Factors of Planning Human Resource Requirements of an Organisation

P1: Describe the internal and external factors to consider when planning the human resource requirements of an organisation

Ford

Ford Motor Company is an American multinational automaker headquartered in Dearborn, Michigan, a suburb of Detroit. Ford was founded by Henry Ford on June 16th 1903. Along with selling automobiles, commercial vehicles and luxury car brands (under the Lincoln brand), Ford also produces tractors and automotive components. Ford also owns Brazilian SUV manufacturer, Troller and Australian performance car manufacturer FPV.

Currently, Ford’s Mission Statement is ‘One Team. One Plan. One goal’- In translation, it is the people working together as a lean, global enterprise for automotive leader, and is measured by customer, employee, dealer, investor, supplier, Union/Council, and community satisfaction. They are planning to aggressively restructure to operate profitably at the current demand and changing model mix; accelerate development of new products customers want and value; finance their plan and improve their balance sheet; work together effectively as one team. Ford’s goal is an exciting viable delivering profitable growth for all.

http://www.strategicmanagementinsight.com/mission-statements/ford-mission-statement.html

In this assignment I will be describing explaining how Human Resource Management (HRM) impacts on Ford and describing the internal and external factors that Ford HRM will need to take into consideration when planning the human resource requirements of their business. Human Resource Management (or HRM for short), is a function in an organisation designed to maximise employee performance in service of their employer’s strategic objectives –The Mission Statement. It is the management of people within an organisation that focuses on policies and systems.

Internal Planning Factors

Internal planning factors are the things that are happening inside of a business that they have control over. Internal panning factors can be manipulated and changed to ensure business success.

Human resource (HR) planning in the establishment phase of the employment cycle involves forecasting the number of employees available and the number of qualified employees demanded in the future. HR planning must be related to business strategies. You will recall that a business strategy is an action that is taken to achieve an organisation’s objectives. A common strategy used in order to achieve the objective of increased profitability may be to reduce business costs. HR must forecast the future demand for employees and estimate the supply available to meet that demand in order to avoid having too many employees on the payroll. If supply of employees is forecast to be greater than demand, HR will have to plan for a reduction of the workforce. The Human Resource Planning Cycle is a process that identifies current and future human resources for an organisation to achieve its goals. The planning of this is usually served as a link between human resources management and the overall strategic plan of an organisation.

http://www.wiley.com/legacy/Australia/PageProofs/BUS_MAN/3_4/c05TheHumanResourceManagementFunction-TheEmploymentCycle_WEB.pdf

There are four steps in the Human Resource Planning Cycle:

• Assessing current work force-This is based on the corporates objectives and assessing how current HRM will meet future needs.
• Analysing future workforce- Internal changes and external factors need to be considered so the corporation can work towards their business strategy.
• Identifying gaps- New jobs within the organisation may mean that gaps need to be filled. These need to be identified quickly so business activity is consistent.
• Developing strategies to cover gaps- As new jobs within an organisation are created; a strategy will be needed in order to fill this gap. HRM may decide to cover this gap be recruiting internally or externally. Training, promotion and re-assignment are always options for new jobs that have opened up in an organisation.

So, now that you know what the Human Resource Planning Cycle is, how does is affect Ford? Well, according to SeekingAlpha, Ford’s innovation is quietly accelerating as they plan to penetrate new markets; one of them is a high-end, eco-friendly line of vehicles. As Ford are preparing to enter new markets by selling a different range of auto motives, Ford HRM will need to identify the gaps in terms of personnel that will be researching and manufacturing these new technological ‘EcoBeats’. As this range of vehicles is fairly different from their previous lines of auto motives, extensive research will be needed in order to ensure that the new products are living up to their names of being both high-end and eco-friendly, Ford HRM may want to consider recruiting external, specialised personnel. However, this is not their only option. As Ford has been quasi-involved with eco-friendly automobiles and automobile engines, they may want to consider reassigning internal staff and offering them incentives such as training and promotions to ensure that duties are being completed.

http://seekingalpha.com/article/2798945-ford-ready-to-truck-through-2015?page=2

Furthermore in relation to this market penetration, Ford announced it would be it would be creating 318 jobs at Dagenham, in a new plant building low-carbon engines. In order to create these jobs, Ford would have had to first assess the current work force and consider what job roles need to be filled. As this announcement was ‘opening 318 new jobs in October of this year’ (Article was written in 2014) Ford has been able to analyse their future workforce and consider if they are going to recruit internally or externally. Urwin is Ford of Europe’s chief operating officer she says the “biggest thing is to be flexible”. “It’s about having people who can deal with ambiguity,” she adds. “You never know what is going to happen. When I first started, you’d talk about this year being challenging and next year being less challenging. Now, the default is: it’s always going to be challenging. If it’s not political, it will be economical. If it’s not economical, it will be something else. Certainly the industry is changing, but the world is changing too.” She adds that when dealing with change, everything has to “start with the business”. “The only thing you can put a stake in the ground on is how the business is doing, not just now but in five years’ time,” she explains.

http://www.hrmagazine.co.uk/hr/features/1148829/driving-diversity-ford

Along with the Human Resource Planning Cycle there are internal planning factors such as:

• Organisational needs-includes demand for products, services, new products and services, new markets, technological change and location of production.
• Skills requirements
• Workforce profiles –Includes age, gender, ethnicity, disabilities etc.)

Businesses are always working towards meeting their business strategy whether this is to improve their customer service or increasing revenue by 15% in the next 3 months. However the business changes, the workforce need to adapt to these changes to make sure that business activity is consistent and that job roles are being completed.

One organisational change that Ford is currently experiencing is the Asian expansion. In 2014, Ford’s sales in China were up 26% year over year. That follows a 49% increase in 2013. Its increases have slowed a bit in the last couple of months, in part because China's overall market is slowing, but the Blue Oval is well positioned to grow sales significantly in coming years. Demand has been very strong, and Ford is still building the factories to supply this demand. Ford's Asian expansion effort is its biggest in decades, a nearly $5 billion investment in new factories and facilities in China, India, and other parts of the continent. Ford has opened six new factories in the region since 2012. Another four new factories are set to open over the next year or so. The company's goal has been to have a 6% share of China's market by the end of next year -- it is closing in on 5% now -- and those additional factories should help give it the needed volume. Because of this increase in demand from a growing economy, Ford’s HRM will need to consider recruiting more employees’ so that customer demands can be met. Also with the upcoming arrival of new factories, Ford’s HRM will need to plan for the on boarding of new recruits. Ford will need to decide whether they will recruit internally or externally. If they choose to recruit externally this means that the HRM department will need to assess the recruits’ current skills and also schedule a training period. Ford will also want to decide whether they will be recruiting new managers to lead the expansion, or recruit employees within their business that are already equipped with the needed knowledge and skills. Furthermore as 6 new factories have been opened, the HRM department will also need to organise departmental planning to ensure that departments within the new factories are working efficiently. Human Resources play a big part in a business and it does not end there, after the factories have been established and everything is working smoothly, the HRM at Ford will be required to assess and analyse the progress of that new factory.