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Consider the competitive environment of Starbuck's, Progressive Insurance, a manufacturing firm with low turnover, or a...

Consider the competitive environment of Starbuck's, Progressive Insurance, a manufacturing firm with low turnover, or a large hospital system.

Discuss how the challenges and implications from the competitive environment create challenges in the company's human resources department.

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Competitive sector climate often generates difficulties for the department of human resources. Here we look at a family-owned Asian manufacturing business that has grown out of a cottage industry.

The owners regarded this company's staff as a family. It is not uncommon to see the owners attending an employee's marriage or contributing to an employee's surgery being treated. Employee wages are competitive on the market and no one lifted an eye or left the business when during the great recession it did not give a hike. The individual entering the workforce was working until retirement. They braved together the bad and the good times.

The times have now altered. The region has shown fast economic growth over the past century, with some multinationals arriving in the region challenging the dynamics of company. They provided the workers greater wages and benefits, but they also requested excessive job. The business saw the staff switching to the competitors for better salaries in its fifty-year existence. Although older staff still see this business as the best choice, there are fresh people who prefer cash and development to the excellent job culture, business ethical manner and good job atmosphere. For obvious reasons, the company can not match the wage structure of multinationals.

The greatest challenge with the company's HR is finding a way to keep the rivals from poaching their quality manpower. The business that is already struggling to match the rivals ' productivity and uality standards can not afford to increase staff expenses, making it difficult to survive. The age-old ethos of the company is against reducing the workforce and becoming more competitive or reducing salaries, which would further aggravate the scenario.

The competitive environment could force organizations to take hard HR choices, as is imminent in this situation where restructuring of the workforce and changing HR policies are the only way to remain afloat.

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