Module 3: Managing Human Resources

Human Resources

Human Resources (HR) is the term that encompasses everything to do with the people who work in a business. HR is an extremely important factor in the success (or failure) of businesses, so effective human resource management is essential.

Human Resources as a factor of production

Labour is seen as one of the factors of production, along with land, capital, and enterprise. These are the 4 things any business must have. Labour is the work people do to create products or provide a service, e.g. a nurse working in a hospital and an engineer working in a factory are examples of labour.

Labour market analysis

Labour market analysis involves looking at figures collected by various agencies such as the Office for National Statistics (the United Kingdom's main source of statistics) or the Government. This data enables the human resources department to build a picture of labour market trends in the country that can, in turn, influence their planning.

Pause for thought

Follow the link to the latest Welsh Government Labour Market Overview statistics in Wales.

Make sure that you look at the latest information.

Labour market overview

Approximately what percentage of people were employed in Wales in the last quarter of data?

How does Wales’ employment rate compare to that of the UK as a whole?

How would this information be of use to the human resources department of a business intending to set up in Wales?

Forecasting labour demand

An important part of the role of a human resources department is to predict how many employees the company will need in the future. They therefore keep a close eye on measures such as labour turnover and are included in any discussions about the future plans of an organisation. For example, plans such as expanding operations are likely to require more staff to carry out the work and they will need to know where, how many, what type and when these staff will be needed.

Sources of information available to conduct labour market analysis

We have already mentioned the Welsh Government and the Office for National Statistics as sources of information but there are other sources that businesses can use for the UK and internationally.

Click on the name of the organisation to follow a link to their website:

UK Government: Department for Business and Trade

UK Government: Department for Work and Pensions

Institute for Fiscal Studies (IFS)

International Labour Organization (ILO)

Organisation for Economic Co-operation and Development (OECD)

Impact of globalisation on human resource planning

When businesses work on a global scale, different cultures will need to be considered when planning human resources. An awareness of equality, diversity and inclusion in recruitment will also be necessary.

People may be working all over the world. Technology means people do not have to be in the same country as the business they work for. Teams can communicate through technologies such as Zoom and Teams as well as accessing documentation etc in the cloud.