HUMAN RESOURCE PLANNING PROCESS

CHAPTER 2Slide editing by : mursyida mahshar

HRP (Definition)

• Process of analyzing and identifying the need for and availability of HR so that the org. can meet its objectives or

• Process that helps to provide adequate HR to achieve future organisational objective.

• It will include ; forecasting future needs for employees of various type, compare these needs with the present workforce and determine the no. or types of employees to be recruited into or phased out.

• Small Business and HR Planning Issues– Attracting and retaining qualified outsiders– Management succession between generations

of owners– Evolution of HR activities as business grows– Family relationships and HR policies

Issues in forecasting HR requirements:• Increasingly of service oriented• Increasingly economy based on technology• Teams becoming more widely used• Needs for fewer managers with increasing

technology

Issues in HR availability:• Management inventories• Succession planning• Skill inventory• External labor supply

Purpose of HR Planning

Benefits of HR Planning

• Better view of the HR dimensions of business decisions

• Lower HR costs through better HR management.

• More timely recruitment for anticipate HR needs

• More inclusion of protected groups through planned increases in workforce diversity.

• Better development of managerial talent

Linking HRP & Strategy for Competitive advantage

Strategy of organization

Culture of organization

Need for HR Qty & Skill Levels

Competitive / Fin. Advantage

Current organization structure

Available Financial Resources

HR Plans and Policies for:

Performance mgmt Recruiting

Selection Staffing mgmt

HR DevelopmentCompensation

HR Strategies

• Cost Leadership– Competition on the

basis of low price and high quality of product or service

– Relies on “building” employees to fit specialized needs

– Requires a longer HR planning horizon approach

• Differentiation– Competition on the basis of

either offering distinctively different products or services or establishing an exclusive image for quality products and services

– Relies on hiring needed skills.

– Needs a shorter planning time frame in order to be responsive to dynamic environments.

HR Strategies

Organizational Strategies

Strategic Focus

HR Strategy HR Activities

Cost Leadership

EfficiencyStabilityCost control

Long HR planning horizonBuild skills in existing employeeJob & employee specialization efficiency

Promote from within Extensive training Hire & train for specific capabilities

Differentiation

GrowthInnovationDecentralization

Shorter HRP horizonHire the HR capabilities neededBroader, more flexible jobs & employee

External staffingLess training Hire & train for broad competency

HR Responsibilities

• Top HR executive and subordinates gather information from other managers to use in the development of HR projections for top management to use in strategic planning and setting organizational goals

HR Unit Managers- Participates in strategic planning process.- Identifies HR strategies.- Designs HRP data systems.-Compiles and analyzes data on staffing needs.

-Identify supply and demand needs for each department.-Review / discuss HRP info. With HR specialists.-Integrate HR plan with departmental plans.-Monitor HR plan to identify changes needed.

SP – The process of determining what org.’s mission and plan to achieve organisational goals.

HR Planning Process

HRP Process

ENVIRONMENTAL SCANNING & SITUATIONAL ANALYSIS

FORECASTING THE DEMAND AND SUPPLY OF HR

DEVELOPMENT OF PLANS FOR ACTION

Scanning the External Environment

• Environmental Scanning– The process of studying the environment of the

organization to pinpoint opportunities and threats.

• Situational Analysis – HRM compares needed and available skills for

training, promotion, transfer, productivity improvement and succession planning.

• Environmental Changes Impacting HR– Governmental Influences– Economic conditions– Geographic and competitive concerns– Workforce composition

Assessing the Internal Workforce

• Jobs and Skills Audit – What jobs exist now?– How many individuals are performing each job?– What are the reporting relationships of jobs?– How essential is each job?– What jobs will be needed to implement future

organizational strategies?– What are the characteristics of anticipated jobs?

Assessing the Internal Workforce (cont’d)

• Organizational Capabilities Inventory– HRIS databases—sources of information

about employees’ knowledge, skills, and abilities (KSAs)

– Components of an organizational capabilities inventory• Individual employee demographics• Individual employee career progression• Individual job performance data

Forecasting HR Supply and Demand

• Forecasting– The use of information from the past and

present to identify expected future conditions.

• Forecasting Methods– Judgmental

• Estimates—asking managers’ opinions, top-down or bottom-up

• Rules of thumb—using general guidelines• Delphi technique—asking a group of experts• Nominal groups—reaching a group consensus

in open discussion

Forecasting HR Supply and Demand (cont’d)

• Forecasting Methods (cont’d)– Mathematical

• Statistical regression analysis (statistic compares the past r/ships among various factors)

• Simulation models (representation of real situations in abstract form)

• Productivity ratios—units produced per employee• Staffing ratios—estimates of indirect labor needs

• Forecasting Periods– Short-term—less than one year– Intermediate—up to five years– Long-range—more than five years

HR Forecasting

Forecasting the Demand for HR

• To develop a forecast of the needs for HR by number and type for the forecasted period

• Estimate no. and type of employees for future

a) External Supplyb) Internal Supply

Demand = Supply

Forecasting supply for HR

• Forecast the availability of HR internal and external supplies.

• Use “skill inventory” : – to assess the current supply of employees

(past and present skills), used for future, and maintained through interview and questionnaires.

Estimating Internal Labor Supply for a Given Unit

Managing HR Surplus / Shortage

Action when Surplus of employeesi) Layoff - Suspension or termination of employment (with or without notice) by the employer due to management problems. (merit & seniority)ii) Early retirement – encourage employees to leave org. early.iii) Restrict Attrition & freeze hiring – not replace the jobs been left out (quit @ retire), and those remain in the co. will be given more tasks.iv) Reduced Hours of work

Suggestion to deal with downsizing Investigate alternatives to downsizing Involve those people necessary for success in the planning for

downsizing Develop comprehensive communicate plans Nurture the survivors Outplacement pays off

Action When Shortage of Employees• Promote Overtime - ask the workers to

work after the standard working hours• Hiring New employees• Hire contingent worker – subcontract,

contract, part time

• Outplacement services– A group of services provided to the displaced

employee – to give them support and assistance.

– E.g. personal career counseling, resume preparation, interviewing workshops and referral assistance.

Find information about HRIS

HRIS?