Fletcher's HR strategy: PESTLE & SWOT essay.

To complete the group assignment successfully students must include the following information:

1. Conduct an External Environment Analysis to critically evaluate the environmental factors by using the PESTLE framework that may influence the firm’s business strategy.

2. Conduct a SWOT analysis on the assigned company

3. Based on the analysis, evaluate the strategic HR related issues facing by the assigned company

4. Identify and critically evaluate the strategic Priorities/Objectives of the chosen firm along with justifications.

5. Formulate Human Resource Strategy/practices/policies for your assigned company along with analysis and justification (see, for instance, the list of three generic strategies presented by Armstrong and Baron (2002) for some ideas)

6. Discuss how the new strategy will address the strategic objectives and possible outcomes

PESTLE Analysis

The report investigates and explains the factors that have significant impacts on the firm’s (Fletcher construction) HR strategies. For determining the suitable HR strategies that the firm could implement for better functioning, the report conducts a PESTLE and SWOT analysis (Ho, 2014). The following section of the report identifies and analyses the strategic issues related to HR in the assigned company. A critical evaluation of the objectives of the firm is provided in the main discussion along with valid justifications for those objectives. The discussion aims to formulate the Human Resource policies of the company and argues why the new policy will address the strategic objectives and new outcomes. Finally, the report concludes with the possible risks involved with the strategies and its implication for the HR managers. The primary motive is to formulate efficient human resource strategies that build on existing strengths and opportunities and address weaknesses and threats to improve efficiency in human resource management in a changing environment.

Factors	Description	Impacts
Political	· Free trade policies has helped in the development of the organization while operating in diverse international markets (Reily and William, 2016)	· Low impact
Low impact: Stable political situations and different free trade policies has helped the organization in widening the scope of operations of the same in different international markets (Brewster, 2017). Positive: The stability of the political situation of the nations has helped the business in maintaining the efficacy of the operations while operating in the different international markets
Economic	· Rapid growth of developing economies and the new entrants in the industry has affected the performance of the business	· Low impact
Low impact: Economic stability in most of the economies has helped the organization in undertaking dynamic growth. The economic stability in the economies has boosted the affordability of the customers, which has helped the organization in maximizing its operations. Positive: The enhanced economic stability in the developing nations has helped in assisting the wider growth of the business while operating in the international markets.
Social	· Lack of skilled workforce through improper educational and cultural backgrounds might affect the operations of the business (Armstrong & Baron, 2002)	· High impact
High impact: Lack of skilled workforce in the different operating markets has affected the smooth functioning of the business as per the objectives of the same. The lack of skilled workforce and lack of proper knowledge among the candidates of the processes has increased the costs of the organization, as it has to hire professionals from abroad. Negative: The lack of skilled workforce in the organization affected the smooth functioning of the processes as per the needs of the same. On the other hand, the enhanced cost of labor as the organization hired professionals from abroad affected the feasibility of costs.
Technological	· Increasing R&D initiatives of different competitors has posed a serious threat to the competitive advantage of the concerned organization (Reily and William, 2016).	· High impact
High impact: The rapid growth of different technologies and the enhanced R&D operations of the competitors have affected the position of the business while operating in diverse international markets. Negative: Technological innovations have helped the business in maintaining the feasibility of the same while operating in diverse economies. However, the innovations that are undertaken by the competitors have affected the competitive advantage of the concerned organization in the operating markets. ·
Environmental	The expansion of the environmental policies and adherence of the same has helped the organization in developing different sustainable programs to compete in the industry (Buller & McEvoy, 2012)	· Low impact
Low impact: The development of the environmental policies and regulations has helped the organization in undertaking different environmental protection programs in order to enhance the CSR (Corporate Social Responsibility) related activities. Positive: The development of different environmental protection activities and programs will be helping the organization in enhancing the brand name of the business units.
Legal	Improvement in the employment laws in the developing countries acts as a threat for the concerned organization as it will be increasing the cost of labor and thereby maximize the operations cost that are incurred by the business (Ho, 2014). On the other hand, the evolution of the employment laws has helped the organization in undertaking recruitment of skilled workforce through enhanced standards.	High and low impact
High impact: The induction of different employment laws and regulations by the governments in respective economies has restricted the operations of the business and maximized the costs that might be incurred by the same in order to support the smooth functioning of the processes. Low impact : The different employment regulations has helped in enhancing the educational factors in the economies which has helped the organization in recruiting skilled workforce in order to facilitate the smooth functioning of the processes. Negative: The induction of different employment regulations has maximized the costs that are incurred by the organization through the enumeration of compensation, workplace health and safety regulations. It has maximized the operational costs of the business. Positive : The different aspects of change that is undertaken by the organization is based on the efficacy of the workforce. The enumeration of the employment regulations has helped the organization in recruiting skilled workforce, which will be helping the business in maintaining the efficacy of the operations.

The factors influencing the economic cycle of the company, like the inflation, saving, interest and foreign exchange rates fluctuate in New Zealand, making it risky to undertake any massive business decisions. The legal framework of the company must be in agreement with the contract enforcement rules of the government to avoid political interference. On the bright side, the company has favorable trading partners and strictly abides by the safety regulations in the material sector of the industry. The employee benefits are mandatory although the wage legislation need to be revised. In terms of efficiency and competitiveness in the financial markets, the company might need to raise more capital for sustaining the socio-economic markets.

The demographic structure of New-Zealand’s population is of special concern to the economic prospects of the company. The part of the country resided by affluent families can purchase luxury buildings while the low cost buildings are constructed in the suburban areas resided by low-income families. The entrepreneurial spirit of the society is also of central importance to the Fletcher Constructions. New Zealand has not been encouraging when it comes to new ventures and entrepreneurship (MacLean & Behnam, 2010). As far as technology is concerned, Fletcher Buildings must make new attempts to combat the rival firms who are making new developments in construction. The structure in value chain and technological diffusion has heavy impacts on the technological diffusion.

For identifying the strategies that Fletcher Constructions utilizes for exploiting the external opportunities, countering threats and creating a strong market base, a SWOT analysis was conducted:

Strengths

· Reputable brand values

· Moderately strong management

· Properly functioning supply chain

· Advantageous business size

· Has good capital expenditure returns

Weaknesses

• Staff turnover is high

• Outdated technology is utilized by the organization

• . Limited range of products (Reilly & Williams, 2016)

Opportunities

• High chances of financial leverage

• International market expansion

Threats

· Economic fluctuations

· Intense competition among the competitors

The workforce should be the most valued asset in a construction company. Fletcher Construction in New Zealand is facing several challenges relating to employee turnover, safety issues and the compliance with immigration and HR laws. Some of the HR issues encountered by the company are as follows:

Employee turnovers and temporary workers- The company often hires employees on a temporary basis for specific projects, but the concern here is that several employees are switching to different firms for better pay, benefits and worksite conditions.

SWOT Analysis

Fluctuating labor laws- Apart from the safety regulations promoted universally in all states for construction companies, regional laws impose difficulties on the employers of the industry. The new laws can be highly expensive for the employers to comply with.

Lack of qualified labors-The low unemployment rate in New Zealand is giving recruiters a hard time fishing for top talent. On the other hand qualified workers for the construction industry feel demotivated to take up construction work as a profession as they feel that the job is extremely strenuous with low pay (Ulrich et al., 2012).

Fletcher Buildings have successfully made entries into new markets and have been expanding their business structure ever since. The distribution networks are reliable and strong and the customer satisfaction is favorably high. Product innovation and a sound brand portfolio has been extremely helpful for the company’s growth and success. However, the company needs to invest more in the implementation of new technology. The product ranger are limited, inviting more competitors in the field. Inefficient financial planning can be detrimental for the economic growth of the company.

The identified strengths, weaknesses and environment of the firm, will be useful to critically evaluate the strategic objectives of the firm. According to the findings of the Pestle and Swot analysis, the strategic focus of the company should revolve around the following factors:

Developing suitable and engaging customer value propositions
Health and safety measures for employees
Induction of positive workforce environment
Increasing investments and cash flow

The purpose is to define and redefine the values of the company and the kind of services it offers (Reily& William, 2016). As mentioned earlier, the firm has to encounter heavy competition with rival companies, making it necessary to issue an alluring marketing statement that has the potential to draw customers for all the right reasons.

The primary concern of the HR department is to look out for the interests of the workers. The firm must abide by the motto of happier the employee, better the outcomes. Prioritizing the safety and health of the workers would reduce employee turnovers and keep workers feel secured within their job environment.

The concerned departments of the company should take initiatives for a strong flow in cash performances for a positive outcome for the working capital. This can be achieved by controlling the growth of inventory and reducing the number of debtors. Given the intense competitions and the outdated technology used by the firm for carrying out primary operations, the company is in dire need of a massive investments to make improvements in the execution of IT projects and enhance the digital capacities.

The design of the framework under which the business activities operate must be restructured so that the business units are well in alignment with the kind of products and services offered by the company.

At Fletcher Building, sustainability is all about how we do the business. It is all about making sure there is sustainability of the business and it is making significant economic contribution. However, it is to note that the commitment of this company to sustainability is focused on many factors and one among them is that of- having workplaces which aspire to provide development opportunities for its employees and it is focused on high staff engagement and high performancework practices. The company has a vision that is based on increasing the value of customers by means of differentiating its products and services and by moving forward towards the customization of its offerings to the requirements of its customers. Furthermore, the performance operations as well as the processes of people management in the Fletcher Building are aligned to the objectives of the organization, which is a very important part of commitment and trust based relations, both in the internal and the external environment of the organization. It is also to state that one of the key principles of the strategic human resource management in this company is evaluating how the performance of the organization is been influenced by the ways the staffs are managed. For supporting this, there are several measures that Fletcher building has taken in its practices of human resource which have been very beneficial for improving the effectiveness of the employees as well as for expecting higher levels of organizational and staff performance. They include- high involvement working systems, high commitment working systems, high performance working systems, high involvement working systems or human resource management.

Strategic HR-related Issues

Moreover, it is also to mention that high performance human resource management are very complicated structures and with the same, they are formulated out of different interrelated components (Albrecht et al., 2015). However, in this company, this High Performance work system is created along with planning an empowered and highly motivated working groups or teams for carrying out the key or primary business practices. It is highly focused on training and development of the staffs, reward management, structure adjustment and most importantly, performance management. It strive to build leadership capability structure within the working environment and is also continuously supporting and investing in the boundaries or communities in which it makes its business operations. It also ensures that the right candidate is been rewarded for his or her significant contribution to the company and its production. It conducts different training and development opportunities for its staffs as well. One of example include, it provide on-the-job coaching and feedback counselling. The management monitor the development progress and then feedback the results. Also, all the team members of those team are selected and are trained on problem-solving, technical and their interpersonal skills. This is mainly done to improve their and organization’s performance. They are also committed towards managing safety and health risks all around the business.

Since change is an inevitable and essential aspect of organizational life, it becomes necessary to develop a change management program that is effectively the implementation of corporate and business strategy (Alfes et al., 2010). From what is observed in the external analysis of Fletcher Buildings, the company needs an incremental change. The changes should involve up skilling the workforce, restructuring the HR department and making necessary changes in the internal processes. Lewin’s Change Model can be applied for implementing the alterations that the company requires. The three stages of the model are as follows:

Unfreeze- In this stage, the HR managers should survey the organization and determine the need and ways to change the scenario. A compelling message must be conveyed to all the departments of Fletcher Buildings about the necessity of the changes and the ways it will be implemented. The plan will consider the doubts and concerns of the employees.

Change- This stage involves the primary course of action. The employees will be made aware of the benefits, and the action will be related with operational necessities (Shirey, 2013). The managers must involve employees in the actions and prepare them for the outcome (Hussain et al, 2016). Negotiating with stakeholders can be a wise step for Fletcher Buildings.

Refreeze- This stage will require the managers to identify the barriers to sustaining the change. The heads will be responsible for providing leadership support and creating reward and feedback systems. An important thing to note is that the departments are adapting to a new organizational structure and hence should be informed and supported in all endeavors.

Goal	Activities	Timeframe	Rationale
Staffing	· Issuing advertisements · Undertaking the recruitment of skilled workforce	2- 4 months	The HRM department should develop a strategic plan before beginning the hiring process. The assessment must be wise and effective to make sure that the right people are selected for the right job. This comes along the development of workplace policies. The HR managers must communicate the policies scheduling, vacation times, safety and security to the employees of the organization.
Compensation, benefits and retention	· Undertaking the assessment of needs of the employees · Formulating different compensation and retention strategies · Building on a positive workforce culture	3- 7 months	Apart from paychecks, additional benefits like healthcare, social security, loan and retirement benefits could be offered to the employees to boost motivation and maximize productivity. Something HR managers of Fletcher Buildings can no longer afford to overlook is the task strategizing how to retain the best employees and keep them satisfied and motivated while doing so. Manager need to communicate with employees effectively and manage their performance successfully. Developing a unique retention strategy is a wise step in this context.
Training	· Understanding the training needs of the employees · Developing different processes as per the objectives of organizational growth	4 – 6 months	This involving helping old employees retain and brush their skills and training new ones to develop the desired skills to be an efficient worker. Employees should also be trained in fields outside their expertise so that that they are equipped to handle crises in the absence of higher authorities. The company officials must also remain updated on the new regulations concerning healthcare and employment since matters relating to law and unions always hold the HRM responsible. The HR managers must see to it that workers do not form unions that are detrimental for the company’s growth or reputation along with ensuring that their safety and well-being is taken care of.

Violation and loss of intellectual property- Data is irreplaceable and highly sensitive, the new strategies might increase the risk of data loss. In the case of Fletcher Buildings, the company is risking the loss and violation of both intellectual and concrete property by staff defrauding. This can cause the company serious damage and huge fines in extreme cases. The HR is responsible for securing the privacy of clients and the plans of the company, they are impacted deeply in this case.

Formulation of HR Strategy and Policies

Risks relating to mergers and acquisitions- Construction companies like Fletcher Buildings solely rely on human capital and the new policies might involve merging with other companies, which indirectly affects the workforce of the company (Ho, 2014). The activity involves risks like redundancy payout and disengagement. The HR management must tackle the integration challenges successfully, get involved in the prospective financial changes and maintain open communication with all the workers and managers (Bamberger, Meshoulam&Biron, 2014).

Risks in supply chain- Operational changes might make the supply chain too big for safe management. This increases the risk of scandal and trigger reputational damages. This has adverse effects on retention, engagement and acquisition of talent (Chand, 2016). Anything related to labor has direct impacts on the department of HR. The recruiting process and the operational functions is directly affected by the risks involved in supply chain as a result of implementing the new HR strategies.

Regulation and compliance- The new strategies adapted by the firm may or may not be in accord with the legal regulations of the state. Any break in the regulations could cost the company huge and cast a disreputable name of the company in the market (Mclean et al, 2010). The HR team is responsible for making the staff aware of the regulations and government policies of the state and making sure that they do not breach any of the rules (Meyer et al, 2011).

Conclusion

Therefore, from the above analysis it can be stated that the report aims at providing a valuable insight into the issues relating to the human resource management and develop a strategic framework for the successful operations of business based on the identified issues. The objective of the report is designed to assess the understanding of human resource policies, strategies, and practices through the investigation and explanation of the factors that would have significant impacts on the firm’s choice of HR strategies. For diagnosing the HR priorities, it is crucial to consider some aspects like the key components of the business strategy, the nature of the corporate culture and the extent to which the company needs to pursue a strategy of high performance and the main features of the strategy employed to achieve that performance.

References and bibliography:

Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage: An integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35.

Alfes, K., Truss, C., & Gill, J. (2010). The HR manager as change agent: Evidence from the public sector. Journal of change management, 10(1), 109-127.

Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bamberger, P. A., Meshoulam, I., &Biron, M. (2014). Human resource strategy: Formulation, implementation, and impact. Routledge.

Brewster, C. (2017). The integration of human resource management and corporate strategy. In Policy and practice in European human resource management (pp. 22-35). Routledge.

Buller, P. F., &McEvoy, G. M. (2012). Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, 22(1), 43-56.

Chand, M. (2016). Study of select issues of uncertainty and risk Management In supply chain.

Fletcher Building Limited (FBU) : Company Profile and SWOT Analysis. (2018). Retrieved from https://www.bharatbook.com/MarketReports/fletcher-building/437066

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Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), 6478-6492.

Hussain, S. T., Lei, S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2016). Kurt Lewin's change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation & Knowledge.

MacLean, T. L., &Behnam, M. (2010). The dangers of decoupling: The relationship between compliance programs, legitimacy perceptions, and institutionalized misconduct. Academy of Management Journal, 53(6), 1499-1520.

Meyer, M., Roodt, G., & Robbins, M. (2011). Human resources risk management: governing people risks for improved performance: opinion paper. SA Journal of Human Resource Management, 9(1), 1-12.

Reilly, P., & Williams, T. (2016). Strategic HR: Building the capability to deliver. Routledge.

Shirey, M. R. (2013). Lewin’s theory of planned change as a strategic resource. Journal of Nursing Administration, 43(2), 69-72.

Ulrich, D., Younger, J., Brockbank, W., & Ulrich, M. (2012). HR talent and the new HR competencies. Strategic HR Review, 11(4), 217-222.

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