Human Resources - business

The Strategic Role of Human Resources

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Human Resource Management (HRM):

refers to management of the total relationship between an employer and employee in order to achieve the strategic goals of the business. It may also be referred to as employment relations, industrial relations or workplace relations.

Businesses need to continually examine ways to improve competitiveness and profitability. Consequently, an increasing number of businesses take a strategic (or big picture) approach to managing employees by:

• seeing an effective workforce as an asset and a way of adding value (eg. superior customer service, greater efficiency) to their business performance;

• using human resource management strategies to retain, reward and motivate effective and skilled employees to achieve the business's objectives.

Interdependence with other Key Business Functions

1.Human resources and marketing

2.Human resources and operations

3.Finance relies on human resources

1.Human resources and marketing

• Marketing needs HR to hire staff for research, product development, sales, and customer relationship building, which helps increase customer loyalty and competitiveness.

• Human resources depend on marketing to boost product sales and business growth, which in turn increases the need to hire more employees.

2.Human resources and operations

• Operations depends on HR to hire staff, manage supply chains and quality, and ensure compliance with WHS and anti-discrimination laws. Strong employee relations can lead to higher productivity.

• Human resources relies on Operations to produce quality goods that support business growth, allowing for more hiring and training. HR also counts on Operations to follow workplace regulations like the WHS Act 2011.

3.Finance relies on human resources

• Human resources recruits finance staff who manage cash flow, allocate funds to departments, and ensure financial control. Effective HR policies can lead to higher profits, rising share prices, and long-term business growth.

• HR relies on finance to fund recruitment, training, motivation (e.g. bonuses), and separation processes like redundancy. Efficient employees across departments can give the business a competitive edge.

Outsourcing human resource functions

• Benefits: Focus on core business, cost savings, access to global talent, and improved service quality.

• Risks: Higher costs, reduced quality, coordination challenges, limited oversight, and delayed issue detection.

• Outsourcing may also reduce a business’s competitive advantage if not managed carefully.

Using contractors - domestic, global

A contractor is an external provider hired for specific tasks.

• Benefits: Offers flexibility, no long-term commitment, suitable for both process (e.g. food prep, recruitment) and project outsourcing (e.g. HR, marketing, IT).

• Risks: Can be reduced through clear contracts covering responsibilities like superannuation and insurance.

Domestic subcontracting

• Advantages:

  • Cost-effective due to flexibility and no long-term employment obligations.

  • Useful during economic downturns (e.g. 2020 recession) when businesses can cut costs easily.

  • Fixed pricing offers budget certainty.

  • Avoids overhead costs of hiring in-house staff.

  • Brings in fresh ideas and improves productivity and quality.

Global subcontracting

• Advantages:

  • Lower labour costs due to wage differences.

  • Larger talent pool and legal flexibility in different countries.

  • Helps firms understand global markets before expanding.

  • Example: Apple uses global contractors to reduce production costs.

• Risks:

  • Hard to control quality and reliability.

  • Cultural/language barriers may affect service.

  • Security risks (e.g. data leaks, client poaching).

  • Legal issues due to foreign laws.

  • High staff turnover and possible decline in service quality.

Stakeholders

any person or group that has an interest in the business or who effected by the business's activities.

Employers

• Responsibilities: Pay workers, ensure safe working conditions, follow WHS laws, provide workers' compensation.

• Goals: Maintain a good relationship with employees to boost productivity, flexibility, and profit.

Employees

• Needs: Fair wages, job security, workplace safety, input in decisions, training, and career growth.

• Concern: Without these, businesses risk losing skilled and motivated staff.

Employer Associations

• Role: Represent employers (e.g. Business Council of Australia).

• Services: Provide support with contracts, legal changes, negotiations, and discrimination cases.

• Goal: Improve workplace productivity and efficiency to lower costs and maximise profit.

Unions/Employee Association

• Role: Represent workers (e.g. Independent Education Union).

• Goals: Advocate for fair pay, safe working conditions, no discrimination, and job security for members.

Government organisations

• Roles:

  • Fair Work Commission (FWC) sets minimum wages, working conditions, and resolves disputes.

  • Safe Work Australia / SafeWork NSW ensures workplace safety.

  • Australian Human Rights Commission addresses discrimination.

• Goal: Prevent major human resource (HR) problems in workplaces through laws and oversight.

Society

• Expectations:

  • Safe and healthy working environments.

  • Less offshoring of jobs (to reduce unemployment locally).

  • Fair treatment of women, Indigenous Australians, and people with disabilities in the workplace.

Legal Influences

There are a number of laws and regulations (legislation) which affect HR.

The employment contract creates obligations for both employer and employee

Laws and regulations

• Employment contracts create legal obligations between employers and employees, governed by both common law (judicial decisions) and statute law eg- FAIR WORK

• HR is regulated by laws covering:

  • Workplace conditions (Fair Work Act 2009)

  • Workplace health and safety (WHS laws)

  • Anti-discrimination and equal employment opportunity (EEO) laws

• The Fair Work Act 2009, introduced by the Rudd government, modernised industrial relations by shifting toward:

• There has been a shift from a centralised system (wages set by tribunals/government) to a decentralised system, where wages and conditions are often determined by enterprise-level bargaining (negotiated in individual workplaces).

The Current Legal Framework

1. Employment contract

2. Minimum employment standards

3. Awards/modern awards

4. minimum wage rates

5. enterprise agreements

6. Individual common law employment contracts

1. Employment contract

A legal agreement between an employer and an employee that outlines the terms and conditions of employment, such as pay, hours, duties, superannuation, bonuses and benefits, and rights.

Obligations (responsibilities) of Employers

• Duty of Care - to take reasonable

• Duty to pay agreed wage

• Duty to provide work

• Right to dismiss - for misconduct,

Obligations (responsibilities) of Employees

• duty to obey unlawful commands

• duty to work with skill

• duty to disclose relevant information

• duty to act in good faith

2. Minimum Employment Standards:

Under the Fair Work Act 2009, all Australian workers are entitled to 13 National Employment Standards (NES), which include conditions like maximum weekly hours, different types of leave, flexible work requests, and notice of termination. These standards act as a basic safety net, mainly to protect low-paid employees.

3. Awards/modern awards

Modern Awards are official documents that set minimum work conditions for specific industries or jobs. They cover the National Employment Standards (NES) and are adjusted regularly by the Fair Work Commission and the National Minimum Wage Panel. They serve as a foundation for negotiating workplace agreements and simplify previous complex awards by reducing unnecessary rules. Employees can report any violations of awards to the Fair Work Commission.

4. minimum wage rates

There is a legally set minimum wage for employees not covered by awards or enterprise agreements. The Fair Work Commission reviews and updates the minimum wage annually, effective from July 1 each year. Employers must not pay less than this minimum wage.

5. enterprise agreements

Enterprise Agreements (EAs) are agreements made between an employer and a group of employees about pay and work conditions. These usually offer better benefits than the basic rules and last up to 4 years. A union often helps employees negotiate these agreements.

Individual Common Law Contracts are agreements between an employer and a single employee about their salary and work terms. They are personal contracts usually used for professional or managerial jobs.

**Individual Flexibility Arrangements (IFA):

allow an employer and employee to come to an arrangement that varies the Modern Award or Enterprise Agreement in order to address individual circumstances.

There are 3 main EAs under the Fair Work Act (2009):

1. Single Enterprise Agreements - are between one employer and a group of employees.

2. Multi Enterprise Agreements - are between 2 or more employers and a group of employees (eg. franchise chain).

3. Greenfields Agreements - are for new business enterprises which have not yet employed workers for normal operations. he agreement may be single or multi enterprise and may involve one or more trade unions.

6. Individual common law employment contracts

These are private contracts for high-earning professionals and managers, detailing pay and benefits. They must follow basic legal workplace rules but can be different from standard industry awards.

Comparing the process of negotiating enterprise/collective agreements with the negotiation of individual contracts

An enterprise agreement is a deal made between a company and its workers (or their representatives) about pay and work conditions. This deal is usually made together by both sides and lasts up to 4 years. It includes rules about how everyone should behave, how to solve problems, and what happens if big changes come. It makes sure workers have fair conditions that are better than or equal to the basic legal standards.

VS

In contrast, every employee also has an individual contract with their employer, which must meet legal minimum standards like the National Employment Standards and minimum wage. This contract sets the specific rights and duties for each employee.

The process of making an enterprise agreement

Other types of Employment Contracts

1. Independent contractors

2. Permanent

3. Part time (work < 38 hours per week)

4. Casual

1. Independent contractors

They work on specific jobs for a set time (like 3 months). They aren’t employees and handle their own taxes, superannuation, insurance, and leave. Employers like them because the contractor takes the risk, like if they get sick.

2. Permanent

They work full-time with regular hours and ongoing employment.

3. Part time (work < 38 hours per week)

They work less than full-time hours but regularly, and get leave and benefits based on how much they work compared to full-time.

4. Casual

They work short-term or seasonal jobs, paid hourly with a higher rate to make up for no leave or job security. Many casuals are students or young workers. Employers like casuals because they cost less overall. If casuals work regularly for a long time, they may get some benefits like superannuation or parental leave.

WHS laws and regulations

refer to promotion of a safe and healthy workplace for all employees.

• Employers must:

  • Provide a safe work environment and system.

  • Take out workers compensation insurance.

  • Ensure visitors and non-employees are not at risk.

  • Create a health and safety committee if there are 20+ employees and it’s requested or ordered.

  • Report serious injuries or deaths to SafeWork NSW.

• Employees must:

  • Take reasonable care for their own and others' safety.

  • Follow safety rules and cooperate with WHS procedures.

• SafeWork NSW:

  • Can inspect workplaces and stop work if needed.

• Penalties:

  • Up to $3.5 million fine for companies.

  • Up to $50,000 fine and/or jail for individuals.

Workers' compensation

refers to the money a worker receives for injury or illness that follows a work accident. It is also provided to families of injured employees when the injury/disease was caused by, or related to their work.

Anti-Discrimination:

• Discrimination is treating someone unfairly because of things like:

  • Race

  • Gender (sex)

  • Disability (physical or mental)

  • Age

  • Marital status

  • Sexual orientation

• It is illegal to discriminate for any of these reasons.

• Key laws that prevent discrimination include:

  • Racial Discrimination Act 1975

  • Sex Discrimination Act 1984

  • Disability Discrimination Act 1992

  • Age Discrimination Act 2004

  • Workplace Gender Equality Act 2012

• Australian Human Rights Commission (AHRC) helps enforce these laws.

Equal employment opportunity

• EEO means everyone should be treated fairly in hiring, training, promotions, and pay.

• The Workplace Gender Equality Act 2012 promotes equal outcomes for men and women at work.

• Affirmative action refers to steps businesses take to:

  • Remove discrimination

  • Improve opportunities for disadvantaged groups (e.g. women)

Legislation/law affecting employment

Economic Influences

During a Boom (Strong Economy):

• More jobs available due to high production and sales.

• Job security increases.

• Employees have stronger bargaining power – can ask for higher wages and benefits.

• Employers offer rewards to motivate staff → boosts productivity.

• More money available for training and career development.

• Businesses may invest in technology, replacing workers (with redundancy payouts if needed).

During a Recession (Weak Economy):

• Businesses may cut staff (downsizing/redundancies) to reduce costs.

• Stricter control over wages and benefits.

• Less job security and limited opportunities for wage increases or promotions.

Structural change

Structural change occurring in the economy has led to a rapid employment growth in the services sector (including property, business, retailing, trades, tourism, educational services, hospitality, and community and personal services) which accounts for 86% of total employment.

In manufacturing, removal of protective tariffs (taxes on imported goods to Australia) has Ted business exposure to international competition, causing a fall in employment due to rapid technological change (separation).

Globalisation

• Increased global competition has led businesses to:

  • Restructure operations.

  • Outsource or subcontract non-core tasks.

  • Relocate production overseas to reduce labour and compliance costs (separation strategy).

• To stay competitive, businesses must:

  • Attract and retain skilled staff.

  • Improve productivity, training, and customer service.

  • Support multicultural workforces.

  • Focus on innovation and quality (acquisition, development, and maintenance strategies).

Technological influences

• Changes in products and production methods have:

  • Created new jobs and made others redundant (→ separation).

• Remote work has increased with better tech access:

  • Allows work anytime, anywhere, but may affect work-life balance (→ maintenance).

• Employees need retraining to use new technology:

  • Training can be costly and resisted, but improves productivity and profits (→ development).

Social (changes in society) Influences

1. Social influences come from attitudes, values and beliefs in communities/societies.

   1. Changing work patterns

   2. Living standards

1. Changing work patterns

• Rise in casual, contract, and part-time work reduces costs.

• Flexible hours and more women in the workforce require supportive, discrimination-free workplaces.

• Growth in service industries, decline in unskilled jobs → need for retraining.

• Greater job mobility, career flexibility, and multiculturalism → need for inclusive HR policies.

• Deskilling/multiskilling → workforce downsizing.

• Early retirement and ageing workforce → need for flexibility, training, and anti-discrimination.

2. Living standards

Australians expect jobs that:

• Are safe and secure (→ WHS).

• Offer regular wages for a good standard of living.

• Include leave entitlements and superannuation for retirement.

• Support a good work-life balance.

Ethics and Corporate Social Responsibility

refers to the responsibility of businesses to act in a morally right and socially responsible way.

An ethical employer will:

• Provide a safe, positive work environment to motivate and retain staff.

• Offer job security and fair rewards to boost performance.

• Promote teamwork and good relationships.

• Create a Code of Conduct to support ethical behaviour.

• Support the community, building trust with both employees and customers.

Some ethical and legal issues arising in the workplace and the benefits of dealing with them successfully