Company Background
This report aims to explain the major challenges faced by the management of the Arrow Energy Holdings Pty Ltd. In this report, it gives the detailed understanding of the various issues and problems faced by the HRM managers at the time of recruitment in the company. Moreover, it is identified from the analysis that demographic issues, organization image, and diversity increase the cost and decreases the productivity of the company. Furthermore, it also gives the insightful ways and recommendations to overcome these problems. Effective employer branding and advertising are the best methods to overcome these challenges.
Arrow Energy is founded in the year 1997 and it is a subsidiary of the Bow operations Pty Ltd and it provides the energy resources in Australia. It was founded in 1997 in Brisbane, Australia. The company engages in integrated coal seam gas (CSG) company, engages in the exploration, development, production and supply of CSG. Its exploration capacity covers 21,000 squares kilometers. The company has operations in five CSG fields located in the Bowen and Surat basis in central and Southern Queensland (Bloomberg, 2017). The company has the matrix structure functional level. The HRM department of the company is faced many challenges from past years in its recruitment process. There are many factors which influence the company’s recruitment process which is discussed in detail further. Before this, it is important to know the concept of HRM which is discussed below.
Human resource management is an important function of any organization which aligns employees to accomplish the strategic objectives of the organization. It basically focuses on the management of the people within the company and focuses on policies and systems. It focuses on the employee’s concern and delivers the overall company’s objectives. Arrow energy has approximately 1000 employees and the company’s HRM department is responsible for managing recruitment and selections in the company (SHG, 2017). The main objective of the company is to meeting customer expectations and delivers best services in their respective areas. To meet this objectives company’s HRM department needs to recruit and select skilled engineers so that they provides the best services to its customers and align with the organizational objectives. Below given are the key factors that influence workforce planning of the employees (Rao, 2014).
1) Labour supply/demand: It is an important factor that influences the workforce planning for Arrow Energy. At Arrow Energy, the requirement of the employees is based on two different demands. Firstly, the contract customers that have the service level agreement for few years and other customers who are temporarily associated with the company and call off when there is a specific need. On the basis of this situation, the demands of skilled engineers are increased in the past recent years and the company requires more staff to recruit. The company has limited number of qualified engineers who handled the customers (Entrepreneur, 2017). Moreover, they also retire in coming months or years. It means that the demand for the skilled labor rises.
Meaning of HRM and major challenges faced by the Arrow Energy
The supply of the skilled engineers is less in the market due to competition. Moreover, the other company recruits the engineers offers good compensation, benefits, and other flexibilities. Moreover, the unemployment rate of the country is 4.8% in 2016 which is reduced from 2015 i.e. 5.5%.It indicates that the economy is growing good and companies are creating more jobs to attract the skilled labor with attractive packages (The HR Observer, 2017). The competition is also high in the market which influences the HRM policies of the Arrow Energy. The other companies have the flexible recruitment policies which attracts the candidates like flexible work timings offered by companies to employees, good work life balance, and overtime incentives.
2) Organization image: The image of the employer in the market is the crucial factor to attract the employees significantly. Arrow Energy is already a brand name in their particular industry. But the competition and decrease in labor supply in the market is the major concern for the company’s management to attract and retain the employees Stredwick (2013, p. 28). Most of the skilled engineers are attracted to other organizations due to emerging reputation in the area of this particular sector. The key competitors of the company are Scottish and Southern, EON and Npower (Brewster, et al., 2016, p. 34). These competitors maintain the good public image and providing good services to their internal and external stakeholders. Moreover, they offer better remuneration, work environment and good career advancement opportunities to engineers as compared to Arrow Energy.
3) Demographic issues: The Demographic factors are related to the attributes of the potential employees like their age, diversity, generation gap, and gender and literacy level. Due to tight competition in the market, the company requires the active and determined workforce to accomplish the overall objectives of the company Hoque (2013, p. 28). But due to increase in ageing population in the company the company faces the problem to recruit young professionals with the same designation on better packages. The engineers who already associated with the company working with several years generate equal outcomes as compared to young talented professionals in the market. The young professionals are easily adapted to any environment of the company as compared to old employees (Knowles, et al., 2014). This factor increases the cost and decreases the revenue of the company. There are other challenges like it increase training and development cost of the company due to the high ageing population because the company `needs to spend more to develop and train the employees regarding their respective areas.
Labour supply/demand
Moreover, they cannot easily adapt to the changing environment. It also increases the insurance and health costs as compared to younger employees. Moreover, diversity also impacts the company’s recruitment process of the Arrow Energy. The company needs to recruit diverse engineering workforce due to diverse customer base as this company is present in many countries like Europe, UK, and Africa. The company faces the problem to manage diverse customers. The company faces the communication issues sometimes to tackle the customers and the company needs to spend a lot of money on employees to manage a diverse workforce and its issues (Gatewood, et al., 2015). Moreover, the company also faces the discrimination issues sometimes at the workplace to solve any conflicts and problem. As a gas company, the proportion of male candidates is more so it would be difficult for employees to handle female customers at the time of any issues due to lack of female members in the company. The main challenge for the human resources managers is how to provide the role of leadership and feedback to all the employees of the company through understanding what actually motivates individual employee at the diverse workplace Kern (2014, p. 37).
4) Employee Retention: the company faces the challenge of retaining good employees in the organization. Most of the talented and skilled employees attract towards better packages and leave the company which reduces the productivity of the company and decreases the morale of the other employees. The employees turnover challenge is costly for the company. The high employee turnover ratio is the questionable mark for the companies regarding its strategies, environment, monetary and non-monetary benefits are not well so that the employees leaves the company at faster rates Bamberger, Biron, and Meshoulam (2014, p. 18).
5) Compensations: The company faces the challenges of compensation bands offered to the freshers are not accepted by most of the times. Due to tough competition and low supply of labor, the companies’ offers good packages to the skilled employees. Apart from high packages, the companies provide the lucrative incentives, flexibilities, and good half yearly bonuses to remain in the company. The HRM personnel faced the problem of compensation and benefits for temporary employees (Sparrow, Brewster and Chung, 2016). They easily get the better packages from the competitors in the market. The company cannot retain the temporary employees on the basis of the compensation and other benefits.
6) Trade union issues: Union members have generally opposed the company’s policies and procedures. The HRM personnel need to handle skillfully to match the needs and demands of the trade union with companies policies. Sometimes, it is the problem for the HRM managers to accept the conditions of the union members significantly. They generally demand the high payout and facilities regarding their nature of work. The company did not meet the expectations of the demands of the union which results in lockout and strikes which lead to the loss of the production hours that ultimately results in the decrease of overall productivity of the employees (Renwick, Redman and Maguire, 2013).
Organization image
These above lists are the basic challenges faced by the Arrow Energy Holdings Pty Ltd regarding the recruitment process. To address these challenges company framed the strategy to overcome these challenges.
The company needs to focus on the internal recruitments more at the time of demand and supply of labor shortages. The company needs to promote their jobs vacancies in the company at their careers section of the website portal. After post the job on portal, the management needs to encourage senior and experienced employees to apply for the challenging jobs. With this strategy, the employees also find the new opportunity and company’s training and development cost is also reduced as compared to external hiring’s. This strategy helps the company to reduce the attrition rate of the company by giving new roles and responsibilities to the employees through better compensation and other benefits. Moreover, it also increases the motivational level of the employees and they become more productive and focus towards their respective job responsibilities.
The company can use the branding strategy in their recruitment process to attract the most of the employees significantly. The company should clearly communicate its mission or values to the all functional levels of the company and align the goals and objectives with company’s mission so that the employees effectively understand the importance of the company’s operations. Moreover, the HRM manager also promotes its culture before the recruitment process. The employer should display the pictures and notes of the company in the interviewer room at the time of interview. The picture and hoardings reflect the cultural values and environment of the company which creates the positive image in the eyes of the employee during an interview. Moreover, after the interview, the company needs to offer competitive packages to the employees as per the market condition.
Moreover, the HRM personnel exhibit the incentives, bonus and other benefits to the skilled employees so that they can attract towards the company and will work for the longer period of time. Nowadays, every employee needs that their employer invests in their growth and development, training and they are hungry for skills and training, great culture and good work life balance Delahaye (2015, p. 17). So the company must provide the good work life balance and flexible culture to their employees so that they remain motivated and work effectively in their respective areas. It decreases the attrition rate and reduced conflicts and better employee engagement at the workplace. The employer can use the various channels of advertising to promote its company below given figure indicated the survey of employer branding trend by the companies which indicated that the different types of advertising sources are appropriate for employer branding that clearly communicates the benefits, culture, values, compensation and work-life balances
Demographic issues
Source: (Aswathappa, 2013)
As per the above figure, it indicated that social media is a viable platform to promote their company. The company’s management should create the accounts on social sites and promotes their jobs effectively. The effective branding strategy helps the company to better employee engagement, higher chances of job acceptance, easier to attract the candidates and reduced recruitment costs.
Conclusion
As per the above report, it is concluded that Arrow Energy Holdings Pty Ltd is faced many challenges in its recruitment process. Moreover, it also identified that demand and supply of labor, organizational image, and demographic issues affect the costs and productivity of the company significantly. Furthermore, it is also explained that effective advertisement and branding strategies help to reduce the attrition rate, employee engagement, motivation level and recruitment costs of the company in the long term.
References
Aswathappa, K. (2013). Human resource management: Text and cases. Nevada, USA: Tata McGraw-Hill Education.
Bamberger, P. A., Biron, M., & Meshoulam, I. (2014). Human resource strategy: Formulation, implementation, and impact.London,UK: Routledge.
Bloomberg (2017) Company Overview of Arrow Energy Holdings Pty Ltd. Retrieved from https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=7687729
Brewster, C., Mayrhofer, W., & Morley, M. (Eds.). (2016). New Challenges for European Resource Management.Frankfurt, Germany: Springer.
Delahaye, B. (2015). Human resource development. Manchester, UK: Tilde Publishing.
Entrepreneur (2017) How Employer Branding Can Help Your Company Be Perceived As A Great Place To Work. Retrieved from https://www.entrepreneur.com/article/279227
Gatewood, R., Feild, H. S., & Barrick, M. (2015). Human resource selection.Bristol,UK: Nelson Education.
Hoque, K. (2013). Human resource management in the hotel industry: Strategy, innovation and performance. London, UK: Routledge.
Kern, R. (2014). Introduction. In Dynamic Quality Management for Cloud Labor Services (pp. 3- 7).Frankfurt, Germany: Springer International Publishing.
Knowles, M. S., Holton III, E. F., & Swanson, R. A. (2014). The adult learner: The definitive classic in adult education and human resource development.London,UK: Routledge.
Nickson, D. (2013). Human resource management for hospitality, tourism and events. London, UK: Routledge.
Rao, T. V. (2014). HRD audit: Evaluating the human resource function for business improvement. Leeds, UK: SAGE Publications.
Renwick, D. W., Redman, T., & Maguire, S. (2013). Green human resource management: A review and research agenda. International Journal of Management Reviews, 15(1), 1-14.
SHG (2017) HR Management Guide. Retrieved from https://www.simplehrguide.com/internal- recruitment-strategy.html
Sparrow, P., Brewster, C., & Chung, C. (2016). Globalizing human resource management.London, UK: Routledge.
Stredwick, J. (2013). An introduction to human resource management. London, UK: Routledge.
The HR Observer (2017) How Employer Branding Can Help Modern Recruiting? Retrieved from https://www.thehrobserver.com/how-employer-branding-can-help-modern-recruiting/
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