Essay: Key business issues & main external factors affecting a Care Home Group

Introduction
The following report is for CEO and the board of Cedars Care Group (CCG). CCG is a group of 8 care homes located in different parts of England with centrally based Head Office in South of London. It is a family owned company formed in 2003. In this report I will comment about the key contemporary business issues and main external factors affecting the organisation and the impact on HR. I will include extensive analysis on HR strategies and practices and how these are shaped and developed within the organisation. I will include SWOT and PESTLE analysis and the changes in business environment.
Contemporary business issues & External Business Factors (1.1, 2.1)
Every organisation in contemporary world must have strong contingency plan to respond to external and internal factors that can affect business at any time.
According to BMGI Problem Solved there are 10 major business issues:

1. Uncertainty
2. Globalisation
3. Innovation
4. Government Policy & Regulation
5. Technology
6. Diversity
7. Complexity
8. Information overload
9. Supply chains
10. Strategic thinking & problem solving

External factors are beyond an organisation’s control. Even though it is not possible for managers to control them it is highly important to be aware of them and understand them. External factors can influence business decision making for any kind of industry and market, even if it is monopoly or perfect competition.
CCG External Business Factors (1.1, 2.1)
Government Policy & Regulation:
Some of the external factors for CCG come from regulatory bodies such as Care Quality Commission & Social Services. These regulate how the organisation needs to work and be set up to be compliant. HR role within the business is to ensure that all P&P’s are up to date and reviewed annually and that staff clearly knows and adheres to all rules and regulations.
These regulatory bodies affect the way the business work and include the following: staff specialist training, DBS checks, minimum staff requirement per number of residents, standard of living environment and even goes as far as choice of menu and activities offered within the Care Homes.

• DBS checks must be performed for each new employee joining the business. This can be a huge financial impact for the company. If the recruitment & selection do not go as they should, i.e. the new employee may leave within few days from the start date, it could have a significant negative impact over the financial aspect. HR must ensure that the managers and administrators are capable of and well prepared for the recruitment process as well as introduced to recruitment law. It is crucial to retain the workers within CCG as the Service Users are always in the centre of organisation. Bad recruitment can lead to frequent staff changes which will affect well-being and comfort of Residents.
• Number of skilled staff – CQC regulations state minimum acceptable number of workers dependant on the number of service users. It is very important that staff skills are reviewed annually and training matrix is in place for each individual employee. Investing in staff training is very important as it brings up the morale within.

Both examples have a huge impact on HR and determine, if the organisation runs smoothly. DBS checks as well as mandatory training may take a long time and the individual is not allowed to start work without these. Therefore it is very important that the HR is prepared for such situations and always have a backup plan in place. Monitoring staff turnover within the group, having training matrix in place, supervisions and annual appraisals as well as wage reviews help the staff retention creating better working and living environment.
SWOT Analysis (2.2)
SWOT analysis is a very useful technique which allows to identify strengths and weaknesses of the business (these usually relate to internal factors) and threats and opportunities (relating to external factors). The technique which was formulated in 1960s remains as useful as it was then.
SWOT analysis have their disadvantages and therefore cannot be solely used within the organisation. Some of the external factors can be easily missed out therefore making business vulnerable. Other tools, such as PESTLE/ TIDES or Porter’s Five Forces to name the few, must be used.
CCG: SWOT Analysis (2.2)
Using SWOT analysis allows CCG to look at the business as well as other Care Homes in the country and helps us to distinguish ourselves from others by helping the strategy formulation. After analysing SWOT of CCG I have looked at strengths and weaknesses internally and the opportunities & threats externally. You can see full SWOT analysis in Appendix 1.
CCG Internal business Factors in terms of SWOT (2.2)
The key to business success is to have a good understanding of its internal factors. The internal factors, unlike the external ones, are the factors that company has control over. These include communication, the strength of employees and employee value, culture, management structure.

“The strength of employees is also an essential internal business factor. Check if employees are motivated, hard-working and talented. They will produce better results compared to an unmotivated and less talented workforce.” (Pestle analysis, February 2015)

Changing employee expectations, new technologies, increasing globalisation and a need for agility in the face of a turbulent business environment mean that tomorrow’s workplace will be barely recognisable from today. HR will need to respond accordingly.
KEY FORCES WHICH SHAPE THE HR AGENDA (2.1)
Business issues & external factors shaping HR strategies & practices (2.1, 2.3)
Some of the external forces that shape the HR agenda are economic trends, constant changes in Health sector & competition.
CCG must have a very distinctive identity which makes the organisation unique within the Care Home Industry.
Raising expectations of the residents and their families as well as competition that offer similar services at lower rates means that CCG needed to look further into the products & services they’re offering. This resulted in a more intelligent recruitment with more skilled staff being hired to ensure that the care given to customers is at the highest possible level. To ensure this is happening HR and management work closely together.
HR managers should ‘outline new practices in order to deal with competition’ (Armstrong 2006, p. 53).
Organisational and HR strategy formulation (2.3)
There are several steps when it comes to strategy formulation. It is a very difficult process to come up with a hearty HR strategy which will be vigorous yet significant. By utilizing a streamlined procedure, by completely understanding your association\’s needs and by being able to choose the most basic HR segments, strategy formulation can be made a lot easier.
According to Personnel Today there are 8 steps in strategy formulations and these include

1. Aligning Business and HR needs
2. Developing HR Strategy
3. Organisational Performance
4. Organisational design and structure
5. Strategic Resourcing
6. Organisational Development
7. Compensation and Benefits
8. Organisational Culture.

Although not all of the above steps are required in order to formulate a strategy in each organisation they do give a good outline on what need to be looked at. Then the chosen steps can be followed in order to finalise robust HR strategy.
Bamberger and Meshoulam (2000) coordinate the two primary models of HR procedure , one approach concentrating on rationale of administrative control , other concentrating on the acquisitions of workers . These two measurements have four diverse perfect sorts of predominant HR system.

• Commitment
• Collaborative
• Paternalistic
• Traditional

• The commitment HR strategy puts it main focus on development of worker and result control
• Collaborative strategy is concentrating on the association subcontracting work and the execution of the organisation
• Traditional is concentrating on worker abilities
• Paternalistic provides learning opportunities and promotion internally

Impact of business issues & external factors on HR in CCG vs Strategy formulation (2.3, 2.4)
External factors & business issues such as staffing, mandatory training, political situation i.e. Brexit have got a huge impact on HR and its strategy formulation.
Staffing: Performance Review Procedure
Performance management is very important therefore quarterly supervisions and yearly appraisals are taking place within each CCG Home. The crucial part of this procedure is hearty performance review process which provides individuals criticism about what has been accomplished well and not so well. Self-appraisal forms also play a very important role in this process as the individual is able to express and explain the areas in which he or she feels an extra training or help should be provided.
Overall the Performance Review Procedure allows staff, managers and senior management to see employees strengths and weaknesses and provides grounds to act upon those to strengthen the overall organisational performance.
PESTLE analysis: Changes in the business environment affecting the HR within organisation (2.2)
PESTLE analysis is a strategic tool and is classed as the most effective measure in analysis of external factors affecting the business.
The PESTLE framework includes the most important external factors that can affect the business: Political, Economic, Social, Technological, Legal and Environmental (Grant, 2008)
Example PESTLE analysis:
PESTLE analysis of CCG (2.2)
PESTLE analysis allow HR within CCG to formulate strategies and adapt to current global situations. Please see the Appendix 2 for Full PESTLE analysis of CCG
Political:
Current political situation and BREXIT put an enormous uncertainty for Social Care. Main issues include Staffing, Assessing Treatment in and outside of UK, Regulations, Cooperation between countries, Funding and Finance.
Although not all of the above will have a direct connection to CCG I must emphasise that Staffing and Funding & Finance may cause a lot of issues.
Staffing:
EU regulations and the act of freedom of movement allowed a lot of qualified nurses & social care workers to legally work within UK.

“This includes 55,000 of the NHS’s 1.3 million workforce and 80,000 of the 1.3 million workers in the adult social care sector (Health and Social Care Information Centre 2015; Skills for Care 2016).”(The Kingsfund June,2016)

CCG is proud to have employees from EEU and all around the world. A lot of qualified nurses and social care workers come from outside UK but also maintenance, housekeepers and cooks.
Some of the key roles within the homes are taken care of by these workers and BREXIT may become a huge issue for the organisation. The uncertainty which comes with this puts a lot of pressure on business and HR. No one is sure of what to do until the government clarifies its intensions in regards to European workers employability.
Funding & Finance:
Vote leave was supposed to bring over £100 million back to NHS and Social Care funding every week. These big statements have however disappeared from headings in newspapers and television after the referendum.
Care Homes within UK are struggling. A lot of Homes are closing, prices for private residents are rising and the care itself is going downhill.
Local authorities pay as little as £330 per week per bed. This amount does not cover the costs of living in any Care Home.

“2016/17 is already set to be a very challenging year for the NHS, with service leaders facing huge financial pressures and performance against key targets deteriorating” (The Kingsfund June,2016)

CCG is a privately owned business closely working with Local Authorities. The residents’ wellbeing has always been and will be the main focus.
Current funding situation has made the HR within the group to decide on the number of beds allowed to be given to funded residents. This is not ideal situation as there might be elderly people which need help and there might be empty beds that are not allowed to be given to them due to inappropriate funding. This puts a lot of pressure on Home Managers. This however ensures that the correct balance is applied between Social Care and Private funded rooms. This allows the Care Homes within the group to provide care and services to all residents at highest possible level.
Technological:
Technology is also a very important external factor which affect the way the Care Homes work. Current demand for daily forms from regulatory bodies puts a big strain on care staff. Introducing tablets and smart phones to complete daily paperwork improves overall performance. Completing daily paperwork can be mundane and time consuming not leaving enough time to provide efficient care to residents. This is definitely the way forward and started to be implemented in first homes within the group.
Clock in & out devices which calculate monthly payroll, staff sickness and absences also improved performance. Since phasing out the paper payroll managers had more time to focus on their staff & residents and review internal needs of each individual care home.
Technology is the way forward also when it comes to aging population. Countries around the world are puzzled on how to care for growing population of older people. Japan is one of the best examples with 20% of population being over the age of 65. “To address the issue, Japanese companies are leading in the development of Carebots.”(Business Insider, November 2015)
Other external factors include current market, economy, politics, environmental changes and many more. These can be analysed using various tools which I will describe and analyse later.
TIDES analysis: (2.2)
Dr. Graeme Coddington (Kingfisher coaching) identifies TIDES of change for HR. Technology, Institutional Change, Demographics, Environment & Ethics, Shifting Social Values.
Shifts in demographics are rapid. With the aging population and obdurate shift in social values it is important to attract young adults willing to learn the vocation. CCG promotes apprenticeship and works closely with college providers.
This however can be risky, “younger workers may seem to be less vested overall with their jobs, wanting to leave once they have put in their hours for the day” (Hiring Scienses, October 2014)

“Over half (51 per cent) of bosses said it was difficult to find and retain millennial workers because they expected more from their employers.”(People management Vicki Arnstein 29 Jan 2016).

It is therefore important to have balanced workforce within each sector with a good amount of skilled workers across all groups of age and sex. We cannot forget the Equality & Diversity Act 2010 and HR needs to ensure that creation of all new strategies and Policies & Procedures takes it under consideration at all times.
PESTLE and TIDES techniques support the overall business analysis and allow HR to see the business performance in more ways. Using more than one technique means that HR at CCG is ready to respond effectively and rapidly in every situation depending on current economic, political & environmental state.
Analysis of all those factors allow HR within CCG to formulate strategies and adapt to current global situations.
HR’s role in response to the changing Business Environment factors / PESTLE (2.4)
HR needs to respond accordingly and act fast with regards to changes in Business environment and PESTLE factors. There is far more involvement from HR that just hiring and firing. HR needs to make sure that all external factors are listened to and addressed.
Competition:
One of the biggest external factors is competition. Within SWOT analysis competition may be classed as threat or weakness. With current economy, technology advancement and environmental changes competition plays a big role in Care Home industry. More and more Care Homes open with more advanced technological functions and even though the reputation of CCG is very high within Local Authorities and Social Services HR needs to make sure that CCG stays unique and attracts new Service Users as well as ensures that current residents stay at the Care Homes.
HR must promote ethics and accountability while shaping its procedures.
Ethics:
When shaping new procedure HR must ensure this is done in ethical way. HR needs to follow Codes of Conduct, Employment Laws and Equality & Diversity Act (2010) at all times.
It is also very important to mention Corporate Social Responsibility (CSR). CSR has got many different definitions and differs from one business to another.

“CSR has been defined by the World Business Council for Sustainable Development (2000) as: “The continuing commitment by business to behave ethically and contribute to economic Social development while improving the quality of life of the workforce and their families as well as the local community and society at large”

HR should take the following issues into account as well while implementing new strategies and procedures: human right, environmental changes i.e. pollution & climate change and sustainable development.
Accountability:
Accountability is very important in strategic planning. Every sector within the organisation should have someone to report to and be accountable to as otherwise it may mean that the set goals are drifting farther away and the goals to be achived never meet the target.
Critical Success Factors (CSF) and Key Performance Indicators (KPI):
To meet the set goals each organisation need to determine its CSFs. To achieve the CSF there should always be assigned leader steps and tasks to be followed and KPIs.

“KPIs track the quantitative progress or effectiveness of a CSF in achieving a measurable target. For example, increased margins may be measured by KPIs such as reduced expenses per adjusted admission, reduced readmission penalties and shorter length of stay.”(Becker’s Hospital Review, June 2013)

Very simple way of tracking performance and to see if employees are achieving their goals, KPIs and CSFs is implementing the automated system which will help to track the progress of all of the above and this is the way the accountability should be built into the strategic planning.
9.12.2016