Flashcards
Unit 2A- Topic eleven- Reducing labour costs
Cards in this deck (10)
- 1Businesses often come under pressure to reduce costs, they may face...-Falling demand for the product.
-Competitors that are cutting prices.
-Pressure from shareholders to increase profitability.
Some businesses will respond by cutting the labour force, investing in more capital equipment, looking towards a more capital intensive type of production or increase efficiency and cut unit costs. - 2Use of a flexible workforce-A flexible workforce can have two meanings:
-It can mean the business can quickly adapt to the changing demands of a dynamic market- flexible working.
-It can also mean that the workforce is able and willing to work odd or irregular hours on a full time basis- flexible employment. - 3Use of a flexible workforce: Flexible working-Likely that the workforce will be multi skilled and can adapt from one type of job to another without the need of retraining.
-Means that the business is likely to be able to hold a wider range of jobs and be more likely to find contracts.
-It can also mean that the workforce and management embrace change and are willing to try new ways and methods of working. This gives the business a more flexible approach. - 4Use of a flexible workforce: Flexible employment-By only employing staff when needed a business can reduce labour costs.
-Many people use seasonal staff or part time staff for this reason.
-When labour costs are reduced, profits increase.
-There is also the advantage that many staff may prefer to work on a flexible basis and this could result in a more contented and motivated workforce.
-This can mean increased productivity and less staff turnover which also reduces costs. It may also mean lower pay for some employees. - 5Flexible employment terms and definitions-Flexitime- flexitime employees choose, within agreed limits, when to start and end their working day.
-Homeworking- homeworking allows all or part of contracted hours to be worked from home.
-Annualised hours- annualised hours average out working time across the year so that a set number of hours are worked per year, more hours are worked in busy periods.
-Job share- a part time worker shares the duties and responsibilities of a full time worker with another part time worker.
-Staggered hours- allow employees to have different start, finish and break times so that the employer can have longer opening hours. Essentially a shift system.
-Zero hours contract- workers are only used when they are needed and there is no guarantee of any work at all. - 6Flexible employment: Advantages and disadvantagesAdvantages:
-Work/life balance improves for workforce, a happier workforce may be more motivated leading to higher productivity, easier/better recruitment as wider choice of applicants, homeworking means less costly office space needed, more women can find work fitting round school/childcare requirements, mote likely to retain skilled workers.
Disadvantages:
-Some like having regular hours, loss of team spirit and social needs if homeworking, can be insecure for workers, difficulty of managing home workers and monitoring performance, pay can be lower for part time workers than full time, not all workers can be motivated by flexible employment. - 7Staff dismissal-Employees may be dismissed if they are incapable of doing the job or if there has been misconduct. However they will be protected against unfair dismissal by employment law and the employer must follow the correct procedures:
-Establish the facts of each case and inform the employee of the problem.
-Hold a meeting with the employee to explain the problem.
-Decide on appropriate action.
-Provide employees with an opportunity to appeal. - 8RedundancyIn certain circumstances cutting the workforce may be the only way for the business to survive.
Changing economic or market conditions may mean redundancies are inevitable. Employees are protected by law, if they are made redundant the correct procedure must be followed. They must be consulted and they have a right to a statutory redundancy payment if they have worked continuously for employer for at least two years.
A business that has to make redundancies may look for volunteers rather than make someone go against their will, some employees may be looking to retire, be happy to retire early or take the redundancy pay and look for another job. - 9Voluntary labour turnoverAll businesses lose staff for reasons including retirement, illness, death, unsuitability, misconduct, seasonal changes or redundancy.
Voluntary labour turnover refers to employees who leave for other than these reasons. They resign voluntarily from their jobs. It is calculated by:
-Number of employees leaving/number of employees x100
Employers are concerned with minimising the level of voluntary turnover. - 10Coping with recessionSince 2008, there has been many redundancies as employers try to cope with falling demand. Employers have tried hard to keep skilled people who may be hard to replace if and when orders start to increase. Many employers have been prepared to go part time or to take a pay cut to keep the jobs they have. So despite a recession, labour turnover has been lower than expected.
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- A2 level Business unit 2A Flashcards on Unit 2A- Topic eleven- Reducing labour costs, created by han.smith98 on 02/06/2015.
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