Human Resource - Khan and Kennedy Logistics- Case Study- Assessment-Answer

Human Resource

Case Scenario/ Task

Case Study.

Khan and Kennedy Logistics.

In the logistics industry, the driver recruitment issue is a global one. Drivers already belonging to the top 10 jobs that employers are having trouble filling across 36 countries world-wide. (FTA:2016)

Transport in the UK currently has an aging workforce.This is leading to nationwide shortages. There is a lack of diversity with challenges around increasing gender and cultural engagement and participation. Benefits and working conditions are important too, as are making transport roles more attractive to younger talent pools. Transportation in the UK struggles with an image that is less than ideal, perceived as a low paying dead-end job, by potential candidates.

Other issues with transportation and driving roles include:

• HGVs are involved in over 50% of all fatal motorway accidents in the UK.
• 44% of those working in the transport sector were found to be feeling under more pressure than ever before.
• 80% of transport managers named driver training as one of their core responsibilities.
• 46.3% of all HGV offences that lead to prosecution are linked to drivers’ hours. (FTA:2016)

Khan and Kennedy are one of the largest British logistics firms, providing supply chain solutions to a range of household names. Making deliveries by road is a key element of the solutions they provide. They employ approximately 15,000 people over 175 sites and have a fleet of 3000 plus vehicles. One of the sites is the focus of this case study.

Michael Carver is the new Human Resources Manager (HRM) at one of the flagship contracts for Khan and Kennedy Logistics. His site, based in Staffordshire, UK, employs over 200 staff including warehouse operatives, drivers, managers and office support functions. There are also a considerable number of agency staff, specifically for the driving roles that the site struggles to recruit for. The site is based minutes away from the M6 motorway, in an area that has a large number of logistics firms.Competition for drivers is therefore high, adding to the pressure on the business to recruit and retain the best drivers.

Michael has worked for Khan and Kennedy for many years as a HRM, so is very experienced in both his role and the industry. He has been transferred to this prestigious site to improve the HR functions performance. They are currently perceived by the Senior Leadership Team (SLT) as an administrative and policing function, not as a strategic partner helping to drive business strategy and site performance.

The first and largest challenge is to resolve the lack of permanent drivers for the contract. Agency costs are out of control and the reliance on such agencies can lead to poor standards of Health and Safety, issues with logistics compliance such as EU and Working Time Directive (WTD) rules and poor customer service to the various clients in the contract. How can Michael and his team deliver a pool of competent and motivated drivers to the operational team, within the context of the national and international shortage of drivers?

BPP University Business School: Update September 2017

End of Case Study

2.1. Questions

1) Using the case study, evaluate the role of HRM in managing the business issueslocally,

having due regard for the external contexts involved. Analyse 3 key practices you think will be important in resolving the shortage of drivers as

discussed in the case study. I dentify and explain 2 ethical issues linked to the case study, which may be a challenge that

HRM should consider. 4) Apply the principles of Best Practice HR and make two HR focused recommendations based on the findings of this report, which will mitigate the issues you have discussed. Explain the benefits of your recommendations.

Introduction

Human resource management refers to the most important management function in an organisation as it deals with the recruitment, selection of employees, organisational policies related to employment and employees, employee retention, compensation, working hours etc (Hendry, 2012). Along with these responsibilities, a human resource manager also acts as a monitoring tool for the top management and also as a link between the top management and the employees. The condition of the UK transport industry is very poor because of high number of road accidents in which 50% of the fatal motorway accidents involves heavy goods vehicles (Afukaar, 2003). In this report, the light will be shed on identifying ways how to address the problem of shortage of labour at Khan and Kennedy Logistics, Staffordshire site in the UK.

Evaluation of HRM

The task on priority for Michael is to identify the reasons for low employee retention rate and hence the problem of shortage of labour is to be addressed. Another task that is to be performed by the new. In addition to this, logistics agencies are unable to comply with the EU norms and WTD (working time directive) rules. Moreover, poor customer services has also become common practice for logistic agencies. The new human resource manager is required to take corrective actions in order to address all of these problems. Past research shows that the role of human resource manager is to recruit new candidates, select the best ones and develop such strategies that focus on retaining those selected candidates. In addition to this, it has also been explained by Hausknecht, Rodda and Howard (2009) that human resource manager should make sure that organisation is complying to the laws and regulations of market (Hausknecht, Rodda and Howard, 2009).

Development of Poor Work Environment

Competition in this industry is very high due to which the problem of labour shortage is intensified. Number of road accidents involving heavy duty vehicles have increased which is causing further problem in recruitment. The aging population of the United Kingdom is also one of the biggest factor for shortage of labours. Another problem is the problem of perception. The general perception of the people towards driving job is that it is dead end job with no growth opportunities. Along with this, it is also a common perception that the work environment provided to drivers is poor and safety is not a concern for logistics companies. All of these environmental factors and perception are contributing to the problem of labour shortage.

Remuneration

Human resource manager is also responsible for develop an effective compensation plan for the employees (Noe et al., 2003). This includes structure of the basic pay and allowances. Furthermore, it should be noted that human resource manager should strive to develop a competitive compensation plan.

Cutting Down Cost to the Company

The human resource management encompasses the responsibility to cut down any unnecessary cost which is being borne by the company. Human resource manager is focusing on reducing the agency cost as they have been identified to be the prime cause for poor standard of health and safety.

Analysis of Three Key Practices for Addressing the Problem of Shortage of Labour

As mentioned above, one of the main task of the new human resource manager is to solve the problem of labour shortage at the Staffordshire branch of Khan and Kennedy Logistics. There are various options available that could be availed by the new human resource managers in order to increase the number of drivers at the Staffordshire branch and hence provide a competitive advantage to the organisation as other competitors are also facing this problem. Following practices have been identified in order to solve the labour shortage problem:

Reducing Working Hours:

It has been explained by Hausknecht, Rodda and Howard (2009) that working hours of an employee has a direct relation with the employee's intention to quit working for an organisation (Hausknecht, Rodda and Howard, 2009). It can be analysed here that reducing the working hours can be an effective employee retention technique that could solve the problem of shortage of drivers for this business organisation. As according to the case study one of the reason for shortage of drivers in this industry is because potential recruits and existing employees, both perceive this job as a dead end job that has long working hours and these long working hours leads to compromising health and safety issues of the driver. This viewpoint has also been supported by Lemer et al. (2004) as he explains that working hours has a relation with the productivity of the employees and the also helps in attracting new recruits. Lemer et al. (2004) also explains that there is a positive relationship between employee retention and new recruits frequency as according to him, less working hours can be considered as a non-monetary motivational tool (Lemer et al., 2004).

Providing Additional Monetary and Non-Monetary Benefits

Another key practice that can be adopted by the new human resource manager in order to solve the driver shortage problem is to provide additional monetary benefits like bonus and non-monetary benefits like recognition and growth opportunities to the drivers. It has been stated by Lumley (2011) that monetary benefits has a positive relationship with employee retention and talent attraction. Lumley (2011) suggests that when the employees are provided with attractive salary, more candidates are attracted to the job (Lumley, 2011). It can be analysed here that providing monetary benefits to the drivers at Khan and Kennedy's Staffordshire branch would result in solving labour shortage problem. On the other hand, Besley and Ghatak (2003) suggest that non-monetary benefits like promotion, recognition and providing growth opportunities lead to job satisfaction which further leads to employee retention and attraction (Besley and Ghatak, 2003). In this regard, it can be analysed here that non-monetary benefits can also play a significant role in retaining drivers. However, according to the case study, the new human resource manager has to cut down unnecessary cost hence Michael should go for offering non-monetary benefits to drivers like providing growth opportunities so they do not see this job as a dead end job.

Recruitment from Across the Globe and Proving Growth Opportunities

Along with the above mentioned two key practices, there is another alternative that can be selected by the new human resource manager in order to solve the problem of labour shortage at Staffordshire branch of Khan and Kennedy Logistics. In has opined by Pittman, Folsom and Bass (2010) that with the advent of globalisation, international trade practices have become cheaper and easier. They also explained that globalisation also facilitated migration of people from different countries in order to seek employment opportunities (Pittman, Folsom and Bass, 2010). It can be analysed here that expanding the geographical boundaries for recruitment is very helpful in solving the problem of labour shortage. In the case of Staffordshire branch of Khan and Kennedy Logistics, the new human resource manager should develop plans to recruit drivers from other countries where English is the first language so that cultural and language barriers can be minimised. Along with this, the mistake of hiring them for the driving job and not offering them with any growth opportunities should not be reputed. It is of utmost importance that the human resource manager develop such plan that provide growth opportunities to foreign drivers too. It should be noted that hiring foreign employees may also cut down the cost of operations.

Ethical Issue

Ethical issues refers to any such organisational policy or practice that is adversely affecting the health or/and safety of the employees in organisational setting or any other setting (Beauchamp, Bowie and Arnold, 2004). It has been explained by Carter (2000) that business organisations should work on such polices and norms that do not compromise with the health and safety of the employees (Carter, 2000). Ethical issues includes discrimination on the basis of gender and colour, discriminatory wage system, employee safety, working environment to the employees, operational process and many other organisational functions and polices come under business ethics. In the case of logistics and transport industry, two ethical issues have been identified which are extreme working hours leading to ignorance of health and safety issues of drivers and promotion of cut-throat competition. These ethical issues are acting as a challenge to the organisation as they are leading to the problem of driver shortage. These two ethical issues have been discussed as follows:

Extreme Working Hours Leading to Health and Safety Issues

The job of driver is associated with extreme working hours in the transport and logistics industry. In the case of Khan and Kennedy logistics firm also , this issue has been found which is leading poor morale of the drivers. According to Spurgeon, Harrington and Cooper (1997) extreme working hours affects the mental health of an individual and may lead to long term psychological consequences (Spurgeon, Harrington and Cooper, 1997). The business organisation should develop such policies that can shorten the length of working hours in Khan and Kennedy logistics firm so that the problem of labour shortage can be solved.

Promotion of Cut-Throat Competition

Another ethical issue that has been identified from the case study is that the competition of attracting more customers and retaining more drivers is leading to the promotion of cut-throat competition in the transport and logistics industry. In the case of Khan and Kennedy logistics firm operating at Staffordshire also, the level of competition is very high among different logistics firm and logistics agencies which is may promote the use of unethical means to get the job done.

HRM Recommendations

In order to solve the problem of labour shortage and other problems identified in the case study, two recommendations have been made. These recommendations are as follows:

Reducing Working Hours via Rotational Shifts and Providing a Healthy and a Safe Working Environment:

It is recommended that the Khan and Kennedy Logistics should focus on reducing the working hours for employees so that new recruits can be retained for a long period of time. In addition to this, reduction in working hours would also lead to attraction of new recruits as well as it general accepted that less working hours has a direct relation with the job satisfaction (Bruck, Allen and Spector, 2002). In addition to this, it is also recommended that the human resource manager should provide a safe working environment by ensuring that air bags in the vehicle are working and by maintaining a regular check of the vehicle in order to ensure the safety of the driver. Along with this, a healthy working environment should be provided to the drivers as well. All of these checks would ensure that drivers stay with the firm for a long period of time.

Reducing Reliance on Logistics Agencies

It is also recommended that Kennedy and Khan logistics reduce their reliance on logistics agencies as it may lead to poor health and safety standards which may affect the retention of drivers in the short run. Hence, it is recommended that the business organisation should revaluate its current position in term of the significance of these logistics firm to the business and take actions accordingly. Furthermore, it should also be noted that reliance on these agencies is creating additional cost disadvantage for the business too.

Conclusion

From the above discussion, it can be concluded that in order to solve the problem of labour shortage at the Khan and Kennedy logistics Staff ordshire branch, three key practices have been identified which are reducing working hours, providing monetary and non-monetary benefits to the drivers and recruiting from foreign countries. In addition to this, it can also be concluded that two ethical issues related to the logistics and transport industry have also been identified which include extreme working hours that are leading to health safety issues and promotion of cut-throat competition in the industry. Lastly, two recommendations have been made to solve the problem which is to reduce working hours by introducing the idea of rotational shifts and reducing the depends on logistics agencies.