Strategic human resource management importance for business

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Strategic human resource management seems like policies or practices which use human resources to achieve strategic and operating objectives of the company.

It plays an important role on a business. The reasons are that: firstly, it can get competitive advantage by developing human capital and identifying workers as a key resource. It is well known that if employees cannot perform well in the firm, it may easily give an opportunity to competitors to compete. Thus, in an organization, if the staffs are high qualification, experienced and potential and human resources can be allocated and training well, that can give competitive advantages to the firm. "For instance, as Norman Pickavance, group HR director of Morrisons in Woods (2010) said that Morrisons can get the competitive advantage because staff has got best training, such as how butchers can make meat which can meet the customer's specification".

Secondly, it can help to develop and maintain the competency of employees. It seems that employees committed to driving a successful business. If human resource planning can plan well, they may perform well in the business and try their best to achieve the objectives of the firm. For example, when human resource department do a planning for next year, it may need to contain the following things: whether employees need a training course or not; how they develop their weaknesses and maintain their strengths; how to allocate them so that they can work efficient. If human resource can be developed, they may lead to the success of company.

Thirdly, SHRM is the main contributor for business to make more profit. In the company, the work of HRM is not just recruit new employees and manage them, it also need to know in-depth of the staff and analyze the strengths, weaknesses, opportunities and threats of the company do that it can make a HR practices. "It is found that if a company has a good HR practices, it not only can develop employees, but also it can get higher profit and productivity. "Besides that, it is found that if an organization invests 10% in HR, it may boost gross profits by 1500 pounds each employee annual year" (Peacock , 2008).

Explain the advantages and disadvantages of using an assessment centre to select employees.

Assessment center is a method which used to interview a group of employee by using a set of competencies. The advantages of assessment center are: firstly, it can help employer or assessor to understand in-depth of candidates and make right decisions on selecting them because assessment center is a group selection which use simulation exercises and questionnaires to test candidates' skills such as interpersonal and communication skills and their teamwork. "For instance, Tarmac used assessment centers which contain different types of exercises and tests to select different role of employees" (Tarmac Building Products, 2010).

Secondly, it is obvious that assessment center can help employee to identify the suitability for job because the simulation exercises can offer an opportunity to candidates to know more about themselves. "For instance, When BMW recruited new staff, it will run assessment center, which with the help of dealer staff to verify and discover the best and appropriate candidate to work in the BMW dealer network" (BMW Education Progrmme, 2010).

However, there are some disadvantages of using assessment center to select employee. For one thing, it seems that it is time-consuming to using assessment center because it generally spends much more time than the traditional tests. Besides that, it spends much money organizing and developing it. "For example, it needs numbers of assessors who has trained and are intensive to interview a large number of candidates. A large room and some refreshments need to be prepared so it is costly" (Dayan et al, 2002).

For another, it is unfair to each candidate to test. For instance, some active and outspoken employee may try their best to show out their skills and ability so that they may answer all questions while for the shy candidates, they may feel pressure to answer question so they may be fired eventually. So it is not fair to the shy candidates

Finally, it is not convenient and friend for the disable employee to take the assessment center because with a group exercises, testing teamwork is very important. Thus, most employees don't want to do the exercise with the disable candidate due to their inconvenient, which may influence the performance of their team.

Explore the reasons why recruitment selection and training costs are 'one and a half to three times a person's salary.

Firstly, it seems that the advertising cost is the main cost of recruitment. When a firm decide to recruit employee from external, it must spend money finding agency to design a recruitment advertisement which to attract people. Besides that, it is obvious that time is money. Thus, company should decide how long the advertisement broadcast. If the company cannot find the appropriate employee after few days, it needs to continue to pay the advertising fee until they recruit the suitable employee. "For instance, Tesco advertised its recruitment message on its website, office media, television and radio. Even more it may place advertisement on Google or in magazines such as The Appointment Journal. It is huge cost advertising on the television and magazines" (THE TIMES 100, 2011). Thus, doing recruitment especially outside the company is expensive.

Secondly, selection also is one of approaches which used to recruit new employee. However, it seems that selection costs are very high. For instance, when firms organize an interview, it needs to spend money on booking a room, parking and some refreshments to the candidates who attend to the interview. In addition, when firms use test to interview them, the IT department should send bills which used to prepare the test to HRM. Thus it must cost firm money. Additionally, HRM department need to allocate some workers to receive and look at the application or CV which candidates sent. It may cost them lots of time to look at these documents. What is more, when company does a poor selection, it may cost much more on re-prepare another new. "For instance, when Tesco do the selection, there are many stages need to do during the selection process, such as the first stage, looking at the applicants' CV. This stage is time-consuming but is most important because it can make sure that the people who are qualified to the stage of interview have the best fit with the job requirements" (THE TIMES 100, 2011). So selection cost is much more than a person's salary.

Thirdly, training costs are also costly because it contains different parts of costs. One part is that for some companies, they might need to spend money renting a room or equipments such as projector to do the training course. Furthermore, company should pay money for the person who replaces and does the trainer's works because the trainer spends his working time on training and following the new employees. Even more, sometimes firms should pay extra costs to the trainer because he may spend his extra time doing the training. Besides that, it may need to find professional and experienced trainer who works outside to train the new employees. Thus company should pay the trainer course cost. "For example, Virgin Atlantics (2011) invest much money on the training facilities, such as 52 fully equipped classrooms which with the latest training technology, parking spaces, an experienced and professional training team and so on". So organizing training for new employee is much more than an employee's salary.

Analyze the strategies a business can use to retain its staff.

It seems that retaining talented employees benefit a lot to company. For one thing, it can reduce the cost of staff turnover. It is obvious that recruiting a new employee not only need to pay the advertising cost, but also it need to pay the selection and training costs. So it cost firm hundreds of thousands of money. Thus, majority of firms prefer to retain staff. "For example, Tesco prefer to provide lots of benefits to the key staff such as flexible hours and leave, profit-share and other welfares rather than recruit new employees to replace them" ( 2011).

For another, retaining staff helps to increase customer perception and give more confident to customer. It is easy that high staff turnover lead to customer dissatisfaction. For instance, if a customer just signed a contract to the seller (Kate) and after few days another seller (Jack) replaced the original seller's job. That is easily make customer confused and lose confident because the customer need to re-spend time knowing Jack and established relationships with Jack. Besides that, high employee turnover also has impact on company's reputation and brand image. So retaining staff is very important.

It is obvious that high employee turnover has impact on the company. Firstly, it may lose resource that has been invested in the employees. For example, company spent much money offering training course or technological courses to the employee, but they left company after they learned it. That is costly to company.

Secondly, it will influence the loyalty of the company. It is well known that establish loyalty need to spend a long period of time. So for the new employees, they have lower loyalty so that they do not spend all on working in the company. Thus, it may influence the performance and productivity of company.

There is no doubt that retaining talented staff plays an important role to the company. There are several strategies that business can retain staff, such as offer bonus, pension, holidays or shares to staff. Besides that, company can increase their wages to retain them. "Take OP Oil as an example, in order to attract and retain their skilled and potential employees, OP Oil improved the employee offer, for example, firstly, OP developed their wellbeing offer through offering mental health and relationship seminars, employee can get balance of work and life flexibity. Secondly, it offer reward to employee, such as improving pay parity and conducted a superannuation review that aims to deliver additional benefits. Thirdly, it provides employees learning opportunities and helps to develop their career development. Finally, role and recognition- it will recognize each person's performance contributions" ( 2011).

'Modern Organizations operate in increasingly dynamic and uncertain business environments'. Does this reduce or increase the need for human resource planning? Justify.

In recent years, there is no doubt that organizations are hard to predict and plan in recent years due to the global changes such as the world recession. Some companies operate in a dynamic business environment while some operate in an uncertain environment. It is obvious that lots of unstable and volatile things and countless variables that organizations cannot plan and forecast. Moreover, due to the unpredictable changes in the business environment, it increased the need for human resource planning, which organizations have to planning more so that to keep organization making profit and have competitive advantages.

In this essay, for one thing, it will be described what is dynamic and uncertain business environments and why businesses are dynamic and uncertain. For another, it will be discussed whether human resource planning is beneficial in the dynamic and uncertain environment or not.

It is obvious that dynamic business environment make organizations operate in a good situation. When company operates in the dynamic environment, it has the ability to response to the social and economic trends. "For instance, nowadays, with the fierce competition, IBM Ltd. in order to keep good reputation and get higher level of service satisfaction in the dynamic environment, it provided a top-quality, flexible portfolio of technical training and education services for staff so that they have ability to solve any problems which clients give" ( On the other hand, some businesses are dynamic even though they operate in the uncertain business environment. "Take BMW as an example: during the period of recession, it seems that the demand of people buying cars decreased. Furthermore, at the same time, all car manufacturers were facing the same problem, which the car sales turnover decreased. However, due to the good reputation and the good brand image of BMW, and the good quality of products, there is no big change on the sales turnover" (BMW Education Programme, 2011)

For another thing, uncertain business environment lead companies facing lots of problems and challenges. It leads companies making confuse on forecasting and planning. For instance, firms do not know whether how many employees they need for next year; they also cannot predict accurately whether offer training course or further development for employees or not; what is more, it is difficult to make budget for next year. It seems that there are two main factors may cause companies operate in uncertain environment. Firstly, economic changes play an important role on business operating in uncertain environment. "For instance, in recent years, British Airways are facing challenges. It seems that the world recession and the higher oil prices led to the Revenue of BA decreased by about 1 billion pounds in 2009" ( "For another, cabin crew who work with BA, in order to get cheap-flight perks and restore their travel allowances, they planned to go on strike for 20 days which may damage over two million passengers' travel plan" ( 2010). "Furthermore, due to the recession, BA planed to fire about 3700 employees in 2009, and it also tended to cut 3.5 percent of seats in the summer schedule. At the same time, there is 5 percent capacity reduction in the winter schedule" (Ross, 2009).

Secondly, political issues are another contributor of the uncertain environment.

"For example, in 2007, due to the fact that Chinese-made toys contained paint and magnets, which danger the health of children, U.S. Consumer Product Safety Commission announced that all toys which made from China need to recalled and stopped trading toys with China" ( 2007).

Facing with the uncertain and dynamic business environment, there are lots of things that organizations need to concern. For one thing, it is more difficult for human resource department to develop accurate forecasts during the uncertain times. It is well known that human resource planning plays an important role on deciding whether company can survive or not in the uncertain economic environment. If company cannot forecast well, it may lead company lose profit even more bankrupt. For instance, Tesco will use an early warning system to decide whether it needs to change their plan or not. When Tesco found that it lost money in few months, it may make a change and seek methods to save money, such as whether it needs to reduce the number of employees or not. For another thing, incorrect forecasts may lead organizations lose lots of money which people cannot image. However, in the uncertain and dynamic business environment, even though organizations can predict accurately, it still only can provide limited competitive advantages to firms. "For instance, Tesco implemented performance management software which in order to save money through developing processing performance and improving processing power utilization. Besides that, it invested much money on the IT which to improve the online food sales" (King, 2008). There is no doubt that before Tesco invested money on IT, it must do a plan and predict whether it can improve the online sales or not. If it cannot forecast correct, it may lead Tesco to lose huge money. Therefore, it is obvious that the dynamic and uncertain business environment increase the need for human resource planning.

To sum up, no matter in the dynamic or uncertain economic environment, there are lots of unpredictable things such as competition, economic changes, political problems and social changes. These will influence the organization's operations. However, when organizations do the human resource planning, it should be look and forecast carefully and it also need to take the short-term and long-term profit into account. Even more, the strategic planning also should be flexible, which can make changes and still can make profit when facing big challenges. All in all, human resource planning is very important for company and it also plays an important role of the strategic human resource management, which helps to achieve the objectives and targets of organizations.