Scenic Treasures Limited Business Strategy - Case Study Example

Labor and Demand Student`s Name Institutional Affiliation Labor and Demand Introduction The human resource function is an essential resource for the execution of Scenic Treasures Limited business strategy. It helps the organization accomplish its set objectives and aspirations. Human resource strategy and planning are part of the human resource process that is designed to help Scenic Treasures achieve the organizational goals and strategy. One of the roles of human resource department is the development of a workforce plan (Werner & DeSimone, 2012). It ensures that the company has an efficient and competent workforce that will help the firm meet the current, as well as the future needs. The other crucial role is the establishment and implementation of policies that controls the operations of the organization. A report released by the Australian Human Resources Institute argues that the majority of the organizations are faced with the issues of labor demand and supply. It also argues that the government is doing less to address these problems (Robert, 2012). The primary aim of this paper is to outline the issues that I believe are influencing labor demand and supply of Scenic Treasures Limited. In addition, the paper identifies some forms of information and data that the company needs to ensure that these issues are accurately understood. Labor Demands The term Labor demand means the need for workers in a certain market segment. Numerous labor indicators help access the market and forecast on the business growth. They include job advertisements, vacancies, and business surveys among others. In Australia, the Australian Bureau of Statistics (ABS) conducts business surveys including issuing information on labor demand (Paludi, 2012). Recently, the ABS agency released a report arguing that Australia is experiencing a decrease in the number of indicators and employment growth has subdued. It proves that these signs play a significant role in fostering employment growth. Scenic Treasures Limited engages in numerous activities during hiring of new employees in order to select the best candidates for the job. Jobs also vary according to the experiences, qualification, ability and skills needed (Bandt & Haines, 2012). Further, there are costs associated with the hiring process. At equilibrium, the marginal product and revenue are equal, and anything that alters these variables will move the curve thus affecting the demand for labor. One of the factors influencing energy demand in the organization is seasonal periods. The tourism sector has high, peak as well as low seasons. Demand for labor is always high during peak and high seasons. It is easy to forecast these periods in the future because each has a particular time that it occurs (Rothwell et al., 2010). The management of this company employs additional casual workers during these periods to meet the rising demand of the business. The casual workers work together with the permanent members in order to cater to the changing needs of the enterprise. The company reports show that over 15% of the casual workforce is required during peak, and 9% required during the high periods. In accordance with the Australian Bureau of Statistics (ABS), the casual workforce is at the rate of 25%. It means that the firm employs fewer casuals as compared to the threshold rate required (Bandt & Haines, 2012). More than 80% of all the employees at Scenic are contracted on a permanent basis. It means that they enjoy the privileges and benefits that are provided in the laws governing employment contracts. The company has numerous benefits that it derives from the employees. Workers are also provided with opportunities for career advancement and growth. The advantages and terms of employment ensure that workers are satisfied and motivated in order to increase productivity (Werner & DeSimone, 2012). The company report shows that in the previous year, only 3% of the workers left the organization. It is an indication of low labor turnover in the body. The ABS argues that a rate of over 8% workforce turnover represents an unstable workforce. The firm rate is below this rate suggesting a stable workforce. The other factor that influence demand for labor at Scenic Treasures Limited is the macroeconomic performance. Research demonstrates that Australia has experienced an economic growth for the last half decade with an increase of approximately 3% per annum (Stone, 2013). However, in the recent past, the country has been faced with a number of internal and external factors that has adversely affected the labor demand. These factors include a housing boom, droughts, terrorism attacks, increase in oil prices and natural disasters among others. These issues affected Scenic Treasures as well as the entire country leading to slow economic growth and higher inflation rate. Currently, there are improvements as compared to the past. Further studies argue that in the future, Australia will continue experiencing an economic growth (Bandt & Haines, 2012). The application of fiscal policy strategy has been of great help because it enables the company maintain economic stability by promoting private investment. Experts suggest that structural factors best help explain the macroeconomic performance. The organization is engaged in reforms to the services and labor markets. Studies suggest that these reforms are of significant in the long-term (Robert, 2012). They also argue that improvements act as an important model for forecasting labor demand. The firm will be in a position increase the outputs, reduce the rate of unemployment as well as overcoming the macroeconomic issues. Leaders should implement the structural policies that will enable the firm reduce operational costs in order to establish reform processes. Labor Supply Labor supply is a term used to describe the amount of hours that an individual is able and willing to work at a given compensation rate. The labor supply curve slopes upwards meaning that as the wage rate increases, the higher the rewards (Stone, 2013). The ABS demonstrates the need to recruit and employ competent workers who will help the firm achieve the set goals as well as adhere to the government rules and regulations established. It is also of great importance to analyze labor supply to identify the issues that are likely to affect the business. Some of the external issues that the firm faces are inability to recruit skilled and experienced staff members for the correct job. At times, the human resource may hire people at the wrong time leading to waste of firm`s resources (Werner & DeSimone, 2012). It may include employing more people during low season. On the other hand, one of the internal problems experienced by Scenic Limited is inability to retain experienced workers. One of the issues affecting Scenic Treasures is the comparative attractiveness of professional jobs. Some jobs provide better working conditions as compared to others. It means that some of the employees are willing to quit a particular occupation and join the fields offering higher wages and with favorable working conditions (Luoma, 2011). For instance, some people regard tourism as one of the best paying jobs due to the nature of work. They assume that dealing with clients from all over the world provides one with an opportunity to interact and learn more. Scenic Treasures has employed numerous people from other professionals who say that they were initially in other filed but were forced to undertake tourism courses due to the availability of opportunities. It moves the supply curve to the right (Cahuc & Zylberberg, 2014). However, this change leads to a decrease in the remuneration. Likewise, a reduction in wages in the tourism sector leads to shifting of employees. Workers quit tourism for other professional leading to higher wages. Government regulations are other issues that affect the supply of labor. The government has introduced additional requirements for individuals who want to work as tour agents leading to a decrease in the number of registered tour agency operators. It leads to an increase in salaries as the curve shifts to the left. Contrary, reducing these qualification requirements results in low wages. The scenario of labor supply helps outline some of the reasons for the existence of higher paying professionals than others. It also enables work to be different in various market segments based on the experiences and skills required (Rothwell et al., 2010). For instance, it allows workers in a hotel and nursing practitioners not to compete in the same segment. Professional jobs pay higher salaries due to specialized training involved. The skills required in the tourism sector limit the supply of professional. The demand for tour operators is in high demand, but the restriction imposed by the government restricts the number of agents. The government should develop laws and regulations that ensure that only enough practitioners are in the field (Bandt & Haines, 2012). Lack of skilled people in the organization is an issue affecting Scenic Treasures Limited. More than 60% of the organization`s workforce comprise of the older generation, and the number of retiring staff leaves the firm with inexperienced younger generation (Freyens, 2010). The issue needs careful assessment because the old workers hold some of the major positions in the company. In a circumstance where these people retire, the young are forced to take up responsibilities that are new to them leading to increased inefficiencies. A report by the ABS argued that over 70% of the whole workforce in Australia would retire in the next five years. Further, the report outlines this is a national issue that requires careful consideration. It is of importance to planning to address such questions. One of the models that prove relevant in such a case is analyzing the demographic data (Freyens, 2010). It will help scrutinize the past, current and future patterns of the different demographic components. It is achieved using the trend projection approaches. Human Resource Strategies There are numerous strategies that the management of Scenic Treasures has developed to address the issues related to labor supply. On the issue of comparativeness attractiveness of jobs, the company has established policies that ensure that the workers are compensated well in order to retain them (Luoma, 2011). The firm offers competitive salaries that help retain and even attract more employees from other professionals. Recently, the government implemented laws that have favored the tourism sector. The requirements have been brought to a considerable rate. It will help ensure that only sufficient players exist in the market (Nankervis et al., 2011). Further, Tourism department increased the number of graduates per year in order to address issues of skills shortages. The ABS suggests that all the managers and leaders in these institutions should enroll in leadership and mentor programs to acquire the necessary skills and knowledge. It will enable then make informed decisions and develop problem-solving skills (Nankervis et al., 2011). Recently, the organization gave the younger graduates higher positions to prove their capabilities. The older generation provides training in order to bridge the gap once they have retired. Competency model is another solution to the issue of unskilled personnel in the organization (Paludi, 2012). It enables the company to develop a concrete plan that helps address such questions. The competency model brings together various successful elements in the workplace. It is one of the human resource functions adopted by Scenic Treasures during hiring, training as well as performance management. Information for Labor Demand There is information and data that an organization can adopt to ensure that labor demands are accurately understood. Environmental scanning is one of the important tools that help an organization understand the current and future demands of work. Information gathered from the macroeconomic performance and seasonal periods are important in scenario planning (Cahuc & Zylberberg, 2014). The documented data on the past performance on economic growth will help forecast the future. Studies suggest that the economic growth in the past grew by 3% annually. The economy was slowed down due to factors such as drought and terrorism. The information is sufficient because it helps understand that addressing these issues will lead to a future economic growth. Further, issues such as seasonal periods in the tourism sector in a source of information to the firm. It enables the company to understand when to employ additional employees (Paludi, 2012). The organization also can rely on such information for business expansion and investment decisions among others. Information for Labor Supply To comprehend the type of information and data needed to address the supply of demand at workplace, it necessary for the organization to compare the rates of similar fields. It helps the human resource team to offer competing rates that assist in addressing the comparative attractiveness of professional jobs (Werner & DeSimone, 2012). It will bring the rate of employees leaving the company to other firms to lower levels. It is also important to conduct interviews with the leaving employees in order to identify the reasons why the left. It acts as a guide for the management in addressing these issues from happening in the future. The other relevant information is analyzing the demographics elements. Having information about the composition of the employees is a sufficient tool for addressing issues related to lack of a skilled workforce (Freyens, 2010). It stores data related to their ages, gender, skills, ethnicity, and competency among others. The human resource department will be in a position to identify the retiring staff and ensure that competent personnel are ready to fill these positions. The skills gap such as limited pipeline and technological changes are brought down to manageable levels. Conclusion The labor market determines the demand and supply of labor. Organizations and employees are the primary players in the market. It is because workers provide labor while organizations offer wages in return. An increase in firm`s output requires more workers leading to a rise in demand for labor and vice versa. The human resource strategy and planning are part of the human resource process that is designed to help Scenic Treasures achieve the organizational goals and strategy. One of the roles of human resource department is the development of a workforce plan. It ensures that the company has an efficient and competent workforce that will help the firm meet the current as well as the future needs (Robert, 2012). The other crucial role is the establishment and implementation of policies that controls the operations of the organization. Reference Bandt, A., & Haines, S. G. (2012). Successful strategic human resource planning. San Diego, CA: Centre for Strategic Management. Cahuc, P., & Zylberberg, A. (2014). Labor economics. Cambridge, Mass. [u.a.: MIT Press. Freyens, B. P. (2010). Managing skill shortages in the Australian public sector: Issues and Perspectives. Asia Pacific Journal of Human Resources, December 2010 vol. 48 no. 3 262-286, doi: 10.1177/1038411110368468 http://search.proquest.com.ezproxy.une.edu.au/docview/214829749?accountid=17227 Luoma, M. (2011). Investigating the link between strategy and HRD. Personnel Review, 29(6), 769-790. Retrieved from Nankervis, A R. & Compton, R. L. & Baird, M. (2011). Human Resource Planning in a Changing Environment'. In : Human resource management : strategies & processes /Alan Nankervis, Robert Compton, Marian Baird. 7th ed. South Melbourne, Vic. :Cengage Learning, ©2011. Chapter 4, pp. 119-161 Paludi, M. A. (2012). Managing diversity in today's workplace: Strategies for employees and employers. Santa Barbara, Calif: ABC-CLIO. Robert, G. G. (2012). Attracting people. Recruitment and selection. Gareth Roberts. 2nd Ed, London: Chartered Institute of Personnel and Development. Rothwell, W. J., Prescott, R. K., & Taylor, M. W. (2010). Human resource transformation: Demonstrating strategic leadership in the face of future trends. Mountain View, Calif: Davies-Black Pub. Stone, R. J. (2013). Human resource planning. Human resource management. Raymond J. Stone. 6th ed. Milton, Qld: John Wiley & Sons Australia, 2013. Chapter 2, pp. 52-84 Werner, J. M., & DeSimone, R. L. (2012). Human resource development. Mason OH: South- Western Cengage Learning. Read More