Report: Human Resource and Financial Management of Body Shop

This report delves into the human resource and financial management strategies employed by The Body Shop, a multinational cosmetics company. It examines the company's recruitment strategies, focusing on how they attract and retain talented employees through compelling job descriptions and online resume checks. The report also analyzes the training and development strategies used to enhance employee skills. Furthermore, it explores the company's reward systems as a motivational tool. On the financial front, the report assesses The Body Shop's financial management strategies, including an analysis of its income statement and balance sheet from 2011 to 2018. A SWOT analysis is also included, comparing the strengths, weaknesses, opportunities, and threats related to both human resource and financial management within the company. The report concludes that effective financial and human resource management are crucial for business growth, as demonstrated by The Body Shop's expansion and market performance.

Human Resource and
Financial
Management of Body
Shop

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
Human resource strategy of Body shop...........................................................................................2
Recruitment Strategy...................................................................................................................2
Training and development strategy.............................................................................................3
Reward.........................................................................................................................................3
Financial Management Strategies....................................................................................................4
Financial Statements of Body shop.............................................................................................4
Income Statement........................................................................................................................4
Balance sheet...............................................................................................................................5
SWOT analysis of Body Shop Company....................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
Books and Journal........................................................................................................................7

INTRODUCTION
Financial resources and human resources management the two most important
department of an organization on which the long term efficiency of that organization depends.
Human Resource Management helps to provide various strategies to the organization which are
required to manage the very important resource of the organization that is their workers
(Armstrong and Taylor, 2020). As working of whole organization is depend upon the finance and
it is important for the organization to formulate several strategies which help them in their
financial management. The Body Shop is a multinational company which deals in cosmetics
perfumes and skin care. Body Shop is founded in 1976 by Dame Anita Roddick in London
Bridge, UK. In the recent times, the company used to sale in the range of 1000 products which
are sold through about 3000 stores all over the world having franchised outlets in more than 65
countries. To become such a big company Body Shop understand the value of human resource
and financial resource management in the organization. This report contains human resource as
well as pressure resources strategies of the company Body Shop which helps them to achieve
great success in the market. Further, it contains the SWOT analysis on the comparison basis of
Human Resource and financial management in the organization which helps to ascertain the
strengths and weakness of both the departments in the company.
MAIN BODY
Human resource strategy of Body shop
Human resource strategy helps an organization to grow their human resource and manage them
in proper manner. It contains various steps which ensure that human resource in the organization
is properly managed. All these steps are given below:
Recruitment Strategy
Recruitment strategies refers to the formal plan of action of an organization which involve the
step like identification recruitment and higher of high quality candidates in the organization with
the purpose of filling of vacant positions (Bialowolski, Cwynar and Weziak-Bialowolska, 2020).
There are several strategies which are used by the body shop company to recruit their high

quality candidates such as by creating compelling job descriptions making use of sponsored jobs
checking of resume is which are posted online and many more. All these steps help the company
to attract most talented candidates for the company so that they can develop them for the
betterment of the company. The talented employees which are recruited for the company will
help the company to provide excellent product and services to their customers which will help
the company to grow their business. It is previously well known to everyone that talented
employees can change complete scenario and these human resources works as a backbone of the
company. In order to grow their business in the market it is essential for the Body Shop
International Company to use various recruitment strategies which will further help them to get
more talents for the company (Erdoğan, Yıldırım and Gedikli, 2020).
Training and development strategy
Training and development strategies refers to those strategies of the organization which are
involved in educational activities in the company to enhance the knowledge and skills of
employees regarding effective and better performance for a specific task. After recruiting an
employee in the organization it is essential for any organization to make them familiar about the
business in which the company deals and the process they need to follow further in future. This
requires a proper training and development to be provided to them within strategic approach to
decrease the uncertainty is which can happen related to the training and development of those
employees. As Body Shop is a Cosmetic company they need to follow a proper process in
manufacturing of their product which needs to be known to the Employees which are recruited in
the organization. In order to make them understand the whole process which is associated with
the development and process of product it is required to provide them proper training and
development programs in the organization (Kerdpitak and Jermsittiparsert, 2020). For this
purpose a company formulates a proper strategy in advance to provide better training and
development programs to their newly recruited employees and for the development of existing
one.
Reward
Providing rewards to the customer is the best strategy which can be used by the company Body
Shop to motivate their employees in the organization. Rewards are the best factor which is used
by various organizations all over the world to motivate their employees for effective working in

the organization. In the similar way body shop also use the reward strategy to motivate their
employees by providing several awards to them. These rewards can be given by the company in
cash or in types of Appraisal which helps to accomplish the basic needs of the employees and
help their family to survive.
Financial Management Strategies
Finance is the backbone of any company which helps an organization to manage their day to day
expenses and operations of the business (Muñoz-Pascual, Galende and Curado, 2020). It is
essential to formulate effective Strategies for the financial management as it will help the
company to manage the finance in effective manner. Friendship statements of Body Shop
provide a good financial management in the organization. The increase in revenue of the
organization from the year 2011 to 2018 helps to ascertain that the company has good financial
management strategies which help them to get more and more values in the organization. As
shown in the net income which was Rising in the early years that are 2011 to 2013 but later on
the decrease on a rapid pace. It shows that the expenses of the company are increasing and there
are less driven used for the company. The company needs to focus to increase net income of the
company as they are the real income for the company
Financial Statements of Body shop
Financial statement contains two main statements of an organization which helps to a shelf the
financial conditions and management strategies of the company (Strohmeier, 2020). The
financial statements that are income statement and balance sheet of the company Body Shop has
been given below which help to ascertain effective financial management strategies in the
company:
Income Statement
GBP FY, 2011 FY, 2012 FY, 2013 FY, 2015 FY, 2016 FY, 2017 FY, 2018
Revenue 332.1m 431.7m 435.7m 428.1m 754.0m 797.0m 806.0m
Revenue
growth, %
6%
Cost of
goods sold
133.8m 218.3m 216.2m 206.1m 228.0m 240.0m 194.0m
Gross
profit
198.3m 213.4m 219.5m 222.0m 526.0m 557.0m 612.0m
Gross
profit
60% 49% 50% 52% 70% 70% 76%

Margin, %
Operating
expense
total
505.0m 530.0m
Depreciati
on and
amortizati
on
8.7m 22.0m
EBIT 32.6m 37.4m 42.6m 34.0m 23.0m 29.0m 24.0m
EBIT
margin, %
10% 9% 10% 8% 3% 4% 3%
Interest
expense
2.1m 1.8m 900.0k 1.4m 4.0m 2.0m 4.0m
Interest
income
100.0k 15.5m 15.3m 6.7m
Pre tax
profit
49.3m 51.1m 57.0m 39.3m 19.0m 27.0m 20.0m
Income
tax
expense
9.3m 7.1m 10.6m 8.6m 5.0m 10.0m (4.0m)
Net
Income
40.0m 44.0m 46.4m 30.7m 14.0m 17.0m 24.0m
Balance sheet
GBP FY, 2011 FY, 2012 FY, 2013 FY, 2015 FY, 2016 FY, 2017 FY, 2018
Cash 26.0m 32.0m 18.6m 13.8m 59.0m 57.0m 106.0m
Accounts
Receivabl
e
27.4m 30.9m 77.7m 80.2m 54.0m 55.0m 41.0m
Inventori
es
65.9m 63.4m 66.5m 68.0m 90.0m 85.0m 83.0m
Current
Assets
147.4m 171.1m 169.3m 165.9m 249.0m 229.0m 261.0m
PP&E 48.0m 44.2m 42.8m 44.0m 91.0m 93.0m 77.0m
Goodwill 124.0m 121.0m
Total
Assets
413.4m 520.0m 502.0m 531.0m
Accounts
Payable
25.9m 25.8m 26.1m 87.0m 78.0m 83.0m 83.0m
Short-term
debt
3.7m 91.0m 60.0m 5.0m
Current
Liabilities
69.7m 86.0m 111.4m 96.3m 245.0m 218.0m 163.0m
Long-term
debt
7.7m 8.0m 7.0m 7.0m
Non-
Current
Liabilities
10.9m 9.3m 9.4m 13.0m 12.0m 17.0m
Total Debt 76.0m 99.0m 67.0m 12.0m
Total
Liabilities
105.7m 180.0m
Common
Stock
11.3m 11.3m 11.3m 11.3m 11.0m 11.0m 12.0m

Additional
Paid-in
Capital
75.0m 75.0m
Retained
Earnings
192.3m 194.1m 200.6m 209.8m 185.0m
Total
Equity
280.0m 286.3m 294.1m 307.7m 262.0m 272.0m 351.0m
Debt to
Equity
Ratio
0.2 x
Debt to
Assets
Ratio
0.2 x
Financial
Leverage
1.3 x 2 x 1.8 x 1.5 x
SWOT analysis of Body Shop Company
Strengths Weaknesses
 Environment friendly and skin friendly
products create a good market position
for the company.
 The company focuses on creating
products by taking into mind the
problems which are faced by their
customers.
 High prices of the product make the
company loose many customers for
their products
 With more focus on environment
friendly products company lost their
focus from their main business that is
cosmetics.
Opportunities Threats
 With the growing concern about health
all over the world it is a great
opportunities for products and services
of body shop as the company deals in
chemical free products (Strohmeier,
2020).
 Various competitiors in the market such
as Shiseido, Revlon and many more.
 High competition make it difficult to
the company to attract more and more
customers for the product.
CONCLUSION
From the above discussion it is concluded that financial management and human resource
management strategies are very essential for the growth of any business. An international
company like body shop also uses these strategies to enhance their performance in the market

which helps the company to gain most of the market and expand their business with the help of
franchise.

REFERENCES
Books and Journal
Armstrong, M. and Taylor, S., 2020. Armstrong's handbook of human resource management
practice.
Bialowolski, P., Cwynar, A. and Weziak-Bialowolska, D., 2020. Financial management, division
of financial management power and financial literacy in the family context–evidence
from relationship partner dyads. International Journal of Bank Marketing.
Erdoğan, S., Yıldırım, D.Ç. and Gedikli, A., 2020. Natural resource abundance, financial
development and economic growth: An investigation on Next-11 countries. Resources
Policy, 65, p.101559.
Kerdpitak, C. and Jermsittiparsert, K., 2020. The impact of human resource management
practices on competitive advantage: Mediating role of employee engagement in
Thailand. Systematic Reviews in Pharmacy, 11(1), pp.443-452.
Muñoz-Pascual, L., Galende, J. and Curado, C., 2020. Human resource management
contributions to knowledge sharing for a Sustainability-Oriented performance: a mixed
methods approach. Sustainability, 12(1), p.161.
Strohmeier, S., 2020. Smart HRM–a Delphi study on the application and consequences of the
Internet of Things in Human Resource Management. The International Journal of Human
Resource Management, 31(18), pp.2289-2318.