Business Factors

Topic 3

1
Learning outcomes
LO-2. Be able to develop human resource plans for an
organization

Assessment outcomes
2.1. Analyze the business factors that underpin human
resource planning in an organization
 Introduction
• Developing a HR strategy to support the business
plan requires HR plan to be recognized as a
fundamental part of the business planning
process.
• Integrating HR strategy and strategic planning is
fundamental to achieving business excellence.

3
 Business Factors
There are many business factors that underpin human
resource planning. some of them are mentioned below:
1. Business Growth 7. Changing Nature Of Work
2. Business Decline 8. Impact Of Technology
3. Business Change 9. Increase In Productivity
4. Labor Cost Control 10. Increase In Efficiency
5. Capital for Labor 11. Business Competition
Substitution 12. Labor Market Competition
6. Location of Operations 13. Employee Development
 Business Factors
• There are many business 6. Location of Operations
factors that underpin 7. Changing Nature Of
human resource planning. Work
some of them are
mentioned below: 8. Impact Of Technology

1. Business Growth 9. Increase In Productivity

2. Business Decline 10.Increase In Efficiency

3. Business Change 11.Business Competition

4. Labor Cost Control 12.Labor Market

Competition
5. Capital for Labor
Substitution 13.Employee Development
5
 1. Business Growth

• Growth dominates the business agenda in the

new millennium.
• For many large, diversified companies the new
path to growth is one of clear focus.

6
 2. Business Decline
• Unstable financial markets influence
profitability and therefore growth or
downsizing plans.

7
 3.Business Change
• In the dynamic business environment today, change
seems almost inevitable at some state for most
organizations.
• In the majority of organizations, employees have to
compete for limited resources.

8
 4. Labor Cost Control
• In competitive environment, low cost becomes
one of the strategic priority of businesses.

9
 5. Capital for Labor Substitution
• Capitalized items are used for labor
substitution
• It may be physical capital, which includes
buildings, machinery, tools, and other items
that are used to produce goods and service.

10
 6. Location of Operations
• Choice of location is very important for
businesses.
• Manufacturing – focus on resources
• Services – focus on customers

11
 7. Changing Nature of Work
•Flextime: flexibility applies to starting and finishing
times.
• Compressed workweek: A full-week schedule , such
as four 10-hour days.
• Job sharing: Two or more employees split a full-
time position, diving the responsibilities, and, and the
compensation.
• Work-at-home: A program that enables employees
to complete work at home (or at a remote office closer
to home) on a regular basis. It is often referred to as
“flexplace” or “telecommuting.”
12
 8. Impact of Technology
• Work moves from manual to knowledge
based, through computers and associated
technology.

13
 9. Increase in Productivity
• Increase in productivity is one of strategic
priority of an organization.

14
 10. Increase in Efficiency
• Waiting time, speed to deliver etc. are more
important for today businesses.

15
 11. Business Competition
• today businesses are facing challenges like
highly competitive, globalized and increasingly
unpredictable environment.

16
 12. Labor Market Competition
• Labor market is basically a pool of potential
employees in which organization can fish.
• The significant features include:
– the availability of skills, qualifications
– how other companies compete for the available
labor and the type of package they are prepared to
offer individuals to attract them
– unemployment in a particular area

17
 13. Employee Development
• To a certain extent this is unavoidable and
some organizations view it as healthy, as
employees move on to gain experience and
skills, allowing new employees to bring new
ideas and skills into the company.

18
 Discussion
• Let consider about business factors in your
selected organization or any organization
which you are familiar.
• Think about only business factors or business
plan or business agenda.