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HR (1 Viewer)

Yusra366

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hey guys was wondering if anyone knows how to answer this q:
How can a business reduce its HR costs to increase its competitive edge? (4m)
you have to relate it to the strategy of "Global – costs, skills, supply"
 

jimmysmith560

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With respect to the "Global – costs, skills, supply" syllabus dot point:

Since Australia's high living standards result in better wages and salaries for employees, employers face additional costs such as superannuation as part of local staff remuneration.

Businesses have determined that these higher labour costs reduce competitiveness. Based on this, several businesses made the decision to restructure their workforce, including outsourcing some functions to countries with lower labour costs. Other businesses established subsidiaries off-shore to capitalise on the opportunity to reduce production and enter new markets.

Some examples of countries where businesses can reduce costs include China, as China possesses factories capable of producing goods at very competitive prices. This has attracted the attention of a number of Australian businesses (such as Pacific Brands), which have eventually moved their production to China.

This isn't limited to production however, as other activities such as accounting and legal tasks are being outsourced to countries such as India, as not only do Indian employees charge much lower rates than their Australian counterparts, but India has large number of English-speaking, highly educated and literate employees who are able to provide services needed by Australian businesses.

To sum up, outsourcing and the establishment of subsidiaries are the main ways in which a business can reduce its HR costs to increase its competitive edge.

I hope this helps! 😄
 

Yusra366

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Joined
Oct 13, 2020
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Female
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2021
With respect to the "Global – costs, skills, supply" syllabus dot point:

Since Australia's high living standards result in better wages and salaries for employees, employers face additional costs such as superannuation as part of local staff remuneration.

Businesses have determined that these higher labour costs reduce competitiveness. Based on this, several businesses made the decision to restructure their workforce, including outsourcing some functions to countries with lower labour costs. Other businesses established subsidiaries off-shore to capitalise on the opportunity to reduce production and enter new markets.

Some examples of countries where businesses can reduce costs include China, as China possesses factories capable of producing goods at very competitive prices. This has attracted the attention of a number of Australian businesses (such as Pacific Brands), which have eventually moved their production to China.

This isn't limited to production however, as other activities such as accounting and legal tasks are being outsourced to countries such as India, as not only do Indian employees charge much lower rates than their Australian counterparts, but India has large number of English-speaking, highly educated and literate employees who are able to provide services needed by Australian businesses.

To sum up, outsourcing and the establishment of subsidiaries are the main ways in which a business can reduce its HR costs to increase its competitive edge.

I hope this helps! 😄
yes it was an immense help thank you so much once again! lifesaver
 

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