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The business environment is ever changing leading changes in the functions of organizational functions. Thus, it is important for businesses as well as their leaders and managers fully understand these changes in the business environment and adapt to them in order to remain competitive. An example of a key organizational function that is often affected with changes in the business environment is human resources management, commonly abbreviated as HRM, which deals with human resources.
Human Resource and Human Resource Management
Dessler defines human resource management as the professional disciple and business function that deal with the management of human resources in an organization (13). Human resources management (HRM) focuses on activities relating to workers such as the selection, hiring, training and remuneration of workers. It was formerly referred to as personnel management. On the other hand, human resource (HR) refers to a set of individuals who constitute the workforce of an organization. The term may also be used to a set of individuals who make the workforce of an industry, a sector of the economy or the entire economy. According to Dessler, human resource is also sometimes referred to as human capital (13). However, Bratton argues that human capital often provides a narrow view of the workforce by referring to the knowledge and skills that the workforce possesses and their contributions to an organization or to the economy (24). Other terms that have been used to refer to human resource are manpower and labor. Over the recent past, newer terms such as talent and people have also been put into use to refer to human resource.
From the perspectives of human resource (HR) professionals and business organizations, workers are viewed as vital assets of the organization whose value can be improved through professional training and development programs. Consequently, almost all organizations engage in a wide range of human resources management practices that aim at enabling them to capitalize and maximize the value of their employees.
Human resource is affected by three major factors or trends in the business environment. The factors include demographics, diversity and skills and qualifications of workers. Demographics concern the characteristics of a given population. Examples of these characteristics include age, gender and socio-economic status among others. On the other hand, diversity refers to the variations in attributes of the population or the workforce. For example, the workforce may be varied with regards to differences caused by factors such as age, gender, race, sexual orientation and religion of workers. In addition, skills and qualifications refer to the abilities of members of a workforce to execute their duties and responsibilities effectively and efficiently. Skills and qualifications are usually measured based on the levels of education, training and expertise of the workforce. Other factors such as change in legislations and technological advancements also impact the practice of human resource management. Business stakeholders, legal, political, and social factors also have significant impacts on the management of human resources in an organization. Competition among qualified and competent workers is also a key issue in human resource management practice because organizations are scrambling for the most qualified and competent workers in the labor industry. As a consequence, organizations have been forced to source, hire, train, and develop and reward their employees in appropriate manners to ensure low rates of employee turnover and to reduce the costs associated with the management of human resources.
An Encounter with a HR Professional
In an interview with the Human Resource Director of MassMutual Financial Group, a subsidiary of the Massachusetts Mutual Life Insurance Company, at their New Jersey local office, the following issues were identified as pertinent to human resource.
First and foremost, the HR Director identified the Patient Protection and Affordable Care Act (PPACA), usually referred to as Affordable Care Act (ACA) or simply Obamacare, is one of the major current issues that he believes greatly impacts human resource and its management in organizations across the country. Obamacare is a statue of that led to the creation of a new health care system in the United States of America. It was signed into law by the U.S. President Barrack Obama. Its main goal was to make a considerable overhaul of the U.S. healthcare system by promoting the provision of high quality and affordable health care insurance. The statute lowers rate of the uninsured by expanding public and private insurance coverage. Also, it strives to reduce the costs of healthcare for individuals and the government (Grobler 149).
The Obamacare system requires companies to provide insurance for all employees hence increasing costs of health insurance for employers. Employers with more than fifty full-time workers are required to provide affordable health plans for their workers or face penalties of up to two-thousand dollars per employee. The Obamacare also requires employers to reward their employees better to enable them participate in wellness programs designed to improve their health statuses. Adaptation by organizations has also led to the increase in insurance costs because of new insurance standards.
The HR Director claimed that complying with the requirements of the Obamacare has been a great challenge to many organizations, and HR professionals in particular. Organizations have been forced to find creative ways of reducing costs associated with workers, and reducing the size of the workforce is one of them. Many organizations have developed mew plans to reduce the number of their workers as a countermeasure to the Act. It has led to the loss of hundreds of jobs hundreds. Companies have shrunk their workforces.
Secondly, when I asked the director about what he thinks he would face in the next five years, he asserted that the high cost of health insurance was his major concern. The cost of health insurance has become a key focus for organizations and will continue to worry many employers. He asserted that although many organizations are striving to manage costs associated with workers and to provide comprehensive benefits to workers, most are not aware of what would come next. Also, they are not excited about the new health care system. For example, employers with large number of hourly workers such as retailers and restaurant chains are busy crafting ways of reducing costs associated with adoption of the new health care system (Obamacare) by cutting hours for full-time employees in order to avoid penalties for non-compliance. The director also asserted that many other companies are likely to follow suit by restructuring their workforce strategies, policies and programs, for instance, by creating more part-time jobs and reducing full-time jobs. In his view, both small and large businesses would be eventually strongly affected by the skyrocketing costs of health insurance.
In my view, human resources are a critical component of any organization or business. Therefore, HR professionals should develop and implement suitable strategies for managing human resources of the organization. For example, HR professionals must ensure that the policies and HRM practices in their organizations fully comply with labor laws and other related legislations. Also, they should advocate for organizational characteristics that promote HR management because the characteristics of a business such as its organizational culture also have significant impacts on its human resource. For instance, an organization with a suitable leadership can create a motivational work environment conducive for improved performance and productivity of the workforce. Similarly, a financially stable organization would pay its workers well hence experience lower rates of employee turnover hence enabling it to retain a large number of workers for longer periods.
Although it is often challenging to keep abreast with changes in the business environment, businesses should strive to adapt to those changes by developing and implementing appropriate countermeasures. Businesses organizations should be responsive and proactive to changes in the business environment.