1.4.2 Approaches to Staffing

Approaches to Staffing

Key Definitions

Staffing: The thought process behind determining the broad approach and the specifics of how people are needed in each role in a business. 

Asset: Something that is a benefit to the business. 

Cost: Something that is a burden to the business.

Flexible Workforce: A workforce specifically designed to grow and decrease in size depending on when they are needed. 

Multi-Skilling: When workers are trained in multiple skills so they can perform in multiple areas of the workplace, also known as 'horizontal promotion' in Japan. 

Part-Time Working: When employees work a set amount of time and days in a week, but this is less than a full-time job. 

Temporary Work: When new staff are hired on a short-term contract basis in order to meet the needs of the business.

Home-Working: When an employee is able to work from home, often on a laptop connected to the main office.

Outsourcing: The movement of a task or process out of the domestic area to somewhere that is cheaper.

Dismissal: When a business removes an employee from their staff for various reasons without any form of payment.

Redundancy: When a business removes an employee from their staff for various reasons with a separation payment.

Trade Union: An organisation that employees pay to join in order to gain greater power and security at work. 

Collective Bargaining: The key function of a trade union, in which the whole union would join together and bargain with the employers on behalf of all of the employees.

Individual Bargaining: When an individual and an employer negotiate the terms of an individual contract, often in the favour of the employer.

Core Workers: Employees that are crucial to the business operations and support whatever makes the business distinct, making them often subject to high job security, high salaries, and preferential working conditions. 

Peripheral Workers: Employees that are not seen as essential to the business operations that may carry out necessary tasks, but may be only needed on a temporary basis and can be seen as easy to replace.

Subcontracting: When another business is used to perform or supply certain aspects of a business's operations, a form of outsourcing.

Hot-Desk: An approach that provides a temporary desk for homeworkers to use when they come in to the main office, but they are not allowed to leave personal items there.

Zero-Hours Contract: An employment contract in which duties and hourly pay rates are agreed, however there is no guarantee of work and income in any specific week.

Rationalisation: The process of cutting down costs through the reduction of staff and assets owned by the business, often done when the economy is struggling.

Staff as an Asset; Staff as a Cost

Some companies are consistently good at being employers over time, treating their staff with the utmost care. They pay pensions, try their hardest to avoid redundancies, and they invest heavily into staff training and well-being. By doing this they can definitely say that they treat their staff like an asset to the business. 

On the other hand, some employers treat their staff like the binary opposite. They pay the lowest wages that they can get away with, sometimes using zero-hours contracts extensively. They are also ready to make staff redundant and try to avoid paying into pension funds. By doing this it can be said that they treat their staff like a cost or burden to the business. 

Flexible Workforce

Businesses need flexibility within their workforce in order to avoid being hit too hard by a decrease in demand. The increased need for flexibility may have increased for a multitude of reasons in addition to the economic factors:

• Constant improvements in technology means that the marketplace is subject to frequent and rapid changes. Businesses should be able to anticipate and respond quickly to change in order to maintain their competitive edge. 
• Many consumers want more customized goods and services, so firms have to adapt the production process in order to meet demand while still operating efficiently and keeping costs down.
• Increasing competition, especially from overseas firms, has forced businesses to faced with fluctuating or seasonal demand to introduce greater operational flexibility in order to eliminate any unnecessary costs.

To succeed in modern markets that are often fragmented into relatively small niches with ever-changing customer tastes many businesses have adopted a 'lean production' strategy. This implies that the use of machinery that can be quickly reprogrammed to carry out a range of tasks and the creation of a multi-skilled and flexible workforce that can quickly adapt to meet the changing requirements of the business.

Achieving Greater Flexibility Within the Workforce

 Multi-Skilling

This occurs when employees are given the training and knowledge to carry out a multitude of tasks within the workplace instead of just specialising in one specific area. This can be encourage through the use of job rotation, a task in which workers carry out an increased number of tasks at the same level of difficulty. This should mean that the business's human resources can be used more effectively and efficiently. It ensures that employees can be given the skills needed to cover for staff absences if needed, which minimizes any internal disruption or loss of production. 

Individuals may respond positively to the increased variety and challenges provided, which can improve motivation and productivity. However the business may be unwilling to provide this as it means more money is spent on training the staff, so it depends on whether the business views their staff as a cost or an asset, especially if the business cannot see the benefits of adopting multi-skilling within the business.

Advantages	Disadvantages
Increases in productivity from greater utilisation of employees	Potential loss of production as workers switch between different tasks
Less disruption to production caused by staff absences	More training requirements and costs as individual workers acquire a wider range of skills pushing up costs.
More employee motivation created by more varied challenges and tasks at work	Workers may be reluctant to gain new skills, especially if there is no corresponding pay rise

Part-Time and Temporary Working

Employers like to have part-time workers because they provide the business with flexibility, such as to have extra transport staff during rush hours. It can be questioned as to whether businesses want part-time or if they are forced to accept it. Part-time work involves having employees work on a contract with shorter days and hours than a full-time worker would have. 

Temporary work is similar, it gives staff a short term contract which makes it easy for the company to cut down their staff without getting criticized by the public. All they would need to do to reduce their staff is to just wait until the contract has lapsed and the terms of the contract are finished, and then the staff would be forced to leave the company. 

With this, the problem for the employee comes from the fact that questions can be raised about whether they are earning enough money to support their family, and whether they would be able to get a bank loan or a mortgage.  This creates an air of uncertainty around the job, and a lack of job stability often demotivates employees. 

Flexible Hours and Temporary

More flexibility can also be created by moving away from the traditional 9-5 working day and 38 hours working week in order to respond to customer demands. For example, banks, insurance companies and mobile phone operators make extensive use of flexitime systems to provide 24-hour employee cover via the telephone and the internet. 

Having greater flexibility can also create numerable other benefits for employees too, such as helping those who have family or other commitments during working hours by giving them a more flexible working arrangement. It can also help them to improve their recruitment process, increase staff motivation and reduce their labour turnover which in turn reduces costs and boosts company productivity. 

One example of time flexibility is the use of zero-hours contracts. This is an employment contract that has 0 set as the minimum hours compared to the, for example, full-time teacher contract in which the minimum hours are set at 35 - basically the employer guarantees no work with them. On a zero-hours contract a family could go hungry as they cannot afford food, and the chances of getting a bank loan are next to none. These contracts are commonly taken by younger workers and those who work in the poorly paid sectors. 

Another method of flexible working is the use of the home worker. This is someone who works at home, most of the time on a laptop that is connected to the main office. In some cases the home worker will do some days of the week working at home, and then they come in and do some days in the office working on a hot-desk. Some enjoy this arrangement, but it can make some of the others feel insecure about their work. This would be ideal as an optional arrangement, employees do not like having this forced upon them. 

Outsourcing

This is the process in which a business finds an external company to do part of the production process for them, either to cut down costs or to achieve a better level of service. All businesses need to have enough staff on hand to respond to sudden increases in customer demand, but they also need to be able to bear the costs of employing additional unnecessary staff in case the sales were to suddenly go into decline. 

One way of outsourcing is to use temporary contracts, agency staff, and subcontracting, or outsourcing certain operations to other businesses. Flexible temporary staff enable businesses to respond to sudden sales increases by quickly increasing the workforce and then reducing the workforce just as quickly when sales drop again. However, even though the reliance on temporary staff and outsourcing may help to reduce costs and improve the reaction to change, productivity may suffer due to a lack of expertise and worker loyalty.

The Distinction between Dismissal and Redundancy

There are 3 main reasons why companies would need to let go of their staff:

1. When individual staff members lack the competence to carry out their duties effectively or they are too disruptive and impact the competency of others. 

2. When economic or other factors reduce the demand of an entire industry, forcing companies to rationalise and cut their costs in order to stay above their break-even operation points.

3. When competitive or other factors cause the business to lose market share in a way that forces the management to cut down on staff.

In cases 2 and 3 the requirement to cut down staff is about the posts and not the people. A redundancy happens when the job position doesn't exist any more, In the UK if a business is making someone redundant they have to give at least 3 months notice and in this time the management have to consult with their employees and/or the trade unions involved. As there is typically no way the change the mind of the employer making the redundancy, the employee is let go from the company with a legally-required severance package. 

As the redundancy is about the job, dismissal is about the individual. An employee can be dismissed (or 'fired') on the spot for gross misconduct, for example, by being violent or stealing. An employee can also be dismissed fairly, due to an incompetence to do the job, as long as the management can demonstrate some form of fairness in giving a warning and offering either retraining or a switch to an easier job. Where redundancy is made with payments, dismissal involves having no payments made to the individual. 

Employer-Employee Relationships

A good boss will realise that the success of a business depends on the full participation of as many of the staff as possible. Small businesses may have an informal group consisting of one person from each department that have monthly meetings to raise awareness about any problems or issues within the business, and also discuss future plans for the business. In larger businesses more formal methods are used to ensure that there is a structure to allow an element of democracy within the business. An alternative to this is that the staff belong to a trade union that represents their interests through collective bargaining. 

Trade Unions and Collective Bargaining

A trade union is an organisation that employees pay to join in order to to gain greater power and security at work. Think of the phrase 'unity means strength', this is part of the traditions of a trade union. Where one individual has has little or no power when negotiating with the employer, a trade union has a lot of power and influence as a collective. The trade union operates with collective bargaining, meaning that they bargain with the employer on behalf of all of the employees.

Unions traditionally concerned themselves solely with getting satisfactory pay rates for work in a safe environment. Today this has changed and the most important aspects of the work of a trade union is the protection of worker rights under labour laws. More time is spent now dealing with health and safety, and workplace discrimination. Another focus of these unions is pensions; recently many companies have cut back on the pension benefits, and the unions are fighting these cutbacks as hard as they can. 

Individual Bargaining

Employers typically favour individual bargaining as it puts the boss in the stronger position over the individual. This situation can be presented as a matter of 'freedom' but it is almost always actually a matter of power. The huge decline in union membership over the past 30 years has coincided with a significant reduction in income equality. The weak bargaining power individuals have mean that workers today are a lot more worse off compared to their managers than they would have been 30 years ago.