A successful human resource strategy is essential for an organization’s realization of its missions and goals. Human resource management involves decisions and practices that directly affect the personnel of an organization. It essentially entails nurturing employees to make the most of their capabilities and increasing their potential for better performance in the workplace. The manager’s first task is to align the workforce that is best suited to different constraints. This process of organizing employees and their roles in achieving government policies, organizational goals, and employee benefits is known as workforce planning (National Institute of Health, 2020). In order to recruit and retain employees and minimize employee problems, human resource managers must constantly monitor external and internal environmental factors and adjust their action plans accordingly. Various factors influencing effective workforce planning are not static. What works for one company in a given industry may not suit another firm in a different sector. This paper compares some of the internal and external environmental factors that influence the technology and retail industries differently, drawing on case examples of Apple, Inc. and Amazon.com, Inc., respectively.
External Factors
External factors are those that lie outside an organization but impact its workforce planning. They include political and legal aspects, labor supply, competition, globalization, social and cultural factors. All these factors influence the grievances a company has to handle. However, political and legal factors, as well as labor supply directly influence workforce planning right from recruitment through to retirement.
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Political and Legal Factors
The political philosophy of the various political environments impacts organizations’ human resource planning and operations. Managers adhere to such philosophies and ensure their planning is in line with government policies and agreements. For organizations that operate across various nations such as Amazon, they are affected by political factors in each of these locations. For example, the company has faced criticism from various political players, including President Trump and the GMB union of the United Kingdom. According to Elliott (2018), many analysts believe that the company’s move to raise its employees’ minimum wage in the United Kingdom and the United States was influenced by political pressure. Simultaneously, the UK government's decision to increase the retirement age for males to 75 years (Age UK, 2020) has a direct impact on Amazon owing to the company’s operations in the country under its retail market Amazon UK. Following this change, the firm is deprived of the opportunity to employ new talents without overstretching its budget.
On the other hand, Apple has its products and services in use across many countries. More specifically, the company’s app store is available in over 175 territories and nations (Apple Inc., 2020). Given the company's line of business, the political stability and the improving policies in the United Kingdom and the United States favor the company allowing it to expand. Consequently, the number of its employees in these countries has grown rapidly, with the firm reporting a 1500 percent increase in the number of employees in the UK between 2000 and 2018 (Apple Inc., 2020). With more free trade policies created over time, the company's opportunities to distribute its products increase, creating more employment opportunities within its ranks, starting with distributors to engineers who develop the products to be distributed.
Labor Supply
Availability of qualified labor determines the compensation that companies offer to attract employees. In a market where many qualified candidates exist, employers have to part with less salary compared to where the qualified candidates are limited, and unemployment rates are low. The human resource managers regularly review their compensation structure to ensure they remain competitive enough to attract and retain the market's best talents. Meanwhile, the rates must be kept low enough to ensure the firm maintains its financial competitiveness. Owing to Amazon having fewer established competitors and the retail market's saturation by a qualified workforce, the firm's remuneration is relatively low compared to its revenues, yet very competitive enough to attract and retain key employees. That the company was obliged to increase the minimum wage for its employees in the UK and the US owing to political pressure is confirmation that its compensation rates were low.
On the contrary, Apple has many competitors in the industry, also chasing after the same employees. Consequently, the firm has to offer higher compensation to attract and retain the market's best skills. This perhaps explains why the firm has run into several problems with authorities in different nations over employment matters. For instance, the company was accused of child exploitation in its supply chain (Meisenzahl, 2019). It was recently battling claims of keeping more temporary employees in China than the country’s labor laws allow (China Labor Watch, 2019). Besides, the high demand and low supply of qualified candidates in the UK has seen Apple employ more Americans in its UK warehouses (Amazon Jobs, 2020). To support this argument, the publication alludes to various UK prime ministers admitting that the country’s workforce needs more training to sharpen their skills and attitudes.
Internal Factors
Internal factors are those that influence an organization’s employee planning form within its premises. They have more to do with the firm’s internal operation structures and regulatory compliance. These factors include s election methods and practices, training and development, recruitment advertising methods, and i nternal policies and employee relations. While all these factors affect HR operations, the first two directly impact the workforce planning the managers must have in place.
S election Methods and Practices
The various recruitment methods used by managers to fill vacant positions influence workforce planning. The managers recruit in different ways, such as externally or internally. External recruitment involves filling vacant positions with any qualified candidate from outside the company, while internal recruitment is filling the vacancy with suitable candidates from the company's existing workforce. Amazon has a unique selection strategy, consisting of various assessments, and two-stage interview (Amazon Jobs, 2020). After candidates apply online, they take assessments that test their knowledge of the company, leadership skills, and more. Afterward, they take part in phone interviews from where the sacksful candidates are invited for in-person interviews. The interviews involve technical knowledge tests depending on the role applied for, with those applying for software roles going through software development assessments. The successful candidate then undergoes orientations before taking up their positions. This process ensures effective staff selection so that the company only brings on board those qualified for the roles for which recruitment is being done.
Meanwhile, Apple acts in the belief that no single selection method is completely effective. As a result, the company combines several selection methods to process the highest possible level to minimize errors (Koti et al., 2014). Other than the skills assessment and interviews, the company incorporates psychometrics in its recruitment process. It entails a mental evaluation of candidates for particular positions using psychometric instruments. Although this method is very efficient, it is equally expensive (Edenborough, 2005). Therefore, Apple has to spend more time and financial resources in its recruitment process to get the right candidate to form the large pool of talents available in the market.
Training and Development
Employee training and development is key to an organization’s success as it offers a rare opportunity to strengthen the skills employees need to perform effectively. This process can impact companies differently depending on the training needs, which, to some extent, is determined by the industry. For instance, Amazon is a retail company with different training needs from Apple, an organization in the technology industry. Even though Amazon conducts technical training such as software development courses (Amazon Jobs, 2020), only a handful of its staff in the software roles require technical training. Most of its employees deal with customer relations; thus, the firm's key training area is customer service. Such training is inexpensive despite the company having a massive training initiative, it spends relatively less money on training.
Contrarily, Apple's training needs are more technical. The company needs to keep abreast with technological advancement and fierce competition in the industry. Consequently, it must engage the staff in training that will spur creativity and innovation. The high expectations the training lays on the employees influence e the company's workforce planning. The company emphasizes extra hard work among its employees at the expense of a life-work balance (HR Strategy Tools, 2020). Furthermore, the company does not fully support career paths and does not provide key information to employees, making it up to the staff to seek information about roles other than theirs on their own (HR Strategy Tools, 2020). The training program is all-year-round and is relatively expensive compared to non-technical training.
Conclusion
In conclusion, the impact of external and internal environmental factors on workforce planning varies from company to company across the various industries. In some instances, one factor impacts different industries positively, while in some, the impacts may be negative for one and positive for another. In order to recruit and retain employees to the greatest extent and minimize employee problems, human resource practitioners must constantly monitor external and internal environmental factors and adjust their action plans accordingly. It is therefore important for HR managers to understand the potential impact of internal and external factors.
References
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Meisenzahl, M. (2019). Apple, Google, and Tesla were accused in a lawsuit of 'aiding and abetting' child deaths in Congolese Cobalt mines . Business Insider. https://www.businessinsider.com/apple-google-tech-congo-child-labor-lawsuit-2019-12
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