Human Resources Planning Assignment 1 Essay

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Individual Assignment 1

1. Define and explain the significance of the term ‘derived demand’ as it applies to Strategic Human Resources Planning. (5 marks)
Derived demand is the demand for a product/services occurs as a result of a demand for another immediate good or service. When apply this concept on labour demand, the more a company's product or service the market wants, the higher the demand for labour to involve in the production process. The essence of strategic human resources planning is to align human resources planning organization's business strategy. This means company cannot perform their personnel forecast solely based on the product demand because there is some other factor that will affect the product
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Business cycle fluctuates with the economy with growth, peak, recession and trough. During the growth and peak period, business is more willing to spend money in expanding their business and consumers will have a higher purchasing power. Similarly, during recession and trough, business will be reducing their investment and cost significantly to prevent themselves out of business since consumers have a lower purchasing power and are less likely to spend. In 1982, Stonewall experienced a difficult time due to high inflation rate in which consumers are not willing to spend on constructions. With the adoption of the contractionary fiscal policy, government attempts to increase tax, which reduce consumers likelihood in purchasing house and reduce housing demand. Stonewall subsequently decided to lay off workers due to overcapacity in order to stay with the business. Housing market experience a growth in late 1991 since the interest rate began to stabilized. However, in 2008 the economy suffered a huge recession and the demand for gypsum wallboard dropped again. If Stonewall knows about the business cycle fluctuates and there are always "ups and downs" in the business due to the external economic environment which beyond the company's control, it is suggested that the company can have a clear long-term planning with regards to recession and growth and try to look for other opportunities to diversify business investment. Another possible human resources
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