HRM Challenges and Strategies for Australian Healthcare Industry

This report provides a comprehensive analysis of the human resource management challenges currently facing the Australian healthcare industry. The report highlights two primary issues: the shortage of nursing staff and the rising labor turnover rates. It explores the factors contributing to these challenges, such as an aging population, increased demand for healthcare services, and difficulties in retaining existing employees. The report then delves into strategic human resource management (SHRM) models, specifically the Harvard map of HRM, to assess the industry's current state. Finally, the report proposes several strategies to address the identified challenges, including workforce planning, improved recruitment and selection processes, referral-based systems, and strategies to improve employee retention. The report emphasizes the importance of proactive HRM to ensure the long-term sustainability and success of the Australian healthcare sector.

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Table of Contents
Introduction.......................................................................................................................3
Human Resource Management....................................................................................................3
Australian Health Care Industry...................................................................................................3
Upcoming Human Resource Management Challenges in Australian Healthcare Industry....4
Shortage of nursing staff..............................................................................................................4
Rising labour turnover rates.........................................................................................................5
SHRM Models (Harvard Map of HRM)................................................................................5
Addressing Issues Related to Australian Healthcare Industry.............................................6
Conclusion.........................................................................................................................9
Bibliography.....................................................................................................................10

Introduction
Human Resource Management
Human resource management is a concept that has gained widespread popularity in the past
few decades. Human resource management aims at optimising the performance of the
workforce of business organisations by providing the employees with a better work
environment and by establishing better employee-employer relations (Hendry, 2012). To
achieve its objectives, human resource management relies upon a number of core functions,
such as recruitment and selection, performance management, training and development,
career development, etc. and non-core functions, such as motivation, attraction and retention,
etc.
Due to the spread of globalisation and liberalisation, the business world has become a smaller
place and it has become easier for companies to enter into foreign markets and establish
relations with others. Business organisations have become vulnerable to a number of micro
and macro environment factors, which can undergo changes in real time and can force
business organisations to implement changes in the workplace. Such changes in the
environment are also having an impact on the management of human resources in almost all
business sectors (Bodi, 2017). Health care industry is no exception and is facing a significant
number of challenges when it comes to the management of human resources working in the
health care sector. Therefore, in this report, we will discuss two major human resource
management challenges that the health care centres of Australia are most likely going to
experience in the years to come and consider strategies that would be helpful in addressing
the challenges.
Australian Health Care Industry
In a Census conducted by the Australian Bureau of Statistics in 2016, healthcare was found to
be the largest industry in Australia. The Australian healthcare industry consists of numerous
health care and social assistance sectors, hospitals, aged and child care centres. Healthcare
industry employs 12.6% of Australia’s total population. In the last five years alone, the
Australian health care industry has grown by 15.7% while the total number of people
employed in the industry grew from 1.2 million in 2011 to 1.4 million in 2016 (Business
Services , 2018). It has been identified that the ageing population in Australia in combination

with an expansion in the private health insurance coverage, the demand for healthcare
services is going to get stronger in the years to come (IBIS World, 2018).
Upcoming Human Resource Management Challenges in Australian
Healthcare Industry
Healthcare industry is one of the most important industry in an economy as it not only
provides employment but is also necessary for the well-being of the society. For the
betterment of the society, it is important that the healthcare industry of a country offers high
quality healthcare services to its customers. The changing environment trends are bringing
about a significant number of changes in the healthcare industry and are making human
resource management difficult for the managers. Two of the most important human resource
management issues that the Australian healthcare industry is most likely going to face in the
near future are discussed below:
Shortage of nursing staff
The first and the most important challenge that the human resource managers working in the
Australian healthcare industry will have to address in the coming years is related with the
shortage of healthcare staff. During 2012, the number of hospitals that were experiencing a
shortage in the nursing staff was estimated at 4.8 percent while the number jumped up to
32.9% by 2016, which is alarming for human resource managers working in the industry. The
Bureau of Labour Statistics has projected that by the end of 2022, there will be a vacancy of
almost 1.2 million nursing positions (Bamboohr, 2017). The Australian healthcare industry is
not an exception to this human resource management challenge. The government of Australia
continuously carries out studies and researches to identify shortage of labour and skills in the
Australian Labour Market and the shortage of nursing staff in the Australian healthcare centre
has been a major concern for the government in the past few decades. In a report published
by Australia’s future health workforce, published in 2014, the department of health forecasted
a the shortage of nursing staff in the Australian healthcare industry to reach 85,000 by 2025
and to 123,000 by the end of 2030. According to reports, in the years to come, the Australian
health care industry will not be having sufficient number of healthcare professionals to satisfy
the healthcare demands of rapidly growing Australian population. The situation is so
alarming for the government of the country that nursing has been added to the national list of

identified skill shortage and any nursing migrant applying for a temporary work visa in
Australia can work in the industry for a period of up to four years (Healthstaffrecruitment,
n.d.).
Rising labour turnover rates
The second major challenge that the Australian healthcare industry is most likely going to
experience in the coming years is related with the turnover rates of the employees. In addition
to workforce shortages in hospitals, healthcare centres, clinics, etc. the healthcare industry is
also struggling to retain its existing workforce or staff members that it already has. Thanks to
the ageing baby boomers, the demand for healthcare services is so high in Australia that the
nursing employees have so many job openings for them that it has become too easy for them
to make a shift in case they are not happy or satisfied with their jobs. In the past six years
alone, the turnover rates of registered nursing staff have gone up from 11.2% to 17.2% and
these numbers are going to increase even more in the years to come (Bamboohr, 2017). This
alarming situation is costing millions to the Australian healthcare centres. It has been
discovered that the cost associated with replacing a nursing staff is almost equal to his or her
half year salary, which implies that for companies operating in the Australian healthcare
industry, it will cost them around $5M to compensate for the labour turnover rates.
The problem of increasing labour turnover rates is becoming worse because of the inability of
Australian healthcare companies to invest heavily in the planning of their human resources.
Human resource planning is a concept that allows business organisations to forecast
workforce demand and supply patterns for their subsidiaries based on information and data
available from the past as well as from the present (HRO, 2016). By conducting careful
research and studies, human resource managers are able to accurately forecast the human
resource demand that their company is most likely going to experience in the coming years
and can consequently think of strategies to fulfil the demand and to avoid staff shortage. The
process of human resource planning involves heavy investment and a lot of time, which most
of the Australian healthcare industries are not able to manage.

Therefore, these two issues are the two biggest challenges that the Australian healthcare
industry has started facing right now and the situation will continue to become worse if it is
not properly dealt with.
SHRM Models (Harvard Map of HRM)
Strategic human resource management, also known as SHRM, is a new concept that aims at
strategically aligning the human resource practices of a company with its goals and
objectives, in order to achieve the best possible results. Strategic human resource
management has gained a lot of importance because it is aimed at developing human resource
managerial strategies for a longer run, which can allow business organisations to optimise
their workforce performance levels.
One of the most commonly used models in strategic human resource management is the
Harvard map of human resource management. According to this model, employees are an
important resource for business organisations but are fundamentally different from other
resources, which makes it crucial that they are managed in a totally different manner. In this
model, there are four human resource policy areas that require the focus of human resource
managers, which are:
1. Human resource flows  recruitment, selection, appraisal, promotion, termination, etc.
2. Reward systems  compensation and benefits, motivation, pay, etc.
3. Employee influence  authority, empowerment, responsibility, etc.
4. Work systems  definition of work, design of work, alignment of people, etc.
With proper human resource management practices and policies (mentioned above), it can
become easier for the managers to achieve the four C’s or commitment, congruence,
competence and cost effectiveness, which all are some of the most essential elements for
achieving organisational success (Price, n.d.).
Using this model to assess the situation of Australian healthcare industry, it can be seen that
the industry is most likely experiencing issues in the first stage itself. The issue of staff
shortage and high labour turnover ratios are related to human resource flows and will
definitely make it difficult for the organisations to achieve the four C’s that are necessary for
achieving organisational success. Therefore, there is a high probability that most of the

Australian healthcare companies will lose the competition in the market and will have to
experience failure because of the ongoing human resource management issues.
Addressing Issues Related to Australian Healthcare Industry
From the above information, it can be clearly stated that shortage of nursing staff and the ever
increasing employee turnover ratios will become a major issue in the Australian healthcare
industry. Therefore, it is important for the human resource managers working in the
Australian healthcare industry to come up with certain strategies that would enable them to
deal with such issues. Some of such strategies are discussed below:
First of all, human resource planning or workforce planning should be treated as the need of
the hour by Australian healthcare managers. Human resource or workforce planning will
allow them in forecasting the workforce demand of their subsidiaries by taking past and
present workforce data into account. Workforce planning will allow them to identify
vacancies that the organisation is most likely going to experience in the years to come and
prepare plans to fulfil the vacancies identified (Rose & Rensburg-Bonthuyzen, 2015). By
investing time and resources in workforce planning, Australian healthcare industries will be
able to reduce situations of surplus workforce or shortage of workforce.
Secondly, Australian healthcare companies will have to strive hard to attract fresh and
talented tool of employees in the market by establishing a better image as an employer.
Human resource managers need to make their recruitment and selection programs more
efficient. One of the best strategies to attract a greater pool of talent is to avoid ‘Purple
Squirrel’ Syndrome (Forbes Coaches Council , 2016). Purple Squirrel Syndrome is a
condition when the employers end up advertising their jobs as unrealistic by adding too many
job roles and responsibilities. Such actions can make it difficult for healthcare companies to
attract a larger pool of talent, which can lead to shortage of staff in the workplace.
Thirdly, using a referral based system can also help Australian healthcare organisations in
dealing with issues related to staff shortages. Referral system is one of the most reliable
strategy that can help in attracting a greater pool of talented employees in industries where
there is labour shortage. Another benefit of a referral system is that it is less time consuming
and can assist business organisations in recruiting talented and experienced employees from

the industry (Naylornetwork, 2011). To promote referral system in the organisation,
Australian healthcare industries can offer rewards to those employees who will be able to
assist the managers in recruiting employees by referring candidates.
Fourthly, to deal with high labour turnover ratios in the healthcare industry, the human
resource managers working in the Australian healthcare centres will have to strengthen their
recruitment and selection process and carefully screen the candidates who apply for vacant
job positions. The human resource managers should be efficient enough to recognize the right
candidate for the right job and assess his tendency to quit his or her existing company in
exchange for a higher salary or benefit package. Such a strategy would help human resource
managers in recruiting the right people who will show a greater commitment towards their
organisation.
Fifthly, onboarding should be given a lot of importance by human resource managers
working in the Australian healthcare industry, Onboarding is a process that involves
integration of new employees in the workplace by making them undergo training and
development program, also known as an initial orientation program. It has been found that a
well-planned onboarding program can help business organisations in converting their new
recruits to dedicated employees in the workplace.
Sixthly, human resource managers working in the Australian healthcare industry will have to
work harder to make work conditions better for the nursing staff. The human resource
managers can conduct regular survey and interviews to assess employee grievances and take
necessary actions to deal with their problems. They can also make arrangements for certain
on-the-job welfare activities for the nursing staff because in the nursing profession, there is
constant pressure on the employees and welfare activities can help them in reducing their
stress levels. Such strategies will make the employees feel that their organisation values them
and they are more likely to become committed to their organisations, which will be helpful in
bringing down the turnover rates.
Lastly, employee engagement should be the priority of human resource managers working in
the Australian healthcare industry. As healthcare organisations are required to operate 24
hours a day, it is important for human resource managers to ensure employee engagement
throughout these 24 hours and not just be focused on engagement during the daylight hours.

The managers of healthcare organisations should foster a positive culture in the workplace
and make the employees feel that the health of their patients is of an utmost value to their
employer. The organisations should further ensure that the work for the nursing staff should
be interesting and not a burden (Warren, n.d.). They should be given an opportunity to
balance their personal lives and work lives so that they can stay away from stress and are
completely indulge in their work while at their jobs. Implementing such strategies can help
healthcare organisations to ensure employee engagement at all levels of an organisation,
which will help them in dealing with high labour turnover ratios.
Conclusion
The changing market trends in the healthcare sector will have a huge impact on the
Australian healthcare industry. Staff shortages and high turnover ratios are two issues which
will have some serious implications for the Australian healthcare industry if they are not
properly dealt with and will make it difficult for a large number of healthcare organisations to
offer quality healthcare services to their patients.
Therefore, it is important for human resource managers operating in the Australian healthcare
industry to look into the issues discussed above and come up with suitable strategies to deal
with such issues.

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