In the modern world of rapid technological advancement, the forms of competitive advantages such as equipment and innovation are easily copied. Labour becomes the basis of a firm's competitive advantage and acquiring and maintaining this type of benefit takes time and very good employment relations. Employment relations deal with the relationship between the employer and employee, a connection that is vitally important to the success of both parties and the business as a whole. This business function involves many different activities such as the human resource cycle and the rights and responsibilities of the participants of the workforce.
Employment relations is a continuous cycle of employing, training, rewarding staff and the separation of employees and the business - hence the four stages of the Human Resources Cycle. Acquisition involves identifying and employing the most suitable person for the occupation in demand and is divided into three key stages, planning, recruitment and selection.
The planning and prediction of potential employment opportunities is important to determine the amount of needed staff to fill in for the demand. Planning is done by careful evaluation and analysis of the firm's situation and its job prospects.
Recruitment involves identifying potential job candidates (internal and external) that satisfy the basic skills and qualification requirements drawn out. Internal recruitment candidates include employees that will be transferred, promoted or receives recommendations from co-workers while external recruitment sources can range from advertising to employing specialized recruitment agencies. Recruitment is different from Selection which refers to the final decision that chooses the best person suitable for the job. The success of selection is dependent on the effective of recruiting, since the employee is picked out of the group of potential candidates. The effect of recruiting the wrong people for selection can reduce the ability to find a suitable individual.