Unit 6 C1 - Human resources

Human resources

The people who work for an organisation and use their skills, knowledge and experience to help produce goods/services and achieve business objectives

The people/workers in a business

Four factors of production

Land- natural resources

Labour- human effort/work

Capital- equipment, machinery and buildings

Enterprise- taking risks and organising materials

Remember: L-L-C-E

Importance of Labour

Employees use their skills, knowledge and effort to produce goods/services and help the business achieve its objectives

Example: skilled employees can provided better customer service potentially increasing customer satisfaction

Labour market

Where employers look for workers and people look for jobs

Businesses= demand for workers

Workers= supply of labour

Labour market analysis

Collecting and examining information about the availability, skills, costs and characteristics of workers in a particular market

Finding out what workers are available and what they cost

Information a business analyse about the labour market

Number of available worker

Skills and qualifications

Wage levels

Unemployment levels

Location of workers

Demand for particular skills

Competitors’ wage

Why is labour market analysis important

It helps a business make better decisions about:

Recruitment

Pay

Training

Where to locate employees

How man employees it needs

Busibess impact: Better HR planning can ensure the business has the right people with the right skills at the right cost

Forecasting Labour Demand

Predicting how many employees and what types of skills a business will need in the future

Why might a business need to forecast labour demand

To prepare for changes such as:

Business expansion

Increased sales

New technology

New products

Employees leaving

Seasonal demand

What could happen if a business underestimates its labour demand

Not enough employees> Increased workload> Employees may become stressed> Productivity/Customer service may fall> Business performance could suffer

What could happen if a business overestimates its labour demand?

Too many employees> Unnecessary wage cost> Lower profit> resources may be wasted

What sources can businesses use to analyse the labour market

Governement statistics

Job websites

Recruitment agencies

Competitor information

Trade/Professional organisations

Surveys

Internal business data

Why might a business use government labor market statistics

They can provide info about:

Employment

Unemployment

Wages

Skills

Regional labour markets

This can help the business make informed HR decisions

Why might a business analyse competitors’ recruitment information?

It can help the business understand:

What skills competitors are looking for

How much competitors are paying

How much difficult it may be to attract suitable employees

What is the link between business planning human resources

Business plan sets out what the business wants to achieve while HR planning makes sure it has the right number of employees with the right skills to achieve those objectives