensive

• Employees may lack necessary skills

Decision tree

A quantitative and methodical organizational planning tool based on probability trees

Advantages of decision trees

• Allows managers to present problems visually

• Enable more mathematically calculated decisions

• Able to consider risks in decision making

Disadvantages of decision trees

• Bases on quantitative factors only

• The probabilities may be wrong

• Doesn’t reduce risks

Define human resource management (HRM)

The function of deploying and developing people within an organization to meet its business activities

State the functions of HRM

• recruitment and hiring

• Training

• Reviewing pay

• Disciplinary procedures

• Looking after welfare of employees

Human resource planning/ workforce planning

Anticipating and meeting an organization’s current and future staffing needs

Internal factors that influence human resource planning

Factors within the control of the organization

External factors that influence human resource planning

Factors beyond the control of the organization

Three internal factors that might affect HR planning

• Size of organization

• Organizational structure

• Motivation in the workforce

Three external factors that might affect HR planning

• Demographic change

• Change in labour mobility

• Immigration

How do demographic changes influence HR planning?

• An ageing population

• Better employment opportunities for women

How do changes in labour mobility influence HR planning?

• Efficiency of resource allocation

• Overcoming immobility obstacles

• International recruitment costs

How does flextime influence HR planning?

• Staffing flexibility

• Improved attendance

• Management difficulties

How does immigration influence HR planning?

• Brings new skills and perspectives

• Eases skill shortage

• Enables flexible work structures

Gig economy

A labour market characterized by short-term contracts

How does the gig economy influence HR planning?

• Reduces production and benefit costs

• Increased reliance of remote and portfolio workers