VitalFizz is a drinks company producing low-sugar sparkling drinks. Its products are sold through supermarkets, gyms and convenience stores in several large Chinese cities.
The company currently employs 240 people.
VitalFizz has grown quickly, but competition in the healthy-drinks market is increasing. Its directors have approved a three-year plan to launch a natural-energy drink, increase production by 50% and enter three new Asian markets. The business also wants to increase online sales while keeping its prices competitive.
Department | Employees |
Production and packing | 125 |
Product development | 18 |
Sales and marketing | 35 |
Logistics | 32 |
Customer service and administration | 30 |
The expansion will create several human resource challenges. VitalFizz’s product-development team has experience creating sparkling fruit drinks, but few employees have experience developing energy products. The new drink must also meet different food-safety and labelling requirements in each market. VitalFizz may therefore need to recruit specialist food scientists or train its existing employees.
The nature of VitalFizz’s products also makes quality control important. Errors in production could affect customer safety and damage the brand. The company will need enough trained production employees to increase output without reducing quality.
Working arrangements are another consideration. Many office employees want greater flexibility over when and where they work. Several experienced employees have said they may leave if VitalFizz requires them to work fixed office hours. Flexi-time could help the company retain these employees. However, flexible working would be more difficult for production workers because the machinery must be operated using organised shifts.
The labour market around VitalFizz’s production site is also changing. A growing number of experienced production employees are approaching retirement. At the same time, many younger workers in the area prefer jobs in technology and professional services rather than manufacturing.
VitalFizz has received applications from workers who have recently moved to the region, including some from other countries. This could increase the supply of labour available to the business. However, some applicants may require additional language training or help adapting to VitalFizz’s working practices.
The company has found it particularly difficult to recruit food scientists and technical specialists. Suitable workers exist in other regions, but some are unwilling to relocate because of housing costs and family commitments. VitalFizz could train existing science graduates for these roles, although this would take time and increase training costs.
Online sales also create uncertainty. Demand is much higher during holidays, sporting events and the summer. One director wants VitalFizz to use temporary delivery drivers, freelance social-media creators and short-term brand ambassadors during busy periods. This could give VitalFizz a more flexible workforce and reduce fixed labour costs. However, temporary workers may have less knowledge of the brand and be less committed to the business.
VitalFizz is also considering an automated bottling and packing system. The technology would increase production capacity and improve consistency. It would reduce the number of manual packing employees required, but the company would need more technicians and employees with data-monitoring skills. Some existing production workers could be retrained, while others might need to be redeployed or made redundant.
Finally, economic growth in some of VitalFizz’s target markets has slowed. This could reduce demand for its drinks and make the planned expansion less successful. However, a weaker economy may also increase the number of people looking for work. VitalFizz’s HR managers must therefore prepare the workforce for growth without recruiting more permanent employees than the business can afford.
Questions
- Factors affecting HR planning
Identify:
- three internal factors affecting VitalFizz’s HR plan;
- three external factors affecting VitalFizz’s HR plan.
For each factor, include evidence from the case study.
- Internal factors — AO2
Explain how two internal factors could affect VitalFizz’s human resource plan. [6]
- Labour supply — AO2
Explain how two changes in the external labour market could affect the supply of employees available to VitalFizz. [6]
- Technological change — AO3
Analyse the impact of the automated bottling and packing system on VitalFizz’s human resource plan. [6]
- Gig economy — AO3
Analyse one advantage and one disadvantage to VitalFizz of using temporary and freelance workers during busy periods. [6]
- HR recommendation — AO3
Recommend two human resource actions VitalFizz should take to support its expansion.
For each recommendation:
- identify the action;
- explain which HR problem it addresses;
- analyse its likely effect on VitalFizz.
Extension
Which factor is likely to have the greatest influence on VitalFizz’s human resource plan?
Justify your answer using evidence from the case study.