Assignment Task:
Task:
Executive summaryThis report is an analysis of Acme Services and its Human Resource issues and their human capital management. Acme provides cranes and hoists services to the construction industries in Australia and New Zealand and has experienced rapid growth and runs the risk of not having sufficient skilled labour soon to support this growth.
The analyses performed included an environmental scan performing a PEST and a SWOT analysis, a labour demand forecast, a labour supply analysis and lastly a future demand analysis.
The analysis found that Acme operated in an environment which attracted the trade unions and their demands for increased entitlements which meant rising costs, this creates an environment for competitors to poach labour from Acme. Added to that there is the aging workforce and insufficient younger skilled tradespeople entering the workforce putting more pressure on attracting and keeping labour.
Acme has a strong market presence due to experienced personnel and high-quality equipment which gives them an advantage, however as mentioned above there is a shortage of new tradespeople coming into the workforce. The opportunity for Acme is to step forward with HR and approach schools in the area to promote apprenticeships and create a stream of future tradespeople.
Labour demand forecasting in the past has been carried out by section managers and not in a coordinated national approach and has not always been effective. The options of using alternate labour to full-time employees is examined and found not to be as efficient as full-time employees.
This report concludes that Acme management needs to embrace a fully integrated Strategic Workplace Plan which incorporates both quantitative and qualitative approach to Human Resource Management and will require centralising of all the HR functions to meet the ongoing challenges of employing, training, and keeping skilled labour.
This report is limited to the blue-collar workers at Acme.
IntroductionAcme Services (Acme) provides and operates hoists and cranes to the construction industry in Australia and in New Zealand and has experienced rapid growth in the last decade growing its employee count to over 350 personnel. The personnel range from unskilled labourers to advanced riggers and electricians in the field, in the offices there are junior office staff through to accountants, engineers and senior managers.
The Human Resource Department (HR) is relatively new and inexperienced and does not enjoy the unilateral support of the senior management team and directors and would be classed as accommodative CITATION Nan17 \l 3081 (Nankervis et al. 2017). In recent times the ability to attract and keep the right people has become more and more difficult, also to continue this growth the ability to attract and employ the correct people will become imperative. To overcome and face these challenges Acme must look to embracing a Strategic Workplace Plan (SWP) and emphasizing a shift in leadership where individuals, the workforce and management work together with HR to anticipate the various future scenarios CITATION War19 \l 3081 (Ward & Sokol 2019).
This report will provide an environmental scan that Acme operates within, labour demand forecasting, labour supply analysis and put forward recommendations that would address the ongoing and future challenges that Acme is facing but will be limited to the blue-collar workforce.
Environmental ScanTo better grasp the environment that Acme Services operates in, a PEST analysis will audit the organisations Political/ Legal, Economic, Social and Technological challenges.
To further comprehend the internal and external factors affecting Acme a SWOT analysis will examine Strengths, Weaknesses, Opportunities, and Threats. The purpose of this analysis, as described by Helms, 2010, is better understanding how strengths can be leveraged to realise new opportunities by addressing complex strategic situations.
PEST AnalysisPoliticalThe construction industry in Australia like most other industries is progressively adopting more indigenous inclusivity and participation. Acme will now partner with an accredited First Nation supplier Murrina Group. There are issues with this arrangement, such as poor training and lack of skills. This labour source also is vulnerable to the challenges that the mainstream workforce experiences such as high employee turnover and dissatisfied workers.
The industry is also working towards a more diverse workplace by hiring female tradespeople in the field. Acme is at the forefront and is supportive of this initiative with female tradespeople being the norm in its workplace.
The Eastern states in Australia are a battlefield for the Conservative federal government and the Union movement. There is constant pressure and increasing demands from the unions to increase workers entitlements through collective bargaining CITATION Nic17 \l 3081 (Nicholson 2017) which puts pressure on costs making Acme uncompetitive.
Economic
To continue to be a relevant competitor in the Tier 1 construction arena Acme must deal with Trade Unions who continue to demand increased entitlements for their members. To not accept these increased costs in the business, Acme puts itself at risk of skilled workers looking for increased entitlements from Acme’s competitors.
Other employees in Acme who are not members of trade unions have also received increased entitlements over the years. The 1970’s were known as the “Me Decade”, the 1980’s as the “Greed Decade “and the 1990’s as the “New Gilded Age” CITATION Lan20 \l 3081 (Langerud 2020) which resulted in entitlements such as maternity / paternity leave as set out in the Australian National Employment Standards CITATION Nan17 \l 3081 (Nankervis et al. 2017). These cost increases can only be absorbed for so long before they need to be passed on the builder.
Due to pressures of increased costs of employee wages and entitlements the construction industry is segmented into those that support Enterprise Bargaining Agreements (EBA) by the trade unions and those that do not recognise them. The non- EBA builders expect much cheaper rates than can be accommodated, this, in turn, has created competitors to Acme who cater to the non – EBA segment. The challenge is how to continue to pay the EBA entitlements and remain competitive in both segments of the building industry.
SocialWith the issue of aging work populations affecting most of the Organisation for Economic Co-operation Development (OECD) CITATION Cal20 \l 3081 (Calzavara 2020) there are serious issues with the capacity of workers to continue to perform manual labour and adapting to rapidly changing technologies.
There are other considerations with an aging workforce is that HR will need to more cognisant of workers retirement plans and needs CITATION Nan17 \l 3081 (Nankervis et al. 2017), further to this there is the friction or intergenerational conflict due to the co-existence of four generations in the workplace, these being veterans, Baby Boomers, Gen X and Gen Y.
TechnologyWith technology advancement becoming more rapid there are several impacts on Acme and challenges for HR. Firstly there will be a reduction in the number of employees required with the adoption of technology and support software in areas such as HR, Payroll and Procurement, secondly, the remaining employees need to be trained to keep abreast of the changes in technology. And lastly, there is a trend where new entrants into the workforce are becoming more qualified.
This however has not impacted on the blue-collar workers as their work requires manual dexterity, the ability to problem solve and to get into tight physical locations
SWOT AnalysisStrengthsAcme maintains a strong market position due to past performance and the ability to exceed builders’ expectations when delivering a contract obligation. This is mainly due to a handful of key personnel. Acme also imports high-quality cranes and hoists to operate in the Australian and New Zealand market both of which have technological advantages over the competitors. This provides HR with a unique position when headhunting for personnel as there is no need to explain to potential employees who Acme is.
WeaknessWhile Acme enjoys a great reputation, HR still has difficulty in recruiting experienced and skilled tradespeople, this is mainly because any skilled tradesman who is competent is generally employed, and their current employer is wary of them being poached. The other critical issue is there is a shortage of tradesmen and apprentices nationally unless this gap is not addressed in the near future Acme and other companies in Australia will be severely impacted by the lack of tradespeople.
Further to the difficulty in sourcing skilled labour then there is the issue of retention of skilled labour.
OpportunitiesAcme has, post-COVID, still managed to win numerous new projects that will commence in the second half of the 2021 calendar year which will require additional skilled labour over and above current levels. The number and size of the required workforce will be addressed in the following sections covering Labour Demand Forecasting.
The opportunities before Acme that will enable it to continue to grow and capitalise on its order book and the upcoming workload is to find, develop and retain skilled labour.
There is an opportunity that governments need to take to fill the skilled labour shortage gaps, Acme can approach local schools and offer traineeships and apprenticeships in the local areas and influence some of the youth to join Acme as tradespeople.
ThreatsThe threats facing Acme imminently are threefold, one, the inability to attract sufficient skilled labour to carry out the workload that is looming in the very near future, two, competitors poaching our existing labour, further putting pressure on performance abilities, and last, the continued union demands for increased entitlements.
Labour Demand ForecastingLabour demand forecasting is an important element of HRM and SWP and should be ongoing to be effective CITATION Nan17 \l 3081 (Nankervis et al. 2017). Winning many projects to be completed in a short time is not a new predicament for Acme, but Acme is now the dominant player in Australia and New Zealand in its field and has worked hard to achieve an enviable reputation. Therefore, not getting labour and staffing levels could be catastrophic. There are two approaches to labour demand forecasting: quantitative and qualitative CITATION Nan17 \l 3081 (Nankervis et al. 2017).
Quantitative forecasting is a top-down approach and involves using the use of statistical or mathematical techniques which can be divided into three techniques, indexation, trend analysis and simulation categories as (Nankervis et al. 2017).
Qualatitive forecasting is a bottom-up approach which also can be divided into three techniques, the Delphi approach, the managerial approach and the nominal group technique CITATION Nan17 \l 3081 (Nankervis et al. 2017).
Promoting staff internally to supervisors or mangerial roles creates more engaged and committed personnel CITATION DeV13 \l 3081 (Devaro & Morita 2013), Acme supports this practice and boasts a high percentage of long term employees.
The most popular technique for Acme has been the managerial technique where each section manager forecasted their own labour and staff requirements on projected workload. However, to date, this has been performed by each section manager in isolation of other sections which has in the past not always been managed or resourced all that well. However if the SWP was to be embraced then the forecasting would be coordinated through HRM and adopt strategic workforce agility engaging teams as well as individuals CITATION War19 \l 3081 (Ward & Sokol 2019).
Labour Supply AnalysisThe labour supply analysis follows the labour demand forecast and reviews its existing workforce and balances that against the labour demand forecast. Should the organisation lack the internal supply of employees it will need to look to an external supply of labour CITATION Nan17 \l 3081 (Nankervis et al. 2017).
The options available for the external supply are recruit full time, part-time, contract labour or casual. There is the emerging gig economy where workers take on short-term or project-based jobs as described by Zsolt & Peter, 2020. Unfortuntely, because of the nature of project-specific engineering solutions and requirements the most ideal employee is the fulltime employee. The fulltime employee is more engaged and committed to the organisation than the part time employee CITATION Jou18 \l 3081 (Joung, Choi & Taylor 2018).
Acme is currently growing the business in New Zealand on the back of gig workers and the result is disastrous to Acme and the builders, there is no ownership or commitment to tasks and activity from the casual or gig worker CITATION Jou18 \l 3081 (Joung, Choi & Taylor 2018).
The immediate labour supply requirement for Acme pertains to the rigging and trades personnel, there is an upcoming increase in workload of twenty per cent which must be met. The current frontline national workforce of 250 needs to be increased to 300.
In the past or same as before (SAB) CITATION Nan17 \l 3081 (Nankervis et al. 2017) trend analysis has been the most successful model Acme used to forecast labour requirementrs. The main drawback to this technique is that it was completed in isolation at state level not nationally.
Therefore the calcualtion of 300 personnel is based on 60 hours per week or 240 hours per month per man. Current workload is 250 personnel x 240 hours per month or 60,000 man hours. In truth many of the workers put in 72 hours per week, but the 60 hours is used as it allows for personnel having leave.
The future workload is calculated on 72,000 man hours, therefore 72,000 / 240 man hours equals 300 personnel.
Future Demand and Supply
Acme can draw on past records that demonstrate that on average 10% of the workforce will resign, retire, go on maternity leave, be promoted, or moved to another part of the business or terminated in any 12-month period. Therefore, in addition to requiring an additional 50 personnel HR needs to recruit another 25 personnel in the next 12 months to adequately address future labour demands.
The importance of HRP and SWP becomes more evident as Acme’s demand for additional labour continues, to future proof the demand and supply of labour Acme needs to integrate staffing plans to align this effort with the company strategy.
RecommendationsThe HR department at Acme needs to address the politics of getting broad consensus so they can engage in a conversation about strategy at all levels of the business CITATION War19 \l 3081 (Ward & Sokol 2019), senior management need to embrace a fully integrated and strategically integrated (HRM) as per the Harvard model CITATION Nan17 \l 3081 (Nankervis et al. 2017).
Should both these conditions be met Acme will be able to manage its future human capital requirements far more efficiently than in the past. The HRP will ideally use both quantitative and qualitative approach to fully integrated SWP which will require centralising of all the HR functions including future, demand, and supply analysis.
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