CASE 8 - HR Strategy and Planning, Ethics and Outsourcing

In this post for the blog, I will talk about what is the role of strategy and planning in human resource management. I will also cover ethics and outsourcing issues.

To maintain an effective Human Resources function, it need careful planning and building a strategy to rely on along the way. According to Mikko Luoma, the HR strategy should be drawn from the business strategy itself. And eventually, the HR strategy becomes an important part of the overall business strategy.

The HR strategy includes for instance general HRM decisions and priorities, development of the HR function, clarifying business strategy, creating competitive edge in business. 




Outsourcing HR function(s)

As a part of a Human Resources strategy, outsourcing can be one option to make the operations of a business more effective. When considering outsourcing the HR function in an organizations, there are both advantages and disadvantages that needs to be considered before making decisions.

According to Personnel Today´s article on HR outsourcing (HRO) - an in-dept guide, outsourcing the HR functions is an obvious candidate to outsourcing because it is a non-profit function of a business, so there is less financial risks involved in the outsourcing. Outsourcing this function can be done partially or by outsourcing the function as a whole. 

Some risks involved could be:
-loss of control and flexibility
-impact on the employer/employee relationship

-failure to deliver cost-effectiveness or benefits
-legal or regulatory requirements

Some benefits involved in outsourcing HR function(s):
-when freeing HR employees from the function, they can bring more value to other business functions instead
-reduces costs and increases efficiency
-access to HR expertise not available internally
-increase flexibility and speed of response

The possible risks and advantages of course depend on the individual cases and outsourcing should be considered carefully before taking action.

Also, considering a HR consultant is an option if a business wants to develop their HR function. According to Advisory HQ´s article "7 best Firms for HR Consulting, 2018 Ranking", the best HR consulting firms focuses mainly on employee healthcare and benefits, overall human capital including incentives and rewards, when merge or acquisition takes place and outsourcing HR function(s).

8A case

The case 8A told about a situation where child refugees in Turkey has been manufacturing clothing for companies like Marks & Spencer, Mango, Zara and Asos with under than the minimum wage. BBC undercover investigation interviewed the refugees at the factories, and one told them "If anything happens to a Syrian, they will throw him away like a piece of cloth." A spokesperson for Marks & Spencer stated that ethical trading is fundamental for the business and they will not tolerate such practices found in Turkey. BBC reporter spoke to many Syrian workers in Turkey factories, and states that the workers know they are being exploited but can do nothing about it. (BBC, 2016.)

In a clothing factory

A spokesperson for Mango says that a factory in Turkey was operating as a sub-contractor without Mango´s knowledge. Zara´s parent company also said that they conduct inspections on their factories and had found significant non-compliance in audit and gave the factory six months time to make necessary improvements. (BBC, 2016.)

I have heard and read before about cases like this in the fashion industry, so this was no new to me. My own theory in this problem manufacturing clothing in developing countries etc. is that even thought businesses like Mango or Zara try to monitor and audit their factories, the local factory supervisors or middlemen can work suspiciously without the business itself knowing about this. 
Even if fashion companies have responsibility to know where and who made their products and under what conditions, if might be so that it is not possible for them to know everything if for instance, the local factory owners or supervisors have illegal actions against the contractors orders. But since these kind of problems have occurred for a long time specially in this industry, the companies are aware that this kind of unethical working conditions in reality and if they can do nothing about it, they should consider manufacturing their products elsewhere. 



Sources:

Case 8A: https://www.bbc.com/news/business-37716463. Accessed 13.11.2018.
https://www.personneltoday.com/hr/hr-outsourcing-hro-an-in-depth-guide/. Accessed 13.11.2018.
Picture 1: https://fr.123rf.com/photo_38515195_concept-coop%C3%A9ration-et-de-partenariat-%C3%89quipement-travail-d-%C3%A9quipe-team-group.html. Accessed 13.11.2018.
Picture 2: https://www.hradvisors.com/hr-advisors-inc/5-benefits-working-hr-consultant-grow-business
Picture 3: https://inhabitat.com/ecouterre/bbc-expose-reveals-child-refugees-making-clothes-for-british-high-street/. Accessed 13.11.2018.