Home › Learning Hub › IB DP Business Management › 2.1 Introduction to HRM
2.1

Introduction to human resource management

Unit 2 · Human resource management · SL and HL

People are the one resource that can decide to work harder, leave, resist or innovate. Human resource management (HRM) makes sure a business has the right people, with the right skills, in the right place at the right time. This page covers what HRM does, the internal and external factors that shape workforce planning, and why people resist change and how HR can reduce that resistance.

🎯What you need to be able to do

  • Explain the role of human resource management.
  • Explain internal and external factors that influence human resource planning, such as demographic change, labour mobility, immigration, flexi-time and the gig economy.
  • Explain the reasons for resistance to change in the workplace.
  • Evaluate human resource strategies for reducing the impact of change and resistance to change.

📚The business management

The role of HRM

Human resource management is the management of an organization’s workforce: planning how many and what kind of employees are needed, and then recruiting, training, developing, motivating, rewarding, appraising and, when necessary, dismissing them. Good HRM links people decisions to the organization’s objectives: an airline planning new routes needs pilots and cabin crew trained and in place before the first flight.

Human resource (workforce) planning

Four steps: analyse the current workforce's skills, ages and turnover; forecast future needs from objectives and sales forecasts; identify the gap, a shortage or surplus; and act by recruiting, training, redeploying or reducing staff. Internal factors: labour turnover, technology, growth or restructuring, budget and HR policies. External factors: demographic change, labour mobility, immigration, flexi-time expectations, the gig economy, labour law and the state of the economy.
Workforce planning compares the workforce a business has with the one it will need.

Internal factors: the organization’s objectives and growth plans; labour turnover and retirements; new technology (automation needs fewer but more skilled staff); restructuring; the HR budget.

External factors:

  • Demographic change: an ageing population shrinks the labour supply in some countries; Indonesia’s young, growing workforce (a “demographic dividend”) offers plenty of potential recruits but demands job creation.
  • Labour mobility: occupational mobility (ability to change job type, which depends on skills) and geographical mobility (ability to move location, which depends on housing, family, cost).
  • Immigration and emigration: migrants can fill skills gaps; emigration of skilled workers (“brain drain”) creates shortages.
  • Flexi-time and flexible working: employees increasingly expect flexible hours, part-time work and remote or hybrid work, especially since the pandemic.
  • The gig economy: work organized as short-term tasks paid per job, often through apps (ride-hailing drivers, delivery riders, freelancers on online platforms). Gives firms flexibility and low fixed costs, but workers lack security, benefits and often bargaining power.
  • Also: labour law (minimum wages, contracts), the state of the economy, education and training systems, competitors’ pay.

Resistance to change

Employees often resist change, even when it is in the organization’s interest, because of:

  • Self-interest: fear of losing jobs, pay, status or power.
  • Fear of the unknown and low tolerance of change: uncertainty about new roles or skills.
  • Misunderstanding and lack of trust: poor communication about why change is needed.
  • Different assessments: staff may genuinely believe the change is a mistake.
  • Habit and comfort with existing routines, and loss of social relationships if teams are broken up.
A curve of morale and performance over time that dips through shock and denial and resistance, reaches a low point, then rises through exploration and acceptance to commitment above the starting level. HR can shorten the dip by explaining reasons, involving staff early, training and supporting, negotiating and rewarding, and phasing changes in.
A common pattern of reactions to change: the aim of HR is to make the dip shallower and shorter.

HR strategies for managing change

Education and communication
explain why change is needed, early and honestly. Cheap and builds trust, but takes time.
Participation and involvement
involve staff in planning; they gain ownership. Slower, and staff may push their own interests.
Training and support
retraining, counselling, time to adjust. Reduces fear of new skills; costs money.
Negotiation and incentives
pay rises, bonuses or voluntary redundancy packages. Effective with unions; can be expensive.
Phasing and piloting
introduce change gradually or test it in one site first. Lower risk; slower benefits.
Coercion
imposing change by authority. Fast but damages morale and trust; a last resort.

The right mix depends on the urgency of the change, the power of employees and unions, the culture of the organization and the resources available. The HL toolkit’s force field analysis helps weigh the forces for and against a change.

✏️Worked example

A hotel with 120 staff plans to open a second property in 18 months, needing 60 more staff, including 8 experienced chefs. Its labour turnover is about 20% a year. (a) Estimate how many new staff it must recruit over the next 18 months. (b) Explain two external factors that could make recruiting chefs difficult. (c) The hotel also plans to introduce a new booking system that changes receptionists’ work. Suggest how HR could reduce resistance.

(a) Replacing leavers: 20% × 120 = 24 a year, so about 36 over 18 months. Plus 60 for the new property: roughly 96 recruits (more, if new staff also leave at the same rate).

(b) Competition for skilled labour in a busy tourist area, as other hotels and restaurants expand after demand recovers; emigration of experienced chefs to jobs on cruise ships or abroad, which pay more; limited geographical mobility if chefs from elsewhere cannot afford local housing.

(c) Explain why the system is being introduced (fewer booking errors, faster check-in); involve senior receptionists in testing it; train all users before launch; run the old and new systems together for a short period; reassure staff about job security if that is true.

Check it. Workforce planning numbers must include both growth and replacement of leavers; ignoring turnover is the most common error.
Listing generic factors. In a case study, pick the factors that matter for that business: a Bali hotel and a software company face very different labour markets.

📝Practise

Work through these on paper, then reveal the answer.

1. [2 marks] Define the term gig economy.
A labour market in which work is organized as short-term, task-based jobs (“gigs”), often arranged through digital platforms, rather than permanent employment.
2. [2 marks] Distinguish between occupational and geographical mobility of labour.
Occupational mobility is the ability of workers to change from one type of job to another (depends on skills and training); geographical mobility is the ability to move to work in a different location (depends on housing, family, cost of moving).
3. [4 marks] Explain two benefits to a business of using gig workers.
(1) Flexibility: the business can increase or reduce labour quickly as demand changes, paying only for work done. (2) Lower fixed costs: no salaries, pensions or benefits for idle time, and less office space. (Also: access to specialist skills on demand.)
4. [4 marks] Explain two reasons why employees might resist the introduction of new technology.
(1) Fear of job loss: automation may replace their roles. (2) Fear of the unknown / lack of skills: they may worry they cannot learn the new system, affecting their performance and status. (Also: poor communication, habit, loss of social contact.)
5. [4 marks] Explain how an ageing population could affect a firm’s human resource planning.
Fewer young workers enter the labour force and more staff retire, creating skills shortages and higher wage costs. The firm may need to retain older workers longer (flexible hours, retraining), recruit migrants, automate tasks, or invest more in training younger employees. Customer demand may also shift towards products and services for older people.
6. [10 marks] Discuss the strategies a bank could use to reduce resistance when it closes branches and moves customers to digital banking.

Staff will fear redundancy and loss of status. Strategies: early, honest communication about the reasons (customers moving online, costs); participation (staff design the new customer-support roles); retraining branch staff for digital support, sales or call-centre roles; voluntary redundancy and early retirement packages; phasing closures; supporting staff through the change curve.

Evaluation: communication and retraining build trust but cost money and time; incentives are expensive; coercion is fast but damages morale and the bank’s reputation. A combination suited to the bank’s culture and union strength is best; consider the trade-off between speed of cost savings and staff goodwill.

🔗Go deeper — other people’s work

These are external resources, not mine. If one stops working, tell me and everything above it on this page still stands.

  • International Labour Organization (ILO) — reports on the gig and platform economy.
  • John Kotter, Leading Change — a classic model of managing organizational change.
  • CIPD — free factsheets on workforce planning and change management.