Page 2: Human Resource Management (HRM)
The key function of Human Resource Management (HRM) is to ensure a business has the right number of employees with the skills and qualifications required to meet current and future needs. This is known as workforce planning. Employees are normally the largest cost to a business, so it is essential that the HRM function measures productivity, absenteeism and employee turnover to monitor the effectiveness and efficiency of human resources.
A business needs to be flexible in order to meet the demands of the changing and competitive environments in which it trades. Therefore, the HRM function must ensure that the workforce is able to adapt to these changes effectively.
A growing business like Nestlé needs to regularly take on new staff in order to create a pipeline of talent for the future, and keep key skills and knowledge within the business as older employees retire. An ageing workforce is a particular challenge for Nestlé, as over 50% of its entire workforce, from across a variety of areas within the business, are due to retire within the next 15 years.
Before recruiting any new staff, an analysis of the job is undertaken. Job analysis is a process which identifies the tasks required from the role, and what skills, strengths and training are required to perform the job effectively. The information obtained through the job analysis is used to advertise the vacancy. Vacancies are filled through internal or external recruitment. Internal recruitment involves recruiting someone who currently works within the business. The main advantage of internal recruitment is the reduced cost, as the recruitment process is shorter and so less expensive. Another benefit is that the individual is already familiar with and within the business. A problem recruiting internally is that the internal promotion leaves a vacancy to be filled. External recruitment is when a business recruits someone from outside the company. This has the potential to bring new ideas and experience into the company. It can be an expensive process as individuals recruited externally need a longer induction into the company.
When looking to recruit young talent, Nestlé adopted a radical recruitment shift to strengths based recruitment; this enabled them to more easily differentiate between candidates with limited experience by focusing on their potential instead. This means that its roles are analysed and advertised in terms of the strengths required for the job, not competencies. The differences between the two styles of interviewing are shown in the table to the right.