Hrm-human Resource Planning

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HUMAN RESOURCEPLANNING


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Introduction

Success in business is dependent on: Reacting quickly to opportunities

Rapid access to accurate information

Human resource planning (HR planning): How organizations assess the future supply of,

and demand for, human resources

Provides mechanisms to eliminate gaps that may

exist between supply and demand Requires readjustment as labor market conditions

change


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Introduction

The types of people employed and thetasks they perform determine the kind of

planning necessary

HR planning is critical for implementation of the

organizations strategic plan HR policies have direct effects on profitability

Strategic human resource management

(SHRM) means acknowledging that HRpolicies/practices have critical links to an

organizations overall strategy


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Definitions of HR Planning

strategy for the acquisition, utilisation,improvement and preservation of an

organisations human resources

(Department of Employment 1974)

(cited by Bratton and Gold, 2003, p194)

the process for identifying an organisations

current and future human resource requirements,

developing and implementing plans to meet these

requirements and monitoring their overall

effectiveness

(Beardwell and Claydon, 2007, p159)


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Objectives of human resource planning

Forecast personnel requirements

Cope with changes

Use existing manpower productively

Promote employees in a systematic way

Importance of human resource planning

Create a talent pool

Prepare people for future

Cope with organizational changes

Cut costs

Help succession planning


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EFFECTIVE HR PLANNING

Effective HR Planning ensures that:

the available talent is correctly allocated

labour costs are controlled

employee numbers are appropriate

productivity is improved

talented employees are retained


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ORGANISATIONAL STRATEGY

AND HRP


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The HR Planning Process

The four phases or stages of HRplanning:

Situation analysis or

environmental scanning

Forecasting demand

Analysis of the supply

Development of action plans


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Technological forecasts

Economic forecasts

Market forecastsOrganizational Planning

Annual operating plans

Annual Employment

Requirements

Numbers

SkillsOccupation

categories

Existing employment

Inventory after

application of

Expected lossAnd attrition rate

Strategic Planning H R Demand HR Supply

Compared

with

Variances

If surplus

EndEnd

If shortage

End

Decisions

Overtime

Recruitment

Decisions

Layoffs

Retirements

Ifnone

Human Resource Planning Process


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Situation Analysis & Environmental

Scanning

The first stage of HR planning is the point at which HRM andstrategic planning first interact

The strategic plan must adapt to environmental

circumstances

HRM is one of the primary mechanisms an organizationcan use during the adaptation process

Without a plan to support recruitment and selection, it is

impossible to stay competitive

The problems associated with changing environments are

greater today than ever before

Success now depends on being a global scanner


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Forecasting Demand for Employees

This phase of the process involves estimating: How manyemployees will be needed

What kindsof employees will be needed

Quantitative tools can help with forecasting, but it involves a

great deal of human judgment The demand for employees is closely tied to the strategic

direction that the organization has chosen

Growth

Reengineering Reorganization


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Forecasting Demand for Employees

Techniques to help reduce the uncertaintyinherent in HR planning:

Expert estimates

Trend projections

Statistical modeling

Unit-demand forecasting

Key to effective planning is accurately and

freely sharing information


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The Expert Estimate

One or more experts provide the organization with demand

estimates based on:

Experience

Guesses

Intuition

Subjective assessments ofavailable economic and

labor force indicators

This is the least mathematically sophisticated

approach


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The Expert Estimate

The Delphi technique elicits expert estimates from a

number of individuals in an iterative manner

Developed by the Rand Corporation

Estimates are revised by each individual based on

knowledge of the other individuals estimates

With the nominal group technique (NGT), individual

estimates are followed by group brainstorming

The goal is to generate a group decision that is preferred

over any individual decision


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Trend Projection

This top-down technique:

Develops a forecast based on a

past relationship between a factor

related to employment andemployment itself

Example: Sales levels are related

to employment needs


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Modeling & Multiple-Predictive Techniques

This top-down approach uses the most

sophisticated forecasting and modeling

techniques

Trend projections relate a single factor, such as

sales, to employment Environmental factors could be gross national

product or discretionary income

Or, the organization may be mathematically

modeled so that simulations can be run


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Modeling & Multiple-Predictive Techniques

Markov chain analysis involves:

Developing a matrix to show the probability of an

employees moving from one position to another

or leaving the organization

The process begins with an analysis of staffinglevels from one period to another

Markov analysis can identify the probability of

lower employee retention

It does not suggest a solution to the problem


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Modeling & Multiple-Predictive

Techniques Regression analysis is a mathematical

procedure:

It predicts the dependent variableon the basis of

factors (independent variables)

With simple l inear regression, one dependent andone independent variable are studied

With multiple regression, more than one

independent variable is studied


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Unit Demand Forecasting

This is a bottom-up approach

Unit managers analyze current and

future needs person-by-person

and job-by-job

Headquarters totals the unit forecasts

The sum is the corporate employment forecast

If both bottom-up and top-down approaches are used,

the forecasts may conflict

This can be resolved by averaging the variances

The Delphi technique or NGT could also be used


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Analyzing the Current Supply of Employees

This phase of HR planning should answer the

question:

How many and what kinds of employees do I

currently have, in terms of the skills and training

necessary for the future?

This involves more than simply counting current

employees

The smaller and more centralized the

organization, the easier it is to conduct a skillsinventory


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Important barometers of labour supply1. Net migration into and out of the area

2. Education levels of workforce

3. Demographic changes in population

4. Technological developments and shifts

5. Population Mobility

6. Demand for specific skills

7. National, regional unemployment rates

8. Actions of competing employers

9. Government policies, regulations, pressures

10. Economic Forecasts for the next few years

11. The attractiveness of an area

12. The attractiveness of an industry in a particular place


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The Skills Inventory

Both a skills inventory and a management

inventory:

Identify the skills, abilities, experiences, and

training employees currently have

Are useful for career planning, managementdevelopment, and related activities

In its simplest form, a skills inventory is a list of:

Names

Characteristics

Skills


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Contents of the Skills Inventory

The only data available to the organization for

later use is what was designed into the system

Name Employee number

Present location Date of birth

Date of employment Job classification

Skills, knowledge, education Foreign language skill

Professional qualifications Publications

Licenses and patents Hobbies

Supervisory evaluations Salary range


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Action Decisions in HR Planning

After the supply of and demand for workers has beenanalyzed, the two forecasts must be compared

Whenever there is a gap between the two estimates, a

course of action must be chosen

If the supply of workers is less than the demand:

It can be filled with present employees who are willing towork overtime

If there is a shortage of skilled employees:

Train and/or promote present employees

Recruit less-skilled employees

Recall employees who were previously laid off


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Possible solutions to an employee surplus:

Attrition

Early retirements

Demotions

Layoffs Terminations

Employees who are considered surplus are

seldom responsible for the conditions leading tothe surplus


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Formulating HR Plans

Once supply and demand for labour is known adjustments can bemade formulating requisite HR plans

A variety of HR plans

Recruitment plan Redeployment plan

Redundancy plan

Training plan

Productivity plan

Retention plan


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Effective Human Resource Planning

HR plans must fit in with overall objectives of a firm. They

must get consistent support from top management.

Computerized human resource information systems must

be used for applicant tracking, succession planning,

building skills inventories etc. The whole exercise must be

carried out in coordination with operating managers.

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Hrm-human Resource Planning