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Manufacturing Industry

Identify and discuss HR planning and recruitment in a particular sector of the labour market.  Select an industry (or specific organisation) as the case study for your report.

Human resource planning is defined as the procedure of identifying existing and future human capital requirements in an organisation or industry in order to achieve its objectives; it serves as a connection between strategic plans and human resource management in a corporation. Effective HRM models assist in improving the productivity of employees which leads to increase the firm’s performance. Modern corporations face various challenges relating to planning and recruitment of human resource; the companies implement strategic HRM policies to address such issues. This report will analyse the key challenges relating to planning and recruiting of workforce in ‘Manufacturing Industry’. The report will take the example of various manufacturing companies, such as IBM, Volkswagen, and Samsung, to understand the key challenges faced by their HR department. Further, the report will provide recommendations that manufacturing companies can implement in their business structure to address various HR challenges

Manufacturing is defined as the process of production or creation of new products or merchandise for sale or use purposes by using machines, labours, chemicals, biological procession, tools or formulation. According to Su, Baird & Blair (2009), in Australia, the manufacturing industry contributes to about 10 percent of the country’s GDP. Various corporations operate in different manufacturing sectors of Australia such as food, textile, wood, printing, chemical, petroleum, and machinery (Feng, Terziovski & Samson, 2007).

Many international organisations operate in manufacturing industry such as IBM, Samsung, Apple, Volkswagen, and Hewlett-Packard. These corporations manufacture or produce different products for their customers or other companies; for example, IBM manufacture and trade in software and hardware for computing devices. Samsung manufacture electronic gadgets for customers such as televisions, smartphones, air conditioners and others. The human resource department of these organisations faces various problems during planning and recruitment of human resource capital (Bondarouk & Ruel, 2009).

HR Strategies

Chen & Huang (2009) provided that the human resource department plays a critical role in the efficiency of manufacturing corporations and it performs a wide variety of roles which influence the success of a company. The HR department focuses on management of compensation, benefits, development, recruitment, retention, training, performance appraisal, and labour relations. The HR department has to assess their organisational environment to implement appropriate HR strategy such as Best Fit, Best practice, General strategy, High commitment HRM, Strategic model or many others (Wright & McMahan, 2011). The companies implement these strategies based on the challenges face by them regarding human resource management. In the manufacturing industry, the HR strategies focus on hiring qualified employees who have appropriate knowledge and experience regarding the field.

Key HR challenges in Manufacturing Corporations

HR Planning

The HR department of a manufacturing industry creates various plans to fulfil the current and future human capital requirements (Chew & Chan, 2008). The HR plans of organisations such as Volkswagen and Samsung focus on hiring talented employees from the sector who work with high efficiency. The HR department also create plans for training and development of workers in order to improve their productivity and performance (Guest, 2011). For example, the compensation structure is based on employees’ skills and labour supply and demand; high demand in the market leads to higher salary packages, therefore, many manufacturing companies, such as Apple, outsource their manufacturing practices to other countries such as China or India. This plan assists in reducing organisational resources and improves the efficiency of manufacturing firms.

Analysis and Design of Work

The HR department of a manufacturing corporation has to evaluate its business operations in order to analyse and design job to hire appropriate candidates (Oldham & Hackman, 2010). For effective selection and recruitment procedure, HR department depends on job analysis; it is a process of recognising and ascertaining details of a particular job to understand its requirements and duties which plays an important role in the selection process (Kilduff and Brass, 2010). In the manufacturing industry, the work divided into various sections and workers perform different jobs in each division. For example, in Volkswagen, manufacturing process of cars is divided into different sectors. Different departments focus on creating internal parts such as engine, interior, safety equipment and others, and other divisions focus on external components such as car’s body, paint, design, and others.

Recruitment and Selection

The key role of HR department in a manufacturing corporation it to select qualified workers who are right for their job and who perform at their highest capacity to achieve organisational objectives. Recruitment is a process of finding and hiring new employees in a corporation; selection is defined as the procedure of selecting the right candidate for the right job (Zhao & Liden, 2011). The HR department decide the place of recruitment for manufacturing companies, and the recruitment place is decided based on corporation’s requirements. For example, firms recruit from universities to hire fresh talent or they use labour unions, online sources, and employment agencies to employ experience workers.


The evaluation or interview process in recruitment allows HR staff to analyse the potential of candidates, and they can also take physical test of workers to ascertain them they can perform manufacturing work. The HR department has to hire candidates for different department and ensure that they receive appropriate training to successfully perform their job (Klotz, Motta Veiga, Buckley & Gavin, 2013). In Australia, there is a shortage of skillful labour which increases the challenges for HR department since there is fierce competition between manufacturing companies to hire and retain talented workers (Department of Employment, 2017).

HR Strategies

Legal, Ethics and Security Issues

The HR department deals with various legislative, ethical and security challenges regarding employees; effective management of these issues assist in creating a positive relationship between corporation and employees (Kehoe & Wright, 2013). The manufacturing companies have to deal with various manufacturing and labour laws established by different countries. In Australia, manufacturing firms deals with various legislations such as Competition and Consumer Act 2010 and Australian Consumer Law (ACL) (Business, 2017). The HR department has to ensure that they provide appropriate and equal remuneration to its workers to avoid legal issues. The HR department of manufacturing firms also deals with labour unions which force them to perform ethically and maintain appropriate security of workers. The HR department finds it difficult to attract and retain talented workers if the company did not maintain adequate safety standards for the labours.

Demographic Issues

The HR department of manufacturing corporations deal with demographic challenges relating to labour; the demographic issues relates to aging, generation, and diversity of the workforce. The worker's population in the manufacturing sector is growing old, and there is lack of entrance of young labours (Schuler, Jackson & Tarique, 2011). Most people did not prefer to work in the manufacturing industry since pay grade is low and work is difficult. The working condition in manufacturing sectors is not appropriate for workers, especially for women. In most countries, there is lack of diversity in the manufacturing industry which creates cultural disputes and generation gap between employees. For example, Daimler is a German automobile manufacturing company which face demographic issues since their is generation gap in workforce. In China, the demographic issues have affected various industries which are detrimental to the country’s growth (Holodny, 2016).

Employer Branding

With the continued growth in the manufacturing industry, the requirement of qualified employees are rising as well; the HR department uses employer branding in order to attack and retain talented workers (Wilden, Gudergan & Lings, 2010). There are several expenses associated with the hiring of employees such as recruitment cost, investment in training, advertisement charges, compensation, and cost of workplace integration; a corporation can reduce these expenses by maintaining a positive brand image which automatically attracts talented workers.

Following are few suggestions that can be implemented by manufacturing firms into their HR strategies in order to address various challenges.

  • The manufacturing companies should embrace a new, older workforce to ensure that they are able to fulfill their labour requirements (Korn, 2010). For example, Daimler AG considers demographic change as an opportunity and uses it to its advantage (Daimler, 2017). Many studies have provided that older workforce is more productive and disciplined than young employees because millennial did not prefer to work for large corporations in a repetitive job.
  • To improve the organisational image, the manufacturing companies should provide new accommodation and incentive package to its employees in order to improve their retention and establish a secure environment to attract women workers in the industry. Women did not work in manufacturing organisations due to lack of security guidelines and weak HR structure; the corporations should address these issues to target diverse workforce. Harley-Davidson is a good example in which 25 percent of the workforce is women, and the company provides them equal growth opportunities (Barrett, 2015).
  • The manufacturing companies should maintain a balance between labour supply and demand; the wages and incentives should be based on the performance and output of workers. The company should establish education and training programs for development of its employees to attract and retain them in the firm; it will also improve their productivity.
  • The manufacturing companies such as IBM, Samsung, and Hewlett-Packard should increase their investment in promotion to develop effective advertising campaigns that attract a large number of potential employees. The corporations should also improve their employees’ engagement program to establish a positive environment (Alges, Shantz, Truss & Soane, 2013).

Conclusion

From the above observations, it can be concluded that the human resource management is one of the key parts of an organisation which affect its success or failure. In the manufacturing industry, the HR department of corporations performs various operations relating to the management of human capital such as planning HR structure, job design, implementing HR policies, recruitment, selection, and retention. There are several issues faced by HR department in manufacturing firms such as labour demand and supply, demographic issue, employer branding, legislative, security and many other problems. The manufacturing corporation can implement various policies to address these challenges such as embracing older workforce, establishing education and development programs, providing better incentive and improving employee engagement. The HR department of manufacturing firms should adequately address its challenges since effective HR model assist in sustaining company’s future growth.

HR Planning

References

Alfes, K., Shantz, A. D., Truss, C., & Soane, E. C. (2013). The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model. The international journal of human resource management, 24(2), 330-351.

Barrett, R. (2015). Harley courts women and young riders. Retrieved from https://archive.jsonline.com/business/harley-courts-women-and-young-riders-b99431331z1-289674181.html/

Bondarouk, T. V., & Ruel, H. J. M. (2009). Electronic Human Resource Management: challenges in the digital era. The International Journal of Human Resource Management, 20(3), 505-514.

Business. (2017). Manufacturing Industry Fact Sheet. Retrieved from https://www.business.gov.au/info/plan-and-start/develop-your-business-plans/industry-research/manufacturing-industry-fact-sheet#employment

Chen, C. J., & Huang, J. W. (2009). Strategic human resource practices and innovation performance—The mediating role of knowledge management capacity. Journal of business research, 62(1), 104-114.

Chew, J., & Chan, C. C. (2008). Human resource practices, organizational commitment and intention to stay. International journal of manpower, 29(6), 503-522.

Daimler. (2017). Demographic change as an opportunity: Mercedes-Benz launches demographics initiative in production. Retrieved from https://media.daimler.com/marsMediaSite/en/instance/ko/Demographic-change-as-an-opportunity-Mercedes-Benz-launches-demographics-initiative-in-production.xhtml?oid=9920495

Department of Employment. (2017). National, state and territory skill shortage information. Retrieved from https://www.employment.gov.au/national-state-and-territory-skill-shortage-information

Feng, M., Terziovski, M., & Samson, D. (2007). Relationship of ISO 9001: 2000 quality system certification with operational and business performance: A survey in Australia and New Zealand-based manufacturing and service companies. Journal of manufacturing technology management, 19(1), 22-37.

Guest, D. E. (2011). Human resource management and performance: still searching for some answers. Human resource management journal, 21(1), 3-13.

Holodny, E. (2016). This is yet another ugly chart for China's demographic future. Retrieved from https://www.businessinsider.in/This-is-yet-another-ugly-chart-for-Chinas-demographic-future/articleshow/52640910.cms

Kehoe, R. R., & Wright, P. M. (2013). The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of management, 39(2), 366-391.

Kilduff, M., & Brass, D. J. (2010). Job design: A social network perspective. Journal of Organizational Behavior, 31(2?3), 309-318.

Klotz, A. C., Motta Veiga, S. P., Buckley, M. R., & Gavin, M. B. (2013). The role of trustworthiness in recruitment and selection: A review and guide for future research. Journal of Organizational Behavior, 34(S1).

Korn, K. J. M. (2010). A second look at generational differences in the workforce: Implications for HR and talent management. People and Strategy, 33(2), 50.

Oldham, G. R., & Hackman, J. R. (2010). Not what it was and not what it will be: The future of job design research. Journal of organizational behavior, 31(2?3), 463-479.

Schuler, R. S., Jackson, S. E., & Tarique, I. (2011). Global talent management and global talent challenges: Strategic opportunities for IHRM. Journal of World Business, 46(4), 506-516.

Su, S., Baird, K., & Blair, B. (2009). Employee organizational commitment: the influence of cultural and organizational factors in the Australian manufacturing industry. The International Journal of Human Resource Management, 20(12), 2494-2516.

Wilden, R., Gudergan, S., & Lings, I. (2010). Employer branding: strategic implications for staff recruitment. Journal of Marketing Management, 26(1-2), 56-73.

Wright, P. M., & McMahan, G. C. (2011). Exploring human capital: putting ‘human’back into strategic human resource management. Human Resource Management Journal, 21(2), 93-104.

Zhao, H., & Liden, R. C. (2011). Internship: a recruitment and selection perspective. Journal of Applied Psychology, 96(1), 221.

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