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Analysing various factors of HR functions

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Introduction to HR Functioning

Human resource management depicts the formal system that is developed for managing people within the businesses. The major responsibilities of human resources managers is staffing, employee compensation and designing work etc. Apart from this human resource department have many other responsibilities of management to training and development of employees. This report is based on a case scenario of IKEA the largest furniture retail chain in Netherlands. This report will outline the challenges and issues that facing management of people and work and the applications of strategic HRM models and their theories and approaches. Moreover, this report will also cover impact of strategic approach to people in organization.

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Assessing the role and priorities of the HR function

The changing nature of work have changed the roles and priorities of the HR functions. The priorities of HR function in IKEA are as follows,

Talent management

Human resource management is wide area that showcases the specific strengths in critical issues like talent management and talent recruitment. Nevertheless, There is still more opportunities for improvement in workforce of IKEA. The improvement in employees performance hits the revenue and profitability of the firms. Through talent management the HR department of IKEA can encourage and retain employees who are individually performing well in the organization and completing the tasks by working efficiently in their respective area of work. Apart from this retaining the talented employees in the organization is also a major priority of the HR functions.

Learning and development

Further, The another major priority of HR function in IKEA is focusing on effective learning and development of the workforce. IKEA keep improving their employees learning and development activities. The HR department of IKEA not just provide training to their employees but also enables them for effective learning. Most of the people are well aware that regular development of skills and knowledge is essential for improvement in capabilities. Thus, the HR professionals in cited firm focus on individual employee's learning and development. Moreover, development of global skills and competency is also a priority in HR functions. Thereby, the firm designs' training and development in these aspects.

Diversity and work life balance

Furthermore, diversity and work life balance is necessity of HR functions. In order to achieve the progressively varied and sophisticated requirements of the customers, IKEA provides a wide range of products with higher value and innovation to their customers. These values and innovations can only achieved through a changing work environment and different perspectives and knowledge in work life. However, The HR functions of IKEA manage these diversities in organization by flexibility, wellness and by making positive environment at workplace.

Succession planning

Succession planning is procedure of identifying and developing the employees with the potential to achieve the short term and long term goals of the organization. Succession planning helps the HR department of IKEA in increasing the availability of experienced and capable workforce in business . Thus, the succession planning is become one of the topmost priority of HR functions. The another reason HR managers of IKEA follows the succession planning is the changing environment of the businesses.

Career development

Furthermore, Career development is a lifelong process of managing learning, relaxation and transformation in order to move towards a personally discovered and developing future of the individual employees. Through career development of employees in the organization the HR department designs and implements the various training and development programs. The career development of the employees will also help the organization in achieving its goals and objectives. However, Career development of workforce is priority of the HR functions .

However, in changing work environment the priorities of HR functions are changing. The HR functions are focusing more on these priorities to compete with changing work environment.

Analyzing the different internal and external influences on HR functions

The factors which influences the HR functions are not static. To operate the responsibilities and priorities of HR functions such as, talent management, career development, succession planning, diversity of work life balance and learning and development of the employees the HR managers of IKEA have analyzed various internal and external factors that affects the HR functions . These Internal and external factors are as follows,

Internal factors

Lack of motivation

The most common cause that influences the succession planning and career development of the employee is lack of motivation at workplace. Motivation and enthusiasm of the employee apparently affects the desires and interest. The motivation of the employee is very important in order to achieve the goals and objectives of the firm. Lack of motivation is main reason for failure in career development and succession planning. The reason for lack of motivation at IKEA can be lack of faith in employee's ability, work pressure and not recognizing individual’s performance. However, it is very important to motivate employees for their efficient performance. The HR managers can motivate employees by many techniques like, recognizing individual employee's performance by giving them employee of the month awards. Further by providing them financial and non financial incentives will also help in motivating their performance. The lack of motivation in employees affects the succession planning and career development very much because of demotivation employee do not participate effectively in any development and growth plan of the organization.

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Retaining talent at appropriate positions

One more important factor that affects the diversity and work life balance is retaining the talented employee at appropriate positions of the organization. The internal policies and practices make impact on HR functions. For instance, IKEA is committed to promoting within the organization, Thus, the HR manager ensures that employees are receiving the appropriate training and development for promotion. Moreover, the firm provides them training for retaining the talented employees on top positions so that employees will be motivated and improve their performances. However, the HR department can provide several other benefits to retain talented employees in the organization. Retaining the talented employees in organization is very important in order to manage diversity and work life balance.

External factors


The most important external factor that affects the succession planning and talent management is competitors of business. The employees of the organization cause the amount of compensation that a firm is providing to retain talented employees in the organization and attract more employees in the organization. For instance, in current market environment when businesses are competing with each other. Managing right talent in the IKEA is becoming a difficult task for HR managers. The firms use various strategies to attract talented people in their organization. Sometimes the competitors of business also try to recruit employees from their competitor firms by offering them attractive salaries and promotions. In these situations it is very difficult for HR managers to manage talent in organization. However, The HR department should evaluate the compensation structure regularly and should provide workforce effective training and development for managing talented people in organization. The level of competition in businesses affects firm's ability of talent management very much.

Changes in business environment

Further, Changed business environment plays crucial role in learning and development of employees. The business environment is consisted of all social, political, economical, legal, technological changes, customs and practices of businesses. It is very important for the firm to have the workforce who can adopt all these development factors effectively. With changing technologies and economic conditions it is essential for firms to provide essential training and development to their employees . Training and development programs in organization will help in developing the skills and knowledge of the employees. Moreover, learning and development programs for IKEA's employee will enable the firm to survive in current business environment. However, changed in business in environment highly influence the HR functions.

Changes and its impact on the structure of HR function

The Netherlands furniture retail market is changing very fast. Over the next three years Netherlands furniture retail market is expected to grow by 16%. This growth rate will come with many technological and environmental changes that will make impact on IKEA's structure of the HR functions. In current market scenario online shopping is increasing. However, the online channel will be the fastest growth opportunity in next three years. As per technological changes IKEA has also enabled its online shopping portal. That brings many development opportunity in retail business of IKEA. These developments are,

  • Increased sales and profitability of the firm.
  • Strong competition to other brands.
  • More efficient workforce.

In next three years time IKEA's furniture retail business can also have growth opportunity in development of mobile apps for online shopping. These all development factors will impact the HR functions of IKEA as the HR department of IKEA will have to recruit more talented workforce who has efficient knowledge of current business needs and technological development. The technological growth in retail industry will affect the recruitment process of IKEA. However, the HR department will have to change their selection criteria and employee screening method. The HR managers will have to judge candidates on their global knowledge and technical skills. If candidate have all these potential to work in current market environment than the firm can hire those employees. However, The HR managers will also have to design some training and development programs for their employees to increase their knowledge, skills and capabilities to perform better in current market environment.

Furthermore, in next three years discount will be also the fastest growing channel in IKEA's business. In competitive Edge, the retail firms are providing more discount on the products to attract more number of consumers. These discount depends on the demand and supply of the products. However, these discounts can hamper the business practices and make impact on HR functions as well. Thus, the HR department of IKEA will have to recruit efficient marketing and sales team which can make effective marketing strategies for discounts and other promotional activities. The HR department will have to arrange training and development programs for their workforce. Moreover, the firm can also motivate employee's for their performance and work. Motivation is essential for workforce in improving employees performance and encouraging them to improve more in for future growth.

Moreover, in next three years retail industry will increase the use of product navigation technology which will help the IKEA to complete the multi transmission shopping experience for consumers by digitalise physical retail store assets. In-store navigation technology will help customers to easily find the products they came to purchase without much searching efforts in store. This technology will also increase the customer loyalty and sales by presenting relevant products in customers in-store search of product location. However, The Technological growth in all aspects of retail industry will help the firm to increase the profitability and productivity which will affect the HR functions of IKEA as well. The HR department will be responsible to recruit the talented people in organization who have the knowledge of these technologies. Furthermore, The HR managers will have to provide training to existing workforce to develop their technical knowledge and skills for providing effective services to customers. Thereby, several developments and growth opportunities in retail business will affect the HR functions as well. The HR department will have to develop according to current business environment.


Hence, it has been concluded in this report that changing business environment have changed the priorities of HR functions as well. Today's workforce is more informed than before. The thought of presenting a developing and consistent organizations to employees is giving them opportunity to grow in various fields of business environment. The HR functions play vital role in organization that helps organization in assessing the workforce according to current market needs.


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