Cost of labour
The cost of labour is a percentage of the other cost within a company. The cost of labour depends on whether an organisational is labour or capital intensive, as well as the dimension to which the skills needed by that business are available and accessible. Labour costs are associated with international labour, in terms of wage levels and training. However, the levels of labour needed for a company to operate also has consequences. The minimum wage means that employers must pay their employees a certain amount of money per hour. They must not pay less. Human resource pkanning includes allowances for increases to the minimum wage, which happens once in a while. Government policy
Government policy impacts on the external factors influencing human resource planning. The introduction of policies for work, education and training has consequences for the number of potential workers available, as well as their ability and skills levels when finish education. With the Education and Skills Act 2008 instituted some changes to the way that students between 14-19 years old are educated. However, Democrat coalition government came into power in 2010 which leaded to a number of Labour’s education rearrange plans were either abandoned or changed. Government work with leading employers and universities to determine skills gaps and areas for improvements on the workplace, change in focus on education as a result of changes in legislature can have an impact on the long-term availability of skills.
An internal factor could be organisational needs. If an organisation changes, then the need for employees will increase or decrease. For example, the demand for a product or a service will have an influence on the amount of employees required. Companies will have to plan for the release of new products and determine whether they need to employ more staff. Organisations make changes either by contracting or expanding the number of employees. Contracting employees means a reduction in the number of employees whether expanding employees means an increase in the number of employees.
If companies have made changes and the products and services require high demand by customers then companies would have to hire more employees. Before a company hires people, the business has to look at what skills they require to carry out the job. If a company needs employees to carry out the jobs, then the company is labour intensive. When a company needs more machinery to meet the demands of customers, then the business is capital intensive. Companies constantly change and their human resource department needs to be able to adapt too. The demand for products and services affects the number of employees needed in certain jobs. Skills requirement:
It is important for organisations to assess the skills of the current workforce as it is an essential part of human resource planning. It enables the company to build up profiles of training, experience and qualifications that employees already have. This is important whether the company is labour intensive or capital intensive. Not only the type of work changes within organisations, but also the skills requirements change. Companies must measure the skill levels of its workforce in order to plan for future training or recruitment of employees that may be needed to be done. Companies that have quick changes in demand of products or services or technological change may need to plan for the next few months. The longer the changes for order, the longer they have to plan for the long term. A business is capital intensive when there is much machinery involved in the production process. On the other hand, a business could also be labour intensive when the company invests a lot in people in the production process.