The contemporary business environment presents a variety of challenges to companies, regardless of their size and industry. Human resource (HR) departments have to understand these trends and their influence on workplaces in order to provide their companies with effective management strategies. The three main changes that have occurred in the past years and affected contemporary businesses are the emergence of flexible working patterns, generational differences and increased diversity. The report will seek to explore the drivers and effects of these changes on Nestlé, explain the importance of the HR department in addressing these trends and provide relevant recommendations as to which HR strategies could assist the company in managing the workforce more effectively.
Flexible Working
Flexible working patterns have emerged in the past few years, changing the ways in which people live and work. Trends in flexible working show a minor increase in this practice over the past two decades. According to the CIPD (2019), improvements in the numbers of part-time and term-time workers are relatively small, and the share of people who work from home only increased by 1.2% between 2002 and 2016.
However, the institution also states that these figures do not accurately reflect the issue and its prevalence because many employees have informal arrangements with their managers that allow for more flexibility in the workplace (CIPD, 2019). In this way, employees can have traditional, 9-5 job on paper, but take personal time off regularly, work from home some days of the week or show other signs of flexible working patterns.
The primary forces that have led to the popularisation of flexible working are social and technological. On the one hand, the development of mobile technologies and electronic communication allowed for the establishment of virtual workplaces, thus enabling many people to work from anywhere in the world (Viete and Erdsiek, 2015). While this does not apply to some jobs, such as production line technicians, cleaners and drivers, many office-based tasks can now be completed remotely from laptops or the employee’s personal computer.
On the other hand, changes in family structure have also facilitated the interest in flexible working. Statistics from the CIPD (2019) on the prevalence of flexible working patterns show their growing popularity among persons with children. This allows suggesting that flexible working is a way for modern parents to balance their responsibilities. In the past, women were usually tasked with household activities, but in the contemporary world, both partners are often required to make adjustments to their work schedule in order to devote enough time to their children and other family members.
Generational Changes
Another significant change that affected the way companies work today is the shift from Traditionalists and Baby Boomers to later generations. Generational differences have essential influences on the population and impact people’s lifestyles, attitudes, shared values and preferences. Consequently, when millennials became an integral part of many workplaces, it brought changes to labour composition and working practices. Research shows that the majority of the workforce in the United States now belong to three different generations: Baby Boomers (30%), Generation X (27%) and Millennials (42%) (Jones et al., 2018).
Although this change occurred as a result of natural processes, the differences between generations are usually attributed to sociocultural, economic and technological forces. As explained by Jones et al. (2018), economic prosperity had a significant influence on the way people perceive work and life in general. Furthermore, the developments in technology that took place over the past decades made younger people more technologically savvy, affecting their working patterns. The scale and volume of social and political changes that occurred in the latter part of the 20th century also made younger people more adaptable and accepting of change (Jones et al., 2018). These influences are manifested in the generations’ approaches to work and their needs with respect to management.
Research suggests that members of different generations have varying views on work and success, which shapes their preferences. For example, Baby Boomers are invested in companies where they work more so than Gen X or Millennials and prefer to stay in one workplace for longer periods of time if it grants them the necessary career development opportunities (Jones et al., 2018).
The recent generations are more independent and focus on their personal development facilitated by career objectives instead of seeking to enhance career-based skills (Jones et al., 2018). They are more self-reliant than Baby Boomers and can be distrustful of authority, which makes it more challenging for managers to find the right approach (Jones et al., 2018). Consequently, companies employing various generations face new challenges stemming from generational differences.
Diversity
Research shows that modern workplaces have become more diverse in terms of race, gender, sexual orientation, age, nationality, religion and other characteristics over the past decades. In the United Kingdom, the share of white people who were employed stayed mostly stable between 2004 and 2018, but the employment rate of other ethnicities increased (Office for National Statistics, 2019). Similarly, the ageing of the workforce has influenced the diversity of generations that modern companies are comprised of (Jones et al., 2018).
In terms of gender and sexual orientations, female workers have become more prevalent in a variety of occupations, including highly technical and scientific fields that were not available to them before, and the increased acceptance of LGBTQ+ movement has also contributed to the diversity of modern workplaces (CIPD, 2018; Michael Page, 2016). These changes in labour composition were driven mainly by sociopolitical shifts improving the access of diverse people to various occupations, fighting workplace discrimination and reducing work-related disparities. Because of these trends, diversity is now evident on all organisational levels. Moreover, large companies are motivated to enhance diversity further by instituting various policies and programs, as diversity contributes to their image among customers (Buckley et al., 2018).
Diversity can have different influences on the organisation depending on specific management practices, the corporate culture, and the work environment. For example, CIPD (2018) notes that “effects of diversity on performance are moderated by aspects of the organisation context such as industry and inclusiveness of the organisation climate” (p. 7). Consequently, diversity can impact workplaces and teams both positively and negatively. In companies where diversity is poorly managed, it can increase conflict, reduce collaboration and communication and impair productivity, whereas workplaces with well-managed diversity usually benefit from increased creativity, improved problem-solving and better team outcomes (CIPD, 2018). Hence, it is crucial for HR managers to address variety in the workplace adequately.
The Role of HR and HR strategies
HR departments have a pivotal role to play in modern organisations, and HR strategies that align with companies’ strategic objectives can help businesses to succeed. According to Sondhi (2018), the role of HR in organisations has evolved substantially in the past years. Today, HR specialists act as employee advocates, change agents and strategic partners to the organisation’s leaders (Sondhi, 2018). Therefore, HR departments are responsible for mediating the relationship between leadership functions and the rest of the workforce, as well as for implementing organisational changes, supporting organisational development and fostering corporate culture.
These features are particularly important in modern organisations that face a wide variety of challenges from economic to sociocultural. In today’s context, HR departments can evaluate and analyse the trends affecting employees and define strategies for responding effectively. Consequently, HR strategies have become among the essential solutions to modern workplace challenges. By implementing training, planning and other strategic activities, HR departments can help companies to yield the benefits of diversity, adjust to the demands of new generations and meet the needs of workers who desire to be more flexible.
Ensuring the alignment of HR strategies with organisational strategic plans and goals is essential because it helps to make human resources work for the organisation and support its growth and success. However, organisations also need to make human resources part of their strategies to ensure mutual development. Nestlé’s strategic goals target organisational development, consumer knowledge, market growth, efficiency and value (Nestlé, 2018). The company’s human resources have a crucial part to play in achieving these goals.
For example, continuous improvement of HR policies and practices could help the company in developing value for its stakeholders and local communities. Focusing on meaningful development of employees’ skills, knowledge and expertise can also assist the company in understanding customers’ needs and trends affecting the market, creating better quality products and increasing productivity and efficiency of operations. In this way, ensuring alignment between HR strategies and general strategies of the organisation is crucial to long-term success in the contemporary business environment.
Influence of Changes on Nestlé
The influence of the identified changes on Nestlé is profound as the company employs a large workforce with diverse workers with varying needs and requirements. Some of the changes require the company to develop new HR strategies and policies that could help to manage the workforce more effectively. Additionally, these issues can impact the organisation positively or negatively depending on the management’s response to them. To understand the influence of social and labour changes highlighted in the previous section on Nestlé, it is crucial to consider how they impact the company’s workforce and operations, as well as to explore the possible social and cultural issues arising from the management of the changing workforce.
Flexible Working Patterns
As noted by scholars in human resources, the need of employees for flexible working patterns arises from social and technological changes that took place in recent years. More specifically, employees of Nestlé are now striving to maintain their work-life balance more effectively while also embracing the opportunities provided by mobile communications technologies (CIPD, 2019; Viete and Erdsiek, 2015). Furthermore, many employees also need flexible working to be able to invest more time in their personal and professional growth. According to research by Fong et al. (2017), a growing share of adults in the United States wish to pursue continuing education either to improve their career prospects or to change their field of specialisation. This trend is similar in most developed economies where people have more opportunities for long-term career progression and have sufficient funds to invest in their education.
In order to accommodate these changes and maintain employee commitment to the organisation, large companies are required to adjust by improving the choice of flexible working arrangements available to employees. This resulted in a trend to make human resource management more person-oriented in an effort to respond to employees’ diverse needs (de Menezes and Kelliher, 2017). Flexible working arrangements, whether formal or informal, have significant consequences for organisations and the people working in them.
For instance, research shows that casual flexible working arrangements result in higher organisational commitment, job satisfaction and employee performance, thus assisting companies in working more effectively despite possible disruptions in work processes (de Menezes and Kelliher, 2017). Formal flexible working arrangements, in turn, have a positive impact on job satisfaction but little impact on organisational commitment, and thus they might damage performance (de Menezes and Kelliher, 2017).
Managers play a critical role in handling employees’ flexible working requests. As explained by Cooper and Baird (2015), this is likely due to the high prevalence of informal arrangements. While increased collaboration between managers and workers with respect to scheduling, time off and related flexible practices can have positive effects, it can also raise some issues. First of all, the use of informal arrangements could damage the relationship between managers and employees if employees’ requests are often denied.
Secondly, managers can also feel pressured to fulfil employees’ requests even when it damages organisational productivity. This is because the interplay of concepts of job satisfaction, organisational commitment and performance also affects the way people respond to flexible working arrangements. In efforts to increase employee commitment and satisfaction, managers can thus compromise organisational productivity.
Generational Differences and Diversity
Generational differences and diversity have similar effects on Nestlé because they impact people’s attitudes, relationships and needs. Generational differences often shape people’s preferences with regard to work tasks and management (Stewart et al., 2017). This fits in with the premise of the generational theory, which posits that generational characteristics are determined both by the time period in which generation was raised and by the age of people within this generation (Lyons et al., 2015).
This shapes interactions between people from different generations. On the one hand, they might struggle to understand and relate to one another because of age differences. On the other hand, being raised in different circumstances has shaped the discrepancies in life views, values and attitudes, which also impairs communication and collaboration.
In a similar manner, organisational diversity can have a negative impact on work teams based on group dynamics theory. Variety in terms of gender, sexual orientation, nationality, race and religion brings fundamental differences to team composition, which may affect team performance, coherence and general functioning (van Knippenberg and Mell, 2016).
Because group dynamics theory also involves the concept of power composition, it is also possible that people from minority backgrounds may feel alienated or discriminated against, and thus diverse groups could reflect power inequalities evident in society (Holck, 2016). In this way, diversity can disrupt team performance at Nestlé, deteriorate organisational culture and impair work environment at Nestlé if not managed adequately.
In managing a workforce that is diverse and involves people from multiple generations, managers at Nestlé are likely to face a variety of social and cultural issues. The first issue evident here is intergroup conflict, which could influence the ability of teams to collaborate and achieve shared goals. Due to value incongruence or disagreements resulting from differences in views and attitudes, relationships among employees or between employees and managers could be damaged, leading to higher rates of conflict and creating a hostile work environment (Stewart et al., 2017; van Knippenberg and Mell, 2016).
Another prominent issue in relation to generational differences and diversity is discrimination (CIPD, 2018). Based on inherent beliefs about specific groups’ characteristics, people can treat their colleagues or subordinates differently. Despite large companies, including Nestlé, having anti-discriminatory policies in place, employees may still exhibit negative attitudes toward specific groups of people, which disrupts collaboration and teamwork and leads to poor organisational outcomes. Addressing these social and cultural issues while as part of managing diverse teams is essential to achieving lasting results.
Recommendations
Training and Development
Training and development are essential in the modern HR context, and they can bring numerous benefits to Nestlé both in dealing with the challenges mentioned above and in improving the general effectiveness of the workforce. Firstly, employee training can help workers to develop various skills required to meet their personal and team performance goals.
According to Jha (2016), modern companies actively use training to improve on-the-job performance of their employees, as well as to ensure compliance with various internal policies and procedures. In this way, training can support performance while also improving employee responses to diversity, generational differences and other challenges. Furthermore, training was found to increase employees’ organisational commitment (Hanaysha, 2016). Hence, effective training can also improve other workforce-related outcomes, such as the intention to stay, motivation and engagement.
Secondly, organisational development is comprised of various activities aimed at improving the potential of individual employees, teams and the organisation as a whole in meeting strategic goals and fulfilling tasks. Organisational development is a powerful tool in supporting organisational change, which makes it particularly relevant in the context of changing workforce composition and high volatility of the external social, political and economic environments (Odor, 2018). Organisational development also proved to have a positive impact on performance and employee commitment, as well as on organisational culture and climate.
As explained by Odor (2018), corporate development initiatives help managers to promote a culture of openness, trust and respect, reduce power inequality in organisations and support collaboration between workers at different organisational levels. Therefore, organisational development and training would be highly beneficial for Nestlé in improving the effectiveness of employees and adjusting to social and cultural changes shaping the contemporary labour force.
Performance Management
Performance management has become an integral part of the HR function in many large companies, including Nestlé. Performance management can take a variety of forms, but it usually consists of activities related to measurement, goal-setting, motivation and performance tracking. Contemporary performance management practices can be tailored to organisational characteristics, and this improves their effectiveness in facilitating productivity. In the face of challenges presented by developments in the labour force, the HR department of Nestlé would benefit from improving performance management design and implementation.
There are many ways in which this goal can be achieved, and taking an evidence-based approach to performance management is usually advised. The first step that the HR department needs to take with respect to performance management at Nestlé is to ensure that the company’s performance management system is aligned with its short- and long-term strategic goals and plans (Levy et al., 2017). This step necessitates an in-depth review of current performance management activities and the analysis of their compliance with Nestlé ‘s strategy. The second step that the HR department should take is to support feedback processes though technological innovations and collaboration between workers at various organisational levels (Levy et al., 2017).
Feedback plays a crucial role in performance management, as it helps employees and teams in defining areas for improvement. By supporting feedback processes, HR will help to enhance the effectiveness of performance management at Nestlé. The third step to be implemented by HR is the development of a performance management reporting system aimed at tracking performance management efforts and critical indicators over time (Levy et al., 2017). This would help the department to support other organisational functions and provide guidance for future performance management.
Organisational Productivity
Apart from performance management, there are also various HR practices that could help Nestlé to enhance organisational productivity. Applying these practices consistently throughout the company would assist Nestlé in meeting its strategic goals while also improving the company’s use of its workforce. For example, communication plays a vital role in facilitating organisational productivity because it clarifies tasks and assignments that employees need to complete (Boitnott, 2015).
Open, two-way communication in the organisation can also prevent productivity decreases by alerting the management of any issues that could impede task completion and ensuring that they are solved quickly (Boitnott, 2015). The HR department of Nestlé could promote communication by designing and implementing fast and accessible internal communication channels, conducting training in workplace communication and monitoring employees’ communication attitudes, preferences and practices.
Additionally, motivation activities of HR could help to promote organisational productivity at Nestlé. Motivation has been the cornerstone of human resources research for years, and scholars have developed many HR practices that can help in improving workforce productivity. For example, gamification of tasks through various rewards, employee rankings and internal competitions can improve motivation and productivity (Boitnott, 2015).
Goal-setting can also be integrated into motivation practices and activities, thus providing employees with clear aims and objectives to be completed (Boitnott, 2015). The HR department could support the application of motivation techniques throughout the company by providing advice and education to managers, designing reward and recognition schemes and tracking employees’ responses to motivation-related activities.
One particular aspect of HR work that is not often connected to productivity is organisational culture. This feature is often viewed as central to the organisation, yet studies of its impact focus mostly on employee-level outcomes, such as commitment or job satisfaction. Still, scholars suggest that corporate culture could have a positive influence on organisational productivity if applied appropriately.
Seppälä and Cameron (2015) explain that the corporate culture of fierce competition used in many companies is ineffective at fostering productivity and can be damaging to employees. In contrast, positive organisational cultures can help organisations to achieve increased productivity and support employees’ completion of tasks and goals (Seppälä and Cameron, 2015). The HR is highly responsible for corporate culture because it can be facilitated through internal policies, procedures, communication and management practices. Hence, the HR department of Nestlé should take action to revise the company’s strategy and make it more positive to achieve better outcomes.
Conclusions and Industry Best Practices
On the whole, the report highlighted the challenges faced by Nestlé due to changes in its social, political and economic environment. The recommendations highlighted in the previous sections would help the company in responding to these concerns while also enhancing worker effectiveness. The recommendations were primarily shaped by research that considers industry best practices. The studies included in the review report excellent results achieved by companies that implemented the recommended techniques.
This suggests that the Nestlé could yield the same benefits by implementing these practices. Nevertheless, the results of the implementation will depend a lot on the management’s actions and attitudes in response to the recommendations. Supportive, empowered and motivated action by human resource management will help the company to achieve new heights and cope with changes in the workforce in the most effective way.
Reflective Statement
Studying this module has helped me to improve my understanding of how various trends in society, economics and technology impact the labour force and what HR managers have to do to assist organisations in coping. Over the past few years, there have been many developments in how people interact with one another, work and learn, and these changes affect all businesses, regardless of how large or small they are. Technological developments proved to have a substantial impact on the daily lives of most people living in developed nations, which caused lifestyle and work adjustments.
The evolution of flexible working practices is among the most influential trends that are already shaping the workplaces of today. Although part-time work and flexible scheduling were present in the past, new technologies allowed people to work from home, and many employers are already allowing people to select the location of their work. Under current circumstances, millions of people are forced to work from home during the pandemic, which might affect the adoption of flexible working practices by companies and individuals in the future.
At Nestlé, flexible working practices are likely to have a significant impact on various operations and activities. A substantial share of employees at Nestlé is office workers who perform tasks that do not require physical presence in the organisation, such as preparing reports, analysing information, conducting conferences, scheduling and planning. With the help of modern technologies, these tasks can be completed from anywhere in the world. Additionally, the increasing use of technology is also likely to speed up many organisational activities and processes, thus providing opportunities for flexible scheduling, part-time work and other flexible working arrangements. Organisational training and development initiatives that are in place in most large companies, including Nestlé, could also contribute to flexible working practices by enabling employees to share responsibilities and tasks with others. While these developments are highly beneficial for employees and will allow them to maintain their work-life balance, they can also disrupt organisational activities and operations, and thus it would be crucial for Nestlé to apply effective HRM practices to avoid delays or incomplete tasks.
In addition to impacting the role of employees and organisations, I believe that flexible working practices could also have a substantial positive influence on the HRM function. On the one hand, flexible working practices could help HR managers to enjoy work more and experience less stress, leading to better performance outcomes, motivation and job satisfaction. On the other hand, the popularisation of flexible working practices could also lead to improved relationships between employees and the HRM functions. This is because the adjustment to flexible working patterns requires HR managers to take their employees’ side, advocate for their interests and respond to their needs. Consequently, the HRM function would benefit from greater integration into the organisation and better relationships with its employees.
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