HR PLANNING & STAFFINGHR PLANNING & STAFFING

Prof. B D Singh IMT, Ghaziabad

Take away my people, but leave my factories, & soon grass will grow on the factory floors. Take away my factories, but leave my people, & soon we will have a new & better factory

Andrew Carnegie

• Strategic planning: the systematic determination of goals Strategic planning: the systematic determination of goals and the and the plans to achieve themplans to achieve them

• Business strategy plans to build a competitive focus in one Business strategy plans to build a competitive focus in one line of line of businessbusiness Strategic HRM interrelated practices, policies, and Strategic HRM interrelated practices, policies, and philosophies that philosophies that facilitate the attainment of organizational strategyfacilitate the attainment of organizational strategy

Human resource management can be viewed as an umbrella Human resource management can be viewed as an umbrella term term that encompasses the following:that encompasses the following:

- Specific HR practices, such as recruitment, selection, and Specific HR practices, such as recruitment, selection, and appraisal appraisal - Formal HR policies that direct and partially constrain the Formal HR policies that direct and partially constrain the development of development of specific practicesspecific practices- Overarching HR philosophies, which specify the values that - Overarching HR philosophies, which specify the values that inform an inform an organization’s policies and practices organization’s policies and practices

The truth is that HR has never been more necessary. The competitive The truth is that HR has never been more necessary. The competitive forces that managers face today and will continue to confront in the forces that managers face today and will continue to confront in the future demand organizational excellence. The efforts to achieve such future demand organizational excellence. The efforts to achieve such excellence – through a focus on learning, quality, teamwork and re- excellence – through a focus on learning, quality, teamwork and re- engineering – are driven by the way organizations treat their people. engineering – are driven by the way organizations treat their people. These are fundamental HR issues. To state it plainly: Achieving These are fundamental HR issues. To state it plainly: Achieving organizational excellence must be the work of HR. organizational excellence must be the work of HR.

Human capital-- the sum of employees knowledge, skills, experience, Human capital-- the sum of employees knowledge, skills, experience, and commitment invested in the organizationand commitment invested in the organization

Talent make capital dance – market move Talent make capital dance – market move

Linking HR Processes to StrategyLinking HR Processes to Strategy

1.1. Start with organizational strategy and then create HR strategy.Start with organizational strategy and then create HR strategy.

2.2. Start with HR competencies and then craft corporate strategies based Start with HR competencies and then craft corporate strategies based on these competencies.on these competencies.

3.3. Do a combination of both in a form of reciprocal relationship.Do a combination of both in a form of reciprocal relationship.

- - Corporate Strategies leads to HR Strategy – KPO, BPO, LPO etc.Corporate Strategies leads to HR Strategy – KPO, BPO, LPO etc.- HR Competencies lead to business strategy – Silicon Valley, HR Competencies lead to business strategy – Silicon Valley,

Bangalore IT Bangalore IT & ites& ites- Corporate Strategy & HR Strategy go togetherCorporate Strategy & HR Strategy go together- HR becomes business partners.HR becomes business partners. Why is HR not considered a strategic partner ?Why is HR not considered a strategic partner ?

- Top management does not consider HR as profession.Top management does not consider HR as profession.- HR professional are not considered experts in business.HR professional are not considered experts in business.- HR professional do not involve themselves in main stream HR professional do not involve themselves in main stream

business.business.- HR is considered as advisory role.HR is considered as advisory role.- It is difficult to qualify the contribution of HR.It is difficult to qualify the contribution of HR.

Are you a strategic partner?Are you a strategic partner?

1. Do you understand the business?1. Do you understand the business?- Financial parameters?Financial parameters?- Customers?Customers?- Technologies & technological change?Technologies & technological change?

2. Do you know the corporate plan?2. Do you know the corporate plan?3. Are your HR policies linked with corporate strategies?3. Are your HR policies linked with corporate strategies?4. Are major decisions made with your inputs? 4. Are major decisions made with your inputs?

So what is HR’s role in future organizations? There is no So what is HR’s role in future organizations? There is no easy answer, and yet sometimes, the answer is easy answer, and yet sometimes, the answer is something that has been staring us in the face all along.something that has been staring us in the face all along.

The passage of the employee through the The passage of the employee through the organization, aptly termed the Employee Lifecycle organization, aptly termed the Employee Lifecycle embraces talent acquisition and as talent sourcing, embraces talent acquisition and as talent sourcing, talent enabling and development; talent assessment talent enabling and development; talent assessment and reward. It is critical to have practices at each and reward. It is critical to have practices at each stage of this lifecycle that are designed to address not stage of this lifecycle that are designed to address not just the current needs of the organization, but also just the current needs of the organization, but also protect its future. Talent acquisition still means protect its future. Talent acquisition still means selecting people with appropriate abilities for each job. selecting people with appropriate abilities for each job. But with organizations working hard to reap the But with organizations working hard to reap the demographic dividend while ironically facing the most demographic dividend while ironically facing the most acute talent shortage, HR’s greatest contribution to acute talent shortage, HR’s greatest contribution to talent sourcing comes in actively developing alternate talent sourcing comes in actively developing alternate pools of talent and redefining the talent universe to pools of talent and redefining the talent universe to include sources down the educational stream or even include sources down the educational stream or even across sectors. Here it is critical to think out of the box, across sectors. Here it is critical to think out of the box, to explore recruitment on the basic tenet of the to explore recruitment on the basic tenet of the aptitude of learnability and then augment this with in-aptitude of learnability and then augment this with in-company knowledge and skills development.company knowledge and skills development.

Also of crucial importance is the need to closely align the Also of crucial importance is the need to closely align the talent demand and supply cycles to optimize costs and talent demand and supply cycles to optimize costs and improve operational efficiency. Proactive HR departments improve operational efficiency. Proactive HR departments march to the tune of constantly reviewing the cycle time march to the tune of constantly reviewing the cycle time between demand and supply of talent so that the right between demand and supply of talent so that the right person at the right place at the right time, is available with person at the right place at the right time, is available with almost Just in Time precision. It is in the area of Talent almost Just in Time precision. It is in the area of Talent Assessment and Talent Reward that HR’s contribution to Assessment and Talent Reward that HR’s contribution to future proofing can be most visibly experienced. These future proofing can be most visibly experienced. These organization clearly link organizational performance. And organization clearly link organizational performance. And so, align individual and team compensation quite clearly to so, align individual and team compensation quite clearly to organizational revenue and margins. This allows the organizational revenue and margins. This allows the organization to reward liberally in good years, but also organization to reward liberally in good years, but also tighten the belt in tough times bringing a much needed tighten the belt in tough times bringing a much needed element of variability in labor costs. Finally, in establishing element of variability in labor costs. Finally, in establishing an unambiguous link between individual career growth and an unambiguous link between individual career growth and organizational growth, HR can future proof organizations organizational growth, HR can future proof organizations from developing the proverbial bulge in the middle, so from developing the proverbial bulge in the middle, so detrimental to organizational progress. Job responsibility detrimental to organizational progress. Job responsibility needs necessarily to precede the reward of promotion, and needs necessarily to precede the reward of promotion, and that too only to the extent that is required by the that too only to the extent that is required by the organizational business model. organizational business model.

All this does not make for high scores in the popularity All this does not make for high scores in the popularity stakes. They require painstaking commitment to stakes. They require painstaking commitment to change and the ability to stay the course. More change and the ability to stay the course. More importantly, they require the movement of the importantly, they require the movement of the organizational mindset from that of a best employer organizational mindset from that of a best employer for all employees to a better employer for better for all employees to a better employer for better performers and an implementation of the vitality performers and an implementation of the vitality curve in both letter and spirit. But in the final analysis, curve in both letter and spirit. But in the final analysis, they create lean, strong organizations with a high they create lean, strong organizations with a high performance work ethic, confident of and competent performance work ethic, confident of and competent to take on the future. As the function’s famous to take on the future. As the function’s famous academic and author Dave Ulrich states “ Achieving academic and author Dave Ulrich states “ Achieving organizational excellence must indeed be the work of organizational excellence must indeed be the work of HR.”HR.”

Environmental ScanningEnvironmental Scanning

1.1. Economic climate – Huge International marketEconomic climate – Huge International market

- From industrial Revolution to knowledge From industrial Revolution to knowledge Revolution – New industriesRevolution – New industries

- Globalization – Out sourcing from low cost Globalization – Out sourcing from low cost countries,countries,

- Need for mergers with international competencies Need for mergers with international competencies

2. Labour market 2. Labour market - Global Labour market- Global Labour market- Diverse one- Diverse one- Out sourcing Out sourcing - Flexible work arrangementFlexible work arrangement3. Political And Legislative Factors3. Political And Legislative Factors- Pay equity- Pay equity- Work force rights- Work force rights

4. Technology4. TechnologyE – CommerceE – Commerce- Convergence of workConvergence of work

5.5. Social Social

- Work place violence - Work place violence - Retirement trendsRetirement trends- Work family issueWork family issue- Diversity Diversity

6.6. StakeholdersStakeholders- UnionUnion- PublicPublic- CustomerCustomer- SupplierSupplier- Top ManagementTop Management

Environmental Scanning Sources and Methods Environmental Scanning Sources and Methods

Environmental scanning systematic monitoring of trends affecting the Environmental scanning systematic monitoring of trends affecting the organizationorganization

Techniques for ScanningTechniques for Scanning

HR professionals can use several methods to generate predictions HR professionals can use several methods to generate predictions about the future or extrapolate from current events to determine their about the future or extrapolate from current events to determine their impact on HR practices. These methods include trend analysis, the impact on HR practices. These methods include trend analysis, the Delphi technique, and impact analysis.Delphi technique, and impact analysis.

Trend AnalysisTrend Analysis

Trend analysis a forecasting method that extrapolates from historical Trend analysis a forecasting method that extrapolates from historical organizational indices.organizational indices.

Delphi TechniqueDelphi Technique

Delphi technique a forecasting method in which expert opinions are Delphi technique a forecasting method in which expert opinions are solicited and summarizedsolicited and summarized

Impact AnalysisImpact Analysis

Impact analysis a forecasting method on which past trends are Impact analysis a forecasting method on which past trends are analyzed by a panel of experts who then predict the probability analyzed by a panel of experts who then predict the probability of future events.of future events.

Environmental FactorsEnvironmental Factors

1.1. Economic ClimateEconomic Climate2.2. From the industrial Revolution to the Knowledge From the industrial Revolution to the Knowledge

RevolutionRevolution3.3. GlobalizationGlobalization4.4. The Labour MarketThe Labour Market5.5. Political and Legislative FactorsPolitical and Legislative Factors6.6. Technological FactorsTechnological Factors7.7. Demographic FactorsDemographic Factors8.8. Social and Cultural FactorsSocial and Cultural Factors9.9. StakeholdersStakeholders

StakeholdersStakeholders

Stakeholder groups of people who have vested interests in an Stakeholder groups of people who have vested interests in an organization’s decisionsorganization’s decisions

Shareholders : Shareholders : Shareholders those who own shares of a Shareholders those who own shares of a companycompany

CustomersCustomers

SuppliersSuppliers

GovernmentsGovernments

The PublicThe Public

UnionsUnions

EmployeesEmployees

Top ManagementTop Management

Environment Scanning =forming Environment Scanning =forming missionmission (why we (why we Exist)Exist) vision (What we want to be) corporate strategy (Our vision (What we want to be) corporate strategy (Our Game Game Plan)Plan) Corporate strategy-HR strategy Corporate strategy-HR strategy • HR Strategy is HR PlanningHR Strategy is HR Planning• All other functions like staffing, training, performance All other functions like staffing, training, performance management, compensation management, labour management, compensation management, labour relation, & relation, & employee separations are derived from it.employee separations are derived from it.• HRP is a proactive function- it scans & anticipates HRP is a proactive function- it scans & anticipates various various factors- internal & external to develop a planfactors- internal & external to develop a plan• It is more important during organizational turbulence It is more important during organizational turbulence – M&A, – M&A, disinvestment disinvestment • HR Planning always starts with understanding the HR Planning always starts with understanding the business business needs of the organizationneeds of the organization

flexible working schedule, childcare programme, flexible working schedule, childcare programme, employee recognition programmes, employee employee recognition programmes, employee suggestion programmes, transport and Parking facility suggestion programmes, transport and Parking facility programme, discount programme, departmental news programme, discount programme, departmental news letter programme, employee involvement programme.letter programme, employee involvement programme.

HR Planning is both “top down” and “Bottom up”. HR Planning is both “top down” and “Bottom up”. While HR plans should be based on overall business While HR plans should be based on overall business needs and strategies, they should take into account needs and strategies, they should take into account the needs and realities of organisational units. The HR the needs and realities of organisational units. The HR planning process should involve managers at all planning process should involve managers at all levels.levels.

An organization's HR plans are usually developed at An organization's HR plans are usually developed at the departmental or business line level where business the departmental or business line level where business directions are set and decisions made. But HR plans directions are set and decisions made. But HR plans are implemented (and adapted) individual managers are implemented (and adapted) individual managers in the conduct of their ongoing operations. It is in the conduct of their ongoing operations. It is important that managers understand the HR plans and important that managers understand the HR plans and priorities of their organizations so they can guide their priorities of their organizations so they can guide their actions accordingly.actions accordingly.

HR Planning is more than just having the “right people in the HR Planning is more than just having the “right people in the right place at the right time”. Its about instituting the people –right place at the right time”. Its about instituting the people –related practices and activities that will help the organisation related practices and activities that will help the organisation achieve, and improve its business results. HR Planning achieve, and improve its business results. HR Planning identifies the needs and strategies in this regard.identifies the needs and strategies in this regard.

HR Planning in its simplest form, is about answering 3 HR Planning in its simplest form, is about answering 3 questions: what are my business needs, how/what do I need to questions: what are my business needs, how/what do I need to meet those needs and what strategies will I take to ensure my meet those needs and what strategies will I take to ensure my needs are met?needs are met?

Strategic Manpower Planning is a dynamic, proactive, ongoing Strategic Manpower Planning is a dynamic, proactive, ongoing process of systematically attracting, identifying, developing, process of systematically attracting, identifying, developing, mentoring, and retaining employees to support current and mentoring, and retaining employees to support current and future organisational goals. Strategic Manpower Planning future organisational goals. Strategic Manpower Planning focuses specifically on proactive planning to meet anticipated focuses specifically on proactive planning to meet anticipated or unanticipated vacancies due to retirement and other factors or unanticipated vacancies due to retirement and other factors for classes that serve as essential elements in meeting your for classes that serve as essential elements in meeting your public service mandate.public service mandate.

Some of the long and short-term strategies that may support Some of the long and short-term strategies that may support the strategic Manpower Planning process, may be retention, the strategic Manpower Planning process, may be retention, induction Programme, employee assistance Programme, induction Programme, employee assistance Programme,

HRP is a forward looking function and an HRP is a forward looking function and an organisational tool to identify skill and competency organisational tool to identify skill and competency gaps and subsequently develop plans for gaps and subsequently develop plans for development of deficient skills and competencies in development of deficient skills and competencies in human resources to remain competitive. HRP human resources to remain competitive. HRP ensures benefits to the organisations by creating a ensures benefits to the organisations by creating a reservoir of talent, preparing people for future cost reservoir of talent, preparing people for future cost cutting and succession planning besides creating a cutting and succession planning besides creating a back –up in case of diversification and expansion.back –up in case of diversification and expansion.

Optimum manpower planning, therefore, aims at:Optimum manpower planning, therefore, aims at: Balancing demand, supply, distribution and Balancing demand, supply, distribution and

allocation of manpower,allocation of manpower, Controlling cost of human resources,Controlling cost of human resources, Formulating policies on transfer, succession, Formulating policies on transfer, succession,

relocation of manpower.relocation of manpower. HRP is a planning process by which an organization HRP is a planning process by which an organization

can move from its current manpower position to its can move from its current manpower position to its desired manpower position.desired manpower position.

Manpower planning may be defined as a strategy for Manpower planning may be defined as a strategy for acquisition, utilization, improvement and retention of acquisition, utilization, improvement and retention of human resources.human resources.

Human resource planning an Human resource planning an integral part of business planningintegral part of business planning

Identifying and acquiring the right Identifying and acquiring the right number of people with the proper number of people with the proper skillsskills

Motivating them to achieve high Motivating them to achieve high performance performance

Creating interactive links between Creating interactive links between business objective and resource business objective and resource planning activities planning activities

Concept of Human Resource PlanningConcept of Human Resource PlanningIn order to understand the concept and features In order to understand the concept and features of HRP, let us consider the following statement:of HRP, let us consider the following statement:““Although human resource planning means Although human resource planning means different things to different People, general different things to different People, general agreement exists on its ultimate objectives – the agreement exists on its ultimate objectives – the most effective use of scarce talent in the interests most effective use of scarce talent in the interests of the labour and the organization”.of the labour and the organization”.On the basis of the review of various definition of On the basis of the review of various definition of HRP, Geisler has emphasized that a suitable HRP, Geisler has emphasized that a suitable definition of HRP should include four aspects – definition of HRP should include four aspects – forecasting manpower needs, developing forecasting manpower needs, developing appropriate policies and programmes for appropriate policies and programmes for meeting those needs, implementing policies meeting those needs, implementing policies and programmes, and controlling these and programmes, and controlling these programmes. Based on these aspects he programmes. Based on these aspects he has defined HRP as follows:has defined HRP as follows:

““Manpower planning (HRP) is the process-including Manpower planning (HRP) is the process-including forecasting, developing implementing, and forecasting, developing implementing, and controlling – by which a firm ensures that it has the controlling – by which a firm ensures that it has the right number of people and right kind of people, at right number of people and right kind of people, at the right place, at the right time, doing this for the right place, at the right time, doing this for which they are economically most suitable.”which they are economically most suitable.”This definition of HRP serves the purpose This definition of HRP serves the purpose adequately and most of the definitions are based adequately and most of the definitions are based on this. For example, Decenzo and Robbins have on this. For example, Decenzo and Robbins have defined HRP as follows:defined HRP as follows:““Specifically, human resource planning is the Specifically, human resource planning is the process by which an organization ensures that it process by which an organization ensures that it has the right number and kind of people, at the has the right number and kind of people, at the right place, at the right time, capable of effectively right place, at the right time, capable of effectively and efficiently completing those tasks that will help and efficiently completing those tasks that will help the organization achieve its overall objectives.”the organization achieve its overall objectives.”Similarly, Leap and Crino have defined HRP as Similarly, Leap and Crino have defined HRP as follows:follows:

““Human resource planning includes the estimation of Human resource planning includes the estimation of how many qualified people are necessary to carry out how many qualified people are necessary to carry out the assigned activities, how many people will be the assigned activities, how many people will be available and what if anything must be done to ensure available and what if anything must be done to ensure that personnel supply equals personnel demand at the that personnel supply equals personnel demand at the appropriate point in the future.”appropriate point in the future.”Based on the above definitions, following features of HRP Based on the above definitions, following features of HRP may be identified:may be identified:

HRP is a process which includes various aspects through HRP is a process which includes various aspects through which an organizational tries to ensures that right which an organizational tries to ensures that right people, at right placed, and at right time are available.people, at right placed, and at right time are available.

It involves determination of future needs of manpower in It involves determination of future needs of manpower in the light of organizational planning and structure. the light of organizational planning and structure. Therefore, it depends heavily on these factors. Therefore, it depends heavily on these factors. Determination of manpower needs in advance facilitates Determination of manpower needs in advance facilitates these factors management to take up necessary actions.these factors management to take up necessary actions.

It also takes into account the manpower availability at a It also takes into account the manpower availability at a future period in the organization. Therefore it indicates future period in the organization. Therefore it indicates what actions can be taken to make existing manpower what actions can be taken to make existing manpower suitable for future managerial positions and the gap suitable for future managerial positions and the gap between needed and available manpower can be between needed and available manpower can be fulfilled.fulfilled.

HRP AT DIFFERENT LEVELSHRP AT DIFFERENT LEVELSDifferent institutions make HRP at different levels Different institutions make HRP at different levels

for their own purposes, of which national level, for their own purposes, of which national level, sectoral level, industry level, unit level, sectoral level, industry level, unit level, departmental level and job level are important.departmental level and job level are important.

1.1. National LevelNational LevelAdjust the supply through its population policy, Adjust the supply through its population policy, family planning, educational policy etc. HRP at family planning, educational policy etc. HRP at national level helps to plan for educational national level helps to plan for educational facilities, hospitals, employment plans, facilities, hospitals, employment plans, agricultural and industrial developments etc.agricultural and industrial developments etc.

2. Sectoral Level2. Sectoral LevelManpower requirements for a particular sector Manpower requirements for a particular sector like agricultural sector, industrial sector or like agricultural sector, industrial sector or tertiary sectors are projects based on the tertiary sectors are projects based on the government policy, projected output/operations.government policy, projected output/operations.

3. Manpower needs of a particular industry like 3. Manpower needs of a particular industry like cement, textile, chemical are predicted, taking cement, textile, chemical are predicted, taking into account the output/operational level of that into account the output/operational level of that particular industry. particular industry.

4. Unit Level4. Unit LevelThis covers the estimation of human resource This covers the estimation of human resource needs of an organisation or company based on its needs of an organisation or company based on its corporate/business plans.corporate/business plans.

5. Departmental Level5. Departmental LevelThis covers the manpower needs of a particular This covers the manpower needs of a particular department in a company.department in a company.

6. Job Level6. Job LevelManpower needs of a particular job within Manpower needs of a particular job within department like mechanical Engineer are forecast department like mechanical Engineer are forecast at this level.at this level.

IMPORTANCE OF HUMAN RESOURCE PLANNINGIMPORTANCE OF HUMAN RESOURCE PLANNINGHRP is of primacy nature and, therefore, it HRP is of primacy nature and, therefore, it precedes all other HRM functions. Without HRP, no precedes all other HRM functions. Without HRP, no other function can be undertaken in any other function can be undertaken in any meaningful way. HRP contributes in the following meaningful way. HRP contributes in the following ways in managing human resources in an ways in managing human resources in an organisation.organisation.

1. 1. Defining future personnel NeedDefining future personnel Need. Planning . Planning defines future personnel need and this becomes defines future personnel need and this becomes the basis of recruiting and developing personnel. In the basis of recruiting and developing personnel. In its absence, there is likelihood of mismatch its absence, there is likelihood of mismatch between personnel needed and personnel between personnel needed and personnel available. Steel Authority of India Limited, there available. Steel Authority of India Limited, there are 170000 employees and McKinsey & Company, are 170000 employees and McKinsey & Company, consultancy firm engaged by SAIL to devise its consultancy firm engaged by SAIL to devise its revival strategy, has suggested pruning of this revival strategy, has suggested pruning of this level to bring it to 100,000.level to bring it to 100,000.

2. 2. Coping with ChangesCoping with Changes. There is growing global . There is growing global competition- competing manpower competition- competing manpower

3. 3. Providing base for Developing TalentsProviding base for Developing Talents. Jobs . Jobs are becoming more and more knowledge-oriented. are becoming more and more knowledge-oriented. This has resulted into changed profile of This has resulted into changed profile of manpower. For example, in Larsen and Turbro, manpower. For example, in Larsen and Turbro, MBAs, engineers and technicians constitute about MBAs, engineers and technicians constitute about 70 per cent of its total employee strength of 70 per cent of its total employee strength of 20,000. there is a shortage of certain category of 20,000. there is a shortage of certain category of personnel and there is frequent movement of personnel and there is frequent movement of personnel from one organisation to personnel from one organisation to

Another. organizations must be ready to face such an eventuality Another. organizations must be ready to face such an eventuality by taking proper HRP steps.by taking proper HRP steps.

4. 4. Increasing Investment in Human ResourcesIncreasing Investment in Human Resources. Every year, cost . Every year, cost of acquiring MBAs from reputed institutes is increasing by more of acquiring MBAs from reputed institutes is increasing by more than 20-25 percent per annum. Such a high cost has forced many than 20-25 percent per annum. Such a high cost has forced many companies to have a relook at their HRM functions and companies to have a relook at their HRM functions and particularly HRP and to align these with new situations.particularly HRP and to align these with new situations.

5. 5. Forcing to Management to involve in HRMForcing to Management to involve in HRM. Systematic HRP . Systematic HRP forces top management of an organization to participate actively forces top management of an organization to participate actively in total HRM functions.in total HRM functions.

6. 6. Casualisation of work placeCasualisation of work place – non- core activities –outsourcing – non- core activities –outsourcing Mechanization, automation & cybernation in place of manpower.Mechanization, automation & cybernation in place of manpower.

7. Unite the perspective of Line & staff managers7. Unite the perspective of Line & staff managers8. Helps determine productivity 8. Helps determine productivity 9. Helps determine training needs9. Helps determine training needs10. Helps capitalizing on HR strength10. Helps capitalizing on HR strength11. Incorporates new patterns of working- virtual offices, flexi 11. Incorporates new patterns of working- virtual offices, flexi

timing, etctiming, etc

According to Megginson, “to have an According to Megginson, “to have an organisation that looks forward to the future organisation that looks forward to the future and tries to stay alive and prosper in a and tries to stay alive and prosper in a changing world, there must be active, changing world, there must be active, vigorous, continuous and creative planning”.vigorous, continuous and creative planning”.

Thus there is a greater need for planning in Thus there is a greater need for planning in order to keep the organisation dynamic in a order to keep the organisation dynamic in a changing situation of uncertainty. changing situation of uncertainty.

If used properly, it offers a number of benefits:If used properly, it offers a number of benefits:

1.1. Create reservoir of talentCreate reservoir of talent

2.2. Prepares people for future Prepares people for future

3.3. Expand or contract strengthExpand or contract strength

4.4. Cut CostCut Cost

5.5. Succession planning Succession planning

RESPONSIBILITY FOR HUMAN RESOUCE PLANING RESPONSIBILITY FOR HUMAN RESOUCE PLANING Formulation of human resource plans is a shared task Formulation of human resource plans is a shared task

between top management line managers and HR between top management line managers and HR departmentdepartment

Top management is involved in HRP process because Top management is involved in HRP process because ultimately, it approves various plans of the organisation ultimately, it approves various plans of the organisation as a whole.as a whole.

Functional managers under whom people work.Functional managers under whom people work. The responsibilities of HR department in regard to HRP The responsibilities of HR department in regard to HRP

process have been described by Geisler as follows:process have been described by Geisler as follows:– To assists, counsel and pressurize the operating management To assists, counsel and pressurize the operating management

to plan and establish objectives;to plan and establish objectives;– To collect and summaries data in total organizational terms and To collect and summaries data in total organizational terms and

to ensure consistency with tong-term objectives and other to ensure consistency with tong-term objectives and other elements of the total elements of the total business plan;elements of the total elements of the total business plan;

– To monitor and measure performance against the plan and To monitor and measure performance against the plan and keep the top management informed about it keep the top management informed about it

– To provide research necessary for effective manpower and To provide research necessary for effective manpower and organisational planning organisational planning

– Responsibility for HRP at Hindustan Lever- Top Managers, Line Responsibility for HRP at Hindustan Lever- Top Managers, Line Managers, HR ManagersManagers, HR Managers

Human resource planning processHuman resource planning processHRP is a process and it proceeds through various HRP is a process and it proceeds through various

interrelated activities.interrelated activities. Forecasting future manpower requirements, either in Forecasting future manpower requirements, either in

terms of mathematical projection of trends in the terms of mathematical projection of trends in the economy and developments in the industry or of economy and developments in the industry or of judgmental estimates based upon specific future judgmental estimates based upon specific future plans of the company.plans of the company.

Inventorying present manpower resources and Inventorying present manpower resources and analyzing the degree to which these resources are analyzing the degree to which these resources are employed optimally;employed optimally;

Anticipating manpower problems by projecting Anticipating manpower problems by projecting present resources into the future and comparing them present resources into the future and comparing them with the forecast of the requirements, to determine with the forecast of the requirements, to determine their adequacy, both quantitatively and qualitatively their adequacy, both quantitatively and qualitatively andand

Planning the necessary programmes of recruitment, Planning the necessary programmes of recruitment, selection, training deployment, utilization, transfer, selection, training deployment, utilization, transfer, promotion, development. Motivation and promotion, development. Motivation and compensation so that future manpower requirements compensation so that future manpower requirements will be met.will be met.

.. Organizational objectives

Human resource planning Forecasting needs

for Human resources Identification

of human resource gap

Forecasting supply of human resources

Surplus human resources

Shortage of human resources

Action plans for bridging

Human Resource Planning

Monitoring & control

Review Process – HR Audit

Organizational Objectives, Plans and Policies : Organizational Objectives, Plans and Policies :

Objectives generate various plans an policies which Objectives generate various plans an policies which provide direction for future course of action. Out of provide direction for future course of action. Out of this direction, various subsystems of the organization this direction, various subsystems of the organization devise their own plans and programmes. While going devise their own plans and programmes. While going through the process of HRP, organizational policies through the process of HRP, organizational policies with regard to effective utilization of human resources with regard to effective utilization of human resources should be identified and incorporated in planning should be identified and incorporated in planning process. Specifically, following questions are process. Specifically, following questions are important in this regard:important in this regard:1.1. Are vacancies to be filed by promotions form within or by Are vacancies to be filed by promotions form within or by

hiring form outside?hiring form outside?

2.2. How do the training and development objectives interface How do the training and development objectives interface with the HRP objectives?with the HRP objectives?

3.3. What union constraints are encountered in HRP and what What union constraints are encountered in HRP and what policies are needed to handled these constraints?policies are needed to handled these constraints?

4. How to enrich employee’s job? Should the routine and boring jobs 4. How to enrich employee’s job? Should the routine and boring jobs continue or be eliminated?continue or be eliminated?

5. How to downsize the organization to make it more competitive?5. How to downsize the organization to make it more competitive?6. To what extent production and operations be automated and what 6. To what extent production and operations be automated and what

can be done about those displaced?can be done about those displaced?7. How to ensure continuous availability of adaptive and flexible 7. How to ensure continuous availability of adaptive and flexible

workforce?workforce?8. Outsourcing- Contracting?8. Outsourcing- Contracting?

2. Human Resource Planning: The planning process consists of two 2. Human Resource Planning: The planning process consists of two major activities: forecasting needs of human resources and major activities: forecasting needs of human resources and forecasting supply of human resources. Both in terms of quality forecasting supply of human resources. Both in terms of quality and quantity – at future date.and quantity – at future date.

3. Identification of Human Resource Gap: Forecasting needs for 3. Identification of Human Resource Gap: Forecasting needs for human resources and forecasting supply of human resources, both human resources and forecasting supply of human resources, both taken together, helps to identify gap between human resources taken together, helps to identify gap between human resources needed and their availability – either there may be surplus human needed and their availability – either there may be surplus human resources of there may be shortage of human resources. resources of there may be shortage of human resources.

4. Action Plans : Various action plans are devised to 4. Action Plans : Various action plans are devised to bridge the human resource gap. If there is surplus bridge the human resource gap. If there is surplus of human resources either because of improper of human resources either because of improper HRP in the past or because of change in HRP in the past or because of change in organizational plan, such as divestment of organizational plan, such as divestment of business or closing down some business because business or closing down some business because of various reasons, action plans may be devised of various reasons, action plans may be devised to prune their size through layoff, voluntary to prune their size through layoff, voluntary retirement, etc. if there is shortage of human retirement, etc. if there is shortage of human resources, action plans may be devised to recruit resources, action plans may be devised to recruit additional personnel. additional personnel.

5. Review & Audit : 5. Review & Audit :

Human Resource Planning: A Win- Win Human Resource Planning: A Win- Win ProcessProcess

Wins for Employees Wins for Employees

1. Competitive pay and 1. Competitive pay and benefits plants. benefits plants.

2.2. Career development and Career development and opportunities for growth opportunities for growth

3.3. Reduced fear of Reduced fear of redundancy.redundancy.

Wins for the Enterprise Wins for the Enterprise 1.1. Appropriate organization Appropriate organization

structure and people to structure and people to face challenges and meet face challenges and meet corporate objectives, corporate objectives, both short and long term.both short and long term.

2. Development of internal 2. Development of internal resources, leading to resources, leading to stability and culture stability and culture building. building.

3. Improved motivation and 3. Improved motivation and morale of employees, morale of employees, leading to improved leading to improved performance. performance.

4.4. Training and Training and development, leading to development, leading to continued marketability.continued marketability.

5.5. Continuity of Continuity of employment due to employment due to organization's ability to organization's ability to retain workforce.retain workforce.

6.6. Fuller realization of Fuller realization of potential, leading to job potential, leading to job satisfaction.satisfaction.

7.7. Conducive work culture Conducive work culture and management style and management style leading to satisfaction leading to satisfaction

4.4. Productivity gains, Productivity gains, leading to cost reductionleading to cost reduction

5.5. Improved customer Improved customer satisfaction, leading to satisfaction, leading to improvement in improvement in business.business.

6.6. Reduction in hiring and Reduction in hiring and training costs due to the training costs due to the improved ability to improved ability to retain employees and retain employees and development of internal development of internal resources to fill future resources to fill future vacancies. vacancies.

Barriers to effective human resource Barriers to effective human resource planning planning

Improper linkage between HRP and Corporate Improper linkage between HRP and Corporate Strategy.Strategy.

Inadequate appreciation of HRPInadequate appreciation of HRP Rigidly in AttitudesRigidly in Attitudes Environment UncertaintyEnvironment Uncertainty Conflict between Long-term and Short-term HRP.Conflict between Long-term and Short-term HRP. Inappropriate HR Information Systems Inappropriate HR Information Systems

Measure for making HRP EffectiveMeasure for making HRP Effective

1.1. Commitment and involvement of top management in HRP.Commitment and involvement of top management in HRP.2.2. Proactive, rather than reactive, human resources Proactive, rather than reactive, human resources

management approach.management approach.3.3. Greater participation of line managers at all levels in HRP Greater participation of line managers at all levels in HRP

process.process.

4. Effective design of HR information 4. Effective design of HR information system integrated with the system integrated with the organisation’s management organisation’s management information system.information system.

5. Linking HRP to corporate strategic 5. Linking HRP to corporate strategic management process.management process.

6. Enough flexibility in HR plans to take 6. Enough flexibility in HR plans to take care of changing situations. care of changing situations.

JOB ANALYSISJOB ANALYSIS

Job analysis can be defined as an examination of the Job analysis can be defined as an examination of the jobs in an organization with a view to documenting the jobs in an organization with a view to documenting the knowledge, skills, and abilities (KSAs e.g., experience) knowledge, skills, and abilities (KSAs e.g., experience) associated with successful performance of those jobs.associated with successful performance of those jobs.Job - a grouping of related duties, tasks, and Job - a grouping of related duties, tasks, and

behaviors performed by one or more individuals, behaviors performed by one or more individuals, namely jobholdersnamely jobholdersPositions refers to the number of individuals who are Positions refers to the number of individuals who are performing the duties, tasks, and behaviors required performing the duties, tasks, and behaviors required by a specific jobby a specific jobJob analysis of subdivided work in the organization, Job analysis of subdivided work in the organization, both at the level of the individual job and for the entire both at the level of the individual job and for the entire flow of the production process.flow of the production process.

• Job description and job specification are the written Job description and job specification are the written outcomes (documents) produced by the job analysis outcomes (documents) produced by the job analysis process. The job description emphasizes the duties or process. The job description emphasizes the duties or tasks to be carried out on the job. For job specifications, tasks to be carried out on the job. For job specifications, the emphasis is on identifying the competencies the the emphasis is on identifying the competencies the jobholder must possess to be a successful performer in jobholder must possess to be a successful performer in the specified job.the specified job.

Job DescriptionJob Description

The data collected for job analysis provide the basis for The data collected for job analysis provide the basis for preparing job description for each job. This functional preparing job description for each job. This functional description describes what the job entails. Although there description describes what the job entails. Although there is no standard format for a job description, it usually is no standard format for a job description, it usually includes:includes:

1.1. Job title - a title of the job.Job title - a title of the job.2.2. Job summary – a brief statement of what the job entails.Job summary – a brief statement of what the job entails.

3. Job activities – a description of the tasks performed, 3. Job activities – a description of the tasks performed, material used and extent of supervision given or material used and extent of supervision given or received.received.

4. Working conditions and physical environment – heat, 4. Working conditions and physical environment – heat, light noise level, hazards are described.light noise level, hazards are described.

5. Social environment – Information on size of work group 5. Social environment – Information on size of work group and interpersonal inter-actions required to perform the and interpersonal inter-actions required to perform the job.job.

Job SpecificationJob Specification

(i)(i) Essential attributes – abilities, skills and knowledge that a Essential attributes – abilities, skills and knowledge that a person must possess. person must possess.

(ii)(ii) Desirable attributes – those attributes that one ought to Desirable attributes – those attributes that one ought to possess.possess.

(iii)(iii) Contra-indicators – attributes that will become a Contra-indicators – attributes that will become a handicap to successful job performance.handicap to successful job performance.

The format for job specification should include the The format for job specification should include the following items:following items:

1. Position title1. Position title 2. Education/training2. Education/training3.3. ExperienceExperience 4. Knowledge4. Knowledge5. Abilities5. Abilities 6. Skills6. Skills7. Aptitude7. Aptitude 8. Desirable attributes8. Desirable attributes9. Contra-indicators, if any9. Contra-indicators, if any

Problems Associated with Job AnalysisProblems Associated with Job Analysis

Job analysis that is neither updated nor reviewedJob analysis that is neither updated nor reviewedJob description or specification that is too vagueJob description or specification that is too vagueContamination and deficiency – Deficiency an error of Contamination and deficiency – Deficiency an error of omission when a job description or specification fails to omission when a job description or specification fails to incorporate important aspects of the job required for incorporate important aspects of the job required for success.success.

Contamination an error that occurs when unimportantContamination an error that occurs when unimportant

or invalid behaviors or attributes are incorporated into a job or invalid behaviors or attributes are incorporated into a job description or specification.description or specification.

4 Time and Costs of job analysis – Some organizations are 4 Time and Costs of job analysis – Some organizations are deterred to be associated with the process.deterred to be associated with the process.

Specific Job Analysis TechniquesSpecific Job Analysis Techniques

• Critical Incidents Technique – critical incidents technique a Critical Incidents Technique – critical incidents technique a qualitative process of job analysis that produces qualitative process of job analysis that produces behavioural statements along a rangebehavioural statements along a range from superior to from superior to ineffective performance for a specific job.ineffective performance for a specific job.

2. Behaviourally Anchored Rating Scales – behaviourally 2. Behaviourally Anchored Rating Scales – behaviourally anchored rating scales a job is divided into a number of key anchored rating scales a job is divided into a number of key dimension, and each dimension contains a range of dimension, and each dimension contains a range of statements of job behaviour “anchored” to a numerical statements of job behaviour “anchored” to a numerical scale.scale.

3. Position Analysis Questionnaire – A structured job 3. Position Analysis Questionnaire – A structured job analysis checklist that includes 194 items or job elements analysis checklist that includes 194 items or job elements used to rate a job.used to rate a job.

4. Functional Job Analysis – Analyses any job using three 4. Functional Job Analysis – Analyses any job using three essential elements: (1) people (important interpersonal essential elements: (1) people (important interpersonal relationship on the job), (2) data (obtaining, using, and relationship on the job), (2) data (obtaining, using, and transforming data in aid of job performance), and (3) things transforming data in aid of job performance), and (3) things (physical machinery, resources, and the environment). (physical machinery, resources, and the environment). Each of these three dimensions is then rated by level of Each of these three dimensions is then rated by level of complexity and importance.complexity and importance.

5. The Hay System – The Hay system uses three key factors 5. The Hay System – The Hay system uses three key factors to analyze each job: (1) know-how (the specific knowledge to analyze each job: (1) know-how (the specific knowledge and skills required to perform the job), (2) problem-solving and skills required to perform the job), (2) problem-solving (the decisions and problems that must be successfully (the decisions and problems that must be successfully handled on the job), and (3) accountability (the jobholder’s handled on the job), and (3) accountability (the jobholder’s responsibilities for critical task completion and for responsibilities for critical task completion and for organizational resources, budgets, supervision of people, organizational resources, budgets, supervision of people, etc.etc.

Competency- Based ApproachesCompetency- Based Approaches

Competency any knowledge, skill, trait, motive, attitude, Competency any knowledge, skill, trait, motive, attitude, value, or other personal characteristic that is essential to value, or other personal characteristic that is essential to personal characteristic that is essential to perform the job personal characteristic that is essential to perform the job and that differentiates superior from solid performance.and that differentiates superior from solid performance.

Core competencies – characteristics that every member of an Core competencies – characteristics that every member of an organization, regardless of position, function, or level of organization, regardless of position, function, or level of responsibility with the organization, is expected to possessresponsibility with the organization, is expected to possess

Role or specific competencies – characteristics shared by Role or specific competencies – characteristics shared by different positions within an organization. Only those different positions within an organization. Only those members of an organization in these positions are expected members of an organization in these positions are expected to possess these competencies.to possess these competencies.

Methods & Techniques of Demand Methods & Techniques of Demand Management Management

Forecasting of demand of human resources needs is Forecasting of demand of human resources needs is the first and most important step in any human the first and most important step in any human resource planning process.resource planning process.

Forecasting is not a very accurate exercise over a Forecasting is not a very accurate exercise over a long-term period. For short range planning of less long-term period. For short range planning of less than a year fairly accurate forecast is perhaps than a year fairly accurate forecast is perhaps possible. No processes or techniques exist that can possible. No processes or techniques exist that can take into account all the parameters and take into account all the parameters and circumstances required for accurate long-term circumstances required for accurate long-term estimation of manpower needs. estimation of manpower needs.

Dynamic business circumstances, Dynamic business circumstances, rapidly changing technologies and their impact on rapidly changing technologies and their impact on

products and methods of production, products and methods of production, political and social changes and ever increasing political and social changes and ever increasing

competition keep changing the set of circumstances competition keep changing the set of circumstances assumed at the time to forecast.assumed at the time to forecast.

HR ForecastingHR ForecastingWhat is certain is the uncertainty of the future. As time passes, the working What is certain is the uncertainty of the future. As time passes, the working environment changes internally as well externally. Internal changes in the environment changes internally as well externally. Internal changes in the organizational environment include product mix and capacity utilization, organizational environment include product mix and capacity utilization, acquisition the external environment include government regulations, acquisition the external environment include government regulations, consumerism, and competence levels of employees, among a host of other consumerism, and competence levels of employees, among a host of other factors. factors.

Forecasting The Overall Human Resource RequirementsForecasting The Overall Human Resource RequirementsThe existing job design and analysis may thoroughly be reviewed keeping in view The existing job design and analysis may thoroughly be reviewed keeping in view the future capabilities, knowledge and skills of present employees. Further the the future capabilities, knowledge and skills of present employees. Further the jobs should be redesigned and reanalyzed keeping in view the organisational and jobs should be redesigned and reanalyzed keeping in view the organisational and unit wise plans and programmes, future work quantum, future activity or task unit wise plans and programmes, future work quantum, future activity or task analysis, future human resources and based on future organisational plans, Job analysis, future human resources and based on future organisational plans, Job analysis and forecasting. One on the important aspects of demand forecasting is analysis and forecasting. One on the important aspects of demand forecasting is the forecasting of the quality of human resources (skill, knowledge values, the forecasting of the quality of human resources (skill, knowledge values, capabilities etc.) in addition to quantity of human resources. capabilities etc.) in addition to quantity of human resources.

Benefits of HR ForecastingBenefits of HR Forecasting1.1. Reduces HR costsReduces HR costs2.2. Increase Organizational FlexibilityIncrease Organizational Flexibility3.3. Ensures a close linkage to the Macro Business Ensures a close linkage to the Macro Business

forecasting processforecasting process4.4. Ensures that organizational requirements take Ensures that organizational requirements take

precedence over issues of resource constraint and precedence over issues of resource constraint and scarcityscarcity

Goal /Stage of HR ForecastingGoal /Stage of HR Forecasting

The goal of HR forecasting is to obtain sufficient The goal of HR forecasting is to obtain sufficient numbers of trained personnel who will be able numbers of trained personnel who will be able perform successfully in jobs when those jobs need to perform successfully in jobs when those jobs need to be filled. To do this, the forecasting process has five be filled. To do this, the forecasting process has five

1.1. Identify organizational goals, objectives, and plans.Identify organizational goals, objectives, and plans.2.2. Determine overall demand requirements for personnel.Determine overall demand requirements for personnel.3.3. Assess in-house skills and other internal supply Assess in-house skills and other internal supply

characteristics.characteristics.4.4. Determine the net demand requirements that must be Determine the net demand requirements that must be

met from external, environmental supply sources.met from external, environmental supply sources.5.5. Develop HR plans and programs to ensure that the right Develop HR plans and programs to ensure that the right

people are in the right place.people are in the right place.

Environmental and organizational factors affecting Environmental and organizational factors affecting HR forecastingHR forecasting

The HR forecasting process is extremely complex, The HR forecasting process is extremely complex, requiring specific numerical and skill competency requiring specific numerical and skill competency targets for personnel to be met despite operating in targets for personnel to be met despite operating in circumstances of high uncertainty. This uncertainty circumstances of high uncertainty. This uncertainty arises from both external environmental factors and arises from both external environmental factors and from inside the organization itself. Given this from inside the organization itself. Given this

Uncertainty and the natural rate of change resulting from Uncertainty and the natural rate of change resulting from operating in a turbulent, global economy, the key factor operating in a turbulent, global economy, the key factor for HR forecasters is to incorporate flexibility into the for HR forecasters is to incorporate flexibility into the program responses associated with demand and supply program responses associated with demand and supply forecasts.forecasts.

HR Forecasting time HorizonsHR Forecasting time Horizons

1.1. Current forecastCurrent forecast2.2. Short-run forecastShort-run forecast3.3. Medium-run forecastMedium-run forecast4.4. Long-run forecastLong-run forecast

Prediction a single numerical estimate of HR Prediction a single numerical estimate of HR requirements associated with a specific time horizon and requirements associated with a specific time horizon and set of assumptionsset of assumptions

Projection incorporates several HR estimates based on a Projection incorporates several HR estimates based on a variety of assumptionsvariety of assumptions

Contingency plans, plans to be implemented when severe, Contingency plans, plans to be implemented when severe, unanticipated changes to organizational or environmental unanticipated changes to organizational or environmental factors completely negate the usefulness of the existing factors completely negate the usefulness of the existing HR forecasting predictions or projectionsHR forecasting predictions or projections

Determining Net HR RequirementsDetermining Net HR Requirements

1.1. Determine HR Demand Determine HR Demand 2.2. Ascertain HR SupplyAscertain HR Supply Internal supply – refers to current members of the Internal supply – refers to current members of the

organizational workforce who can be retrained, promoted, organizational workforce who can be retrained, promoted, transferred, etc. to fill anticipated future HR requirements.transferred, etc. to fill anticipated future HR requirements.

External supply – potential employees who are currently External supply – potential employees who are currently

undergoing training (e.g., university students) or are undergoing training (e.g., university students) or are working for competitors, or who are members of unions or working for competitors, or who are members of unions or professional associations, or currently are in a transitional professional associations, or currently are in a transitional stage, between jobs unemployed.stage, between jobs unemployed.

Skills inventory – Personal database record on each Skills inventory – Personal database record on each employee.employee.

3. Determine Net HR Requirements3. Determine Net HR Requirements

The third step in the process involves the determination of The third step in the process involves the determination of net HR requirements. From steps one and two above, the net HR requirements. From steps one and two above, the following equations are derived:following equations are derived:

HR demand = external supply + internal supplyHR demand = external supply + internal supplyHR demand - internal supply = external supplyHR demand - internal supply = external supply

Personnel who can fill organizational HR demand Personnel who can fill organizational HR demand requirements must be found from either the current internal requirements must be found from either the current internal workforce supply or from external environmental sources. As workforce supply or from external environmental sources. As explained above, if we are unable to meet the numerical and explained above, if we are unable to meet the numerical and KSA demands for personnel from internal source, either KSA demands for personnel from internal source, either because of the qualification or performance deficiencies of because of the qualification or performance deficiencies of current workers or because of an explicit organizational current workers or because of an explicit organizational

decision to recruit new blood, the residual supply not met decision to recruit new blood, the residual supply not met through current employees must come from outside:through current employees must come from outside:

External supply requirements = replacement + change External supply requirements = replacement + change supply componentssupply components

replacement supply = hiring to replace all normal lossesreplacement supply = hiring to replace all normal losses

(Normal losses are those that result from retirements, (Normal losses are those that result from retirements, terminations, voluntary turnover, promotions, transfers, and terminations, voluntary turnover, promotions, transfers, and leaves, and these losses must be replaced to keep the leaves, and these losses must be replaced to keep the workforce size at the current level.)workforce size at the current level.)

change supply = hiring to increase (or decrease) the overall change supply = hiring to increase (or decrease) the overall staffing level staffing level

Recall from our earlier discussion of HR demand that future Recall from our earlier discussion of HR demand that future personnel requirements must not only replace the current personnel requirements must not only replace the current

Workforce employees (in terms of numbers and skill Workforce employees (in terms of numbers and skill competencies), but also reflect desired future changes to competencies), but also reflect desired future changes to staffing levels.staffing levels.

external supply = current workforce size x (replacement % external supply = current workforce size x (replacement % per year + change % per year)per year + change % per year)

external supply = 1000 (.11+.07) = 110+70 =180external supply = 1000 (.11+.07) = 110+70 =180

Another organization with a workforce of 450, which has a Another organization with a workforce of 450, which has a historical annual replacement/loss rate of 8% and a corporate historical annual replacement/loss rate of 8% and a corporate downsizing policy that will reduce overall staffing levels by downsizing policy that will reduce overall staffing levels by 9.5%, has the following supply requirement: 9.5%, has the following supply requirement:

external supply = 450 (.08+ [-.095] = 36-43= -7external supply = 450 (.08+ [-.095] = 36-43= -7

HR surplus occurs when the internal workforce supply HR surplus occurs when the internal workforce supply exceeds the organization’s requirement or demand for exceeds the organization’s requirement or demand for personnelpersonnel

4. Institute HR Programs: HR Deficit and HR Surplus4. Institute HR Programs: HR Deficit and HR Surplus

HR deficit = HR demand > HR internal supplyHR deficit = HR demand > HR internal supply

HR deficit occurs when demand for HR exceeds the current HR deficit occurs when demand for HR exceeds the current personnel resources available in the organization’s personnel resources available in the organization’s workforce (HR internal supply)workforce (HR internal supply)

HR surplus = HR demand < HR internal supplyHR surplus = HR demand < HR internal supply

Job sharing occurs when two or more employees perform the Job sharing occurs when two or more employees perform the duties of one full-time position, each sharing the work activities on duties of one full-time position, each sharing the work activities on a part-time basisa part-time basis

Attrition the process of reducing an HR surplus by allowing the size Attrition the process of reducing an HR surplus by allowing the size of the workforce to decline naturally because of the normal of the workforce to decline naturally because of the normal pattern of losses associated with retirements, deaths, voluntary pattern of losses associated with retirements, deaths, voluntary turnover, etc.turnover, etc.

Hiring freeze a prohibition on all external recruiting activities.Hiring freeze a prohibition on all external recruiting activities.

Factors to be considered before Forecasting demand Factors to be considered before Forecasting demand for employees for employees

Economic factors: as business is an economic Economic factors: as business is an economic activity, forecasts must consider economic activity, forecasts must consider economic aspects like per capita income, employees’ aspects like per capita income, employees’ expectations of wages and salaries, cost and expectations of wages and salaries, cost and price of raw materials, inflation rate, etc. Fiscal price of raw materials, inflation rate, etc. Fiscal policies and liberalization of trade will also policies and liberalization of trade will also influence requirements.influence requirements.

Social/ Market Factors: the expectations of Social/ Market Factors: the expectations of existing and potential employees on wagesexisting and potential employees on wages

Demographic factors: decisively influential upon Demographic factors: decisively influential upon future requirements, these include availability of future requirements, these include availability of youth, training facilities, women in the active youth, training facilities, women in the active labour force, sex ratio, facilities for professional labour force, sex ratio, facilities for professional education, income level, education/literacy etc.education, income level, education/literacy etc.

•Competition: Competitors strategies, including advertising, Competition: Competitors strategies, including advertising, quality of product, pricing, and distribution influence future quality of product, pricing, and distribution influence future staffing in a variety of ways. staffing in a variety of ways. •Technological Factors: Technology has to be stage of the Technological Factors: Technology has to be stage of the art if company is to survive the competition. Growth and art if company is to survive the competition. Growth and expansion of business: growth is possible throughexpansion of business: growth is possible through

Product diversificationProduct diversificationIncreased capacity of production. Increased capacity of production.

Expansion plans are executed through:Expansion plans are executed through:MergerMerger

AcquisitionAcquisition Joint venture participationJoint venture participation Formation of horizontal and vertical integrationFormation of horizontal and vertical integration Establishment of national and international value Establishment of national and international value

chainschainsManagement philosophy/ Leadership: Top Management philosophy/ Leadership: Top

management ultimately decides what levels of management ultimately decides what levels of staffing are required.staffing are required.

Innovative management: As competition increases Innovative management: As competition increases with globalization and liberalization of trade, with globalization and liberalization of trade, management needs to be innovative to stay afloat management needs to be innovative to stay afloat and sustain competitive advantage. and sustain competitive advantage.

Managerial DilemmaManagerial Dilemma

Assumptions of social environment

DEMAND FORECASTING EXERCISE

Business plans

Assumptions of labour market

Assumptions of technology conditions

Assumptions of political environment

Assumptions of economic trends

Issues in demand forecastingIssues in demand forecasting Social Factors Social Factors Technologies FactorsTechnologies Factors Political FactorsPolitical Factors Economic factors Economic factors Demand GenerationDemand Generation Growth Growth Employee TurnoverEmployee TurnoverThere are several good reasons to conduct demand There are several good reasons to conduct demand

forecasting. It can help:forecasting. It can help:1.1. Quantify of the jobs necessary for producing a given Quantify of the jobs necessary for producing a given

number of goods, or offering a given amount of servicesnumber of goods, or offering a given amount of services2.2. Determine what staff-mix is desirable in the future Determine what staff-mix is desirable in the future 3.3. Assess appropriate staffing levels in different parts of the Assess appropriate staffing levels in different parts of the

organization so as to avoid unnecessary costsorganization so as to avoid unnecessary costs4.4. Prevent shortages of people where and when they are Prevent shortages of people where and when they are

needed most needed most 5.5. Monitor compliance with legal requirements with regard to Monitor compliance with legal requirements with regard to

reservation of jobs reservation of jobs

Forecasting techniquesForecasting techniquesForecasting techniques vary from simple to Forecasting techniques vary from simple to

sophisticated ones. Before describing sophisticated ones. Before describing each technique, it may be stated that each technique, it may be stated that organisation generally follow more than organisation generally follow more than one technique. one technique.

The techniques are:The techniques are:1.1. Managerial judgmentManagerial judgment2.2. Ratio-trend analysis Ratio-trend analysis 3.3. Work study techniquesWork study techniques4.4. Delphi technique Delphi technique 5.5. Flow modelsFlow models6.6. OthersOthers

Managerial Judgement: This technique is very simple. In Managerial Judgement: This technique is very simple. In this, managers sit together, discuss and arrive at a figure, this, managers sit together, discuss and arrive at a figure, which would be the future demand for labour. The which would be the future demand for labour. The technique may involve a technique may involve a ‘bottom-up’ or a ‘top-down’ ‘bottom-up’ or a ‘top-down’ approach. approach. In the first, line managers submit their In the first, line managers submit their departmental proposals to top managers who arrive at the departmental proposals to top managers who arrive at the company forecasts. In the ‘top down’ approach, top company forecasts. In the ‘top down’ approach, top managers prepare company and departmental forecasts. managers prepare company and departmental forecasts. These forecasts are reviewed with departmental heads and These forecasts are reviewed with departmental heads and agreed upon. Neither of these approaches is accurate- a agreed upon. Neither of these approaches is accurate- a combination of the twocombination of the two could yield positive results. In the could yield positive results. In the ‘bottom-up’ and ‘top-down’ approaches, departmental ‘bottom-up’ and ‘top-down’ approaches, departmental heads are provided with broad guidelines. Armed with such heads are provided with broad guidelines. Armed with such guidelines, and a consultation with the HRP section in the guidelines, and a consultation with the HRP section in the HRM department, departmental managers can prepare HRM department, departmental managers can prepare forecasts for their respective departments. Simultaneously forecasts for their respective departments. Simultaneously top HR managers prepare company forecasts. A committee top HR managers prepare company forecasts. A committee comprising departmental managers and HR managers will comprising departmental managers and HR managers will review the two sets of forecasts, arrive at a unanimity, review the two sets of forecasts, arrive at a unanimity, which is then presented to top managers for their approval. which is then presented to top managers for their approval.

Ratio –trend AnalysisRatio –trend Analysis This is the quickest forecasting technique. The technique involves This is the quickest forecasting technique. The technique involves

studying past ratiostudying past ratio, say, between the number of workers and sales , say, between the number of workers and sales in an organization and forecasting future ratios, making some in an organization and forecasting future ratios, making some allowance for changes in the organization or its methods. Exhibit 4 allowance for changes in the organization or its methods. Exhibit 4 shows how an analysis of actual and forecast ratios, between the shows how an analysis of actual and forecast ratios, between the number of routine proposals to be processed by an insurance number of routine proposals to be processed by an insurance company’s writing department and the number of writers company’s writing department and the number of writers employed could be used to forecast future requirements.employed could be used to forecast future requirements.

Exhibit 4 : Demand Forecast- InspectorsExhibit 4 : Demand Forecast- InspectorsYearYear Production No. of Employees Production No. of Employees Ratio Ratio

Inspector : Inspector : -3-3 15001500 150150 1:101:10

ActualActual -2-2 18001800 180180 1:101:10Last Year Last Year 20002000 180180 1:111:11Next YearNext Year 22002200 200200 1:111:11+2+2 25002500 210210 1:121:12+3+3 27502750 230230 1:121:12

Simple Mathematical Methods

The productivity ratio is the average number of units produced per direct labor employee per year. Suppose a company produces sofas and knows from past history that the productivity ratio is about fifty sofas per furniture assembler per year. If the marketing department expects to sell 10,000 sofas in the coming year, then the company needs 10,000/50=200 furniture assemblers.Direct-to-indirect-labor staffing ratios are used to calculate the number of individuals required in other jobs. For instance, if the sofa firm generally has one supervisor for every fifteen assemblers, then about thirteen supervisors will be needed for two hundred assemblers. Past experience also may show that two shipping-and-receiving clerks are required for every fifty assemblers. This means that the company needs a total of eight clerks.Productivity and staffing ratios based on historical data may be modified judgmentally if the ratios are expected to change. For instance, if the union has negotiated a new contract requiring workdays that are thirty minutes shorter and more paid holidays, the expected productivity ratio should be adjusted downward. If an improved order-processing program will be installed in the clerks’ computers, the staffing ratio may change, with fewer clerks needed to service the same number of direct workers.

Delphi TechniqueDelphi Technique

Delphi technique can be used for forecasting Delphi technique can be used for forecasting human resources needs human resources needs in two formsin two forms. . FirstFirst, it can , it can be used to know the trends for changing job be used to know the trends for changing job profile and, consequently, the changing personnel profile and, consequently, the changing personnel profile across the country or at international level. profile across the country or at international level. SecondSecond, this, technique can be used to solicit , this, technique can be used to solicit views of expert in different functional areas of an views of expert in different functional areas of an organisation about the changing profile of organisation about the changing profile of personnel in their respective departments in the personnel in their respective departments in the light of changing environment. Such views are light of changing environment. Such views are collected and summarized by HR department to collected and summarized by HR department to arrive at a decision about the types of personnel arrive at a decision about the types of personnel needed in future. Delphi technique is used needed in future. Delphi technique is used primarily primarily to assess long-term needs of human to assess long-term needs of human resources.resources.

Work Study TechniqueWork Study Technique Work-study technique can be Work-study technique can be used when it is possible to apply used when it is possible to apply

work measurement to calculate the length of operations and the work measurement to calculate the length of operations and the amount of labour requiredamount of labour required. The starting point in a manufacturing . The starting point in a manufacturing company is the production budget, prepared in terms of volumes company is the production budget, prepared in terms of volumes of salable products for the company as a whole, or volumes of of salable products for the company as a whole, or volumes of output are then multiplied by the planned volume of units to be output are then multiplied by the planned volume of units to be produced to give the total number of planned hours for the produced to give the total number of planned hours for the period. This is then divided by the number of actual working hours period. This is then divided by the number of actual working hours for an individual operator to show the number of operators for an individual operator to show the number of operators required. Allowance will have to be made for absenteeism and idle required. Allowance will have to be made for absenteeism and idle time. time.

The number of operative required to complete specified volume of The number of operative required to complete specified volume of operation is:operation is:.. Planned outputPlanned output ..

Standard output per hour * standard hours per personStandard output per hour * standard hours per person

Standard output per hour is not always a constant factor but, Standard output per hour is not always a constant factor but, generally, it increases over the period of time because of learning.generally, it increases over the period of time because of learning.

Work –study technique is a method of Work –study technique is a method of forecasting human resource needs. It is a forecasting human resource needs. It is a decision Making tool. It is been used in decision Making tool. It is been used in estimating personnel needs from a group of estimating personnel needs from a group of experts, usually managers. The HR experts act experts, usually managers. The HR experts act as intermediaries, summaries the various as intermediaries, summaries the various responses and report the findings back to responses and report the findings back to experts survey again after they get this experts survey again after they get this feedback. feedback. Summaries and surveys repeated Summaries and surveys repeated until the experts opinions begin to agree. This until the experts opinions begin to agree. This agreement reached is the forecasting of the agreement reached is the forecasting of the human resource needs.human resource needs.

Some other MethodsSome other Methods

Regression analysis:Regression analysis:

Past levels of various work load indicators, such as sales, Past levels of various work load indicators, such as sales, production levels, and value added, are examined for production levels, and value added, are examined for statistical relationships with staffing levels. Where statistical relationships with staffing levels. Where sufficiently strong relationships are found, a regression (or sufficiently strong relationships are found, a regression (or multiple regression) model is derived. Forecasted levels of multiple regression) model is derived. Forecasted levels of the retained indicators arethe retained indicators are

Entered into the resulting model and used to calculate the Entered into the resulting model and used to calculate the associated level of human resource requirements.associated level of human resource requirements.

Productivity ratiosProductivity ratios : Historical data are used to : Historical data are used to examine past levels of a productivity index (P): examine past levels of a productivity index (P):

P= Work load/Number of PeopleP= Work load/Number of PeopleWhere constant, or systematic, relationships are found, Where constant, or systematic, relationships are found,

human resource requirements can be computed by human resource requirements can be computed by diving predicted work loads by P.diving predicted work loads by P.

Personnel ratios:Personnel ratios: Past personnel data are examined Past personnel data are examined to determine historical relationships among the to determine historical relationships among the employees in various jobs or job categories. Regression employees in various jobs or job categories. Regression analysis or productivity ratios are used to project either analysis or productivity ratios are used to project either total or key-group human resource requirements, and total or key-group human resource requirements, and personnel ratios are used to allocated total personnel ratios are used to allocated total requirements to various job categories or to estimate requirements to various job categories or to estimate for non-key groups.for non-key groups.

Time series analysisTime series analysis: past staffing levels (instead : past staffing levels (instead of work load indicators) are used to project future of work load indicators) are used to project future human resource requirements. Past staffing levels human resource requirements. Past staffing levels are examined to isolate and cyclical variation, long-are examined to isolate and cyclical variation, long-term terms, and random movement. Long term term terms, and random movement. Long term trends are then extrapolated or projected using a trends are then extrapolated or projected using a moving average, exponential smoothing, or moving average, exponential smoothing, or regression technique.regression technique.

Combination of different methods of forecasting Combination of different methods of forecasting human resource needs is followed. Even where human resource needs is followed. Even where work-study technique is followed to assess the work-study technique is followed to assess the human resource needs at the operative level, it is human resource needs at the operative level, it is not undertaken every year, as the standards fixed in not undertaken every year, as the standards fixed in a year serve the purpose for many years. In order to a year serve the purpose for many years. In order to understand how various methods are applied in understand how various methods are applied in practice we shall see in the staffing.practice we shall see in the staffing.

Methods & techniques for supply managementMethods & techniques for supply management Armstrong has defined forecasting of human resource supply as Armstrong has defined forecasting of human resource supply as

follows:follows:““Manpower supply forecasting measure the number of people likely Manpower supply forecasting measure the number of people likely

to be available from within and outside and organisation, after to be available from within and outside and organisation, after making allowances for absenteeism, internal movements and making allowances for absenteeism, internal movements and promotions, wastage and changes in work hours, and other promotions, wastage and changes in work hours, and other conditions of work”conditions of work”

Reasons for supply forecast are the following:Reasons for supply forecast are the following:1.1. Helps quantify number of people and positions likely to be Helps quantify number of people and positions likely to be

available in future to achieve objectivesavailable in future to achieve objectives2.2. Helps clarify the staff mixes that will exist in futureHelps clarify the staff mixes that will exist in future3.3. Asses staff level in different part of organisationAsses staff level in different part of organisation4.4. Prevent shortage of people where they are needed mostPrevent shortage of people where they are needed most5.5. Monitor future conditions with legal requirement for job Monitor future conditions with legal requirement for job

reservations. reservations. Supply source is divided in to two category Supply source is divided in to two category 1.1. Internal supplyInternal supply2.2. External supply External supply

External Supply – staffing External Supply – staffing Internal supply can be undertaken by Human resource flow modelInternal supply can be undertaken by Human resource flow model

Human resource inventory Human resource inventory

Human resource flow model- Human resource flow model- An organization can be considered as a An organization can be considered as a system of flow- both inflows and outflows of various resources. system of flow- both inflows and outflows of various resources. Based on this concept, a flow model of human resources has been Based on this concept, a flow model of human resources has been developed which is known as Markov chain analysis model of developed which is known as Markov chain analysis model of simply as Markovian model. This can be applied for organization simply as Markovian model. This can be applied for organization as a whole or any of its sub systems. as a whole or any of its sub systems. The basic assumption of this The basic assumption of this model, and which is true, is that is a system, there are inflows and model, and which is true, is that is a system, there are inflows and outflows of personnel during a period, in our case the HR plan outflows of personnel during a period, in our case the HR plan period.period. In this model the forecast of human resource supply In this model the forecast of human resource supply proceeds as follows:proceeds as follows:

1.1. Determination of the period in which HR flows are measuredDetermination of the period in which HR flows are measured2.2. Establishment of categories of states as called in the model to Establishment of categories of states as called in the model to

which an individual can be assignedwhich an individual can be assigned

3. Counting of annual flows of individuals among states for several 3. Counting of annual flows of individuals among states for several time periods a state may be absorbing (gain/losses) or non-time periods a state may be absorbing (gain/losses) or non-absorbing (Charge in position levels)absorbing (Charge in position levels)

4. Estimating the probability of transitions form one state to another 4. Estimating the probability of transitions form one state to another based on the past trend;.based on the past trend;.

Estimation of personnel supply based on flowsEstimation of personnel supply based on flows

No. of supervisor at the beginning of plan period

100

Resignations

Discharges Retirements Promotions Demotions

Total outflows

8

2

3

5

1

19

Transfer in

Promotion in

Total inflows

Total supervisors

Available

10

8

18

99

Sources of inflows No. of persons sources of outflows no. of persons

Similar exercise can be done for other categories of personnel.

Flow ModelsFlow Models Flow models are very frequently associated with forecasting Flow models are very frequently associated with forecasting

personnel needs. The simplest one is called the personnel needs. The simplest one is called the Markov Markov modelmodel. In this technique, the forecasters will:. In this technique, the forecasters will:

Determine the time that should be coveredDetermine the time that should be covered. Shorter lengths . Shorter lengths of time are generally accurate than longer ones. However, of time are generally accurate than longer ones. However, the time horizon depends on the length of the HR plan the time horizon depends on the length of the HR plan which, in turn, is determined by the strategic plan of the which, in turn, is determined by the strategic plan of the organization.organization.

Establish categories, also called states, to which employees Establish categories, also called states, to which employees can be assigned. can be assigned. These categories These categories must not overlap must not overlap and and must take into account every possible category to which must take into account every possible category to which and individual can be assigned. The number of states can and individual can be assigned. The number of states can neither be too large nor too small.neither be too large nor too small.

count annual movements (also called ‘flows’) among states count annual movements (also called ‘flows’) among states for several time periods. for several time periods. These states are defined as These states are defined as absorbing (gains or losses to the company) or non-absorbing (gains or losses to the company) or non-absorbing (change in positive levels or employment status). absorbing (change in positive levels or employment status). Loses include death or disability, absences, resignations Loses include death or disability, absences, resignations and retirements. Gains include hiring, rehiring, transfer and and retirements. Gains include hiring, rehiring, transfer and movement by position level.movement by position level.

Estimate the probability of transitions from one state to Estimate the probability of transitions from one state to another based on past trends. Demands a function of another based on past trends. Demands a function of replacing those who make a transitionreplacing those who make a transition. .

There are alternatives to the simple Markov model. One There are alternatives to the simple Markov model. One called the called the semi –Markov, takes into account not just the semi –Markov, takes into account not just the category but also the tenure of individuals in each category but also the tenure of individuals in each categorycategory. After all, likelihood of movements increases with . After all, likelihood of movements increases with tenure. Another methods is called the tenure. Another methods is called the Vacancy Model, Vacancy Model, which predicts probabilities of movement and number of which predicts probabilities of movement and number of vacancies. vacancies. While the semi-markov model helps estimate While the semi-markov model helps estimate movement among those who situations and tenure are movement among those who situations and tenure are similar, the vacancy model produces the best results for an similar, the vacancy model produces the best results for an organization.organization.

Markov analysis is Markov analysis is advantageousadvantageous because it makes sense to because it makes sense to decision makers. They can easily understand its underlying decision makers. They can easily understand its underlying assumptions. They are, therefore, likely to accept results. assumptions. They are, therefore, likely to accept results. The The disadvantagesdisadvantages include: (i) heavy reliance on past- include: (i) heavy reliance on past-oriented data, which may not be accurate in periods of oriented data, which may not be accurate in periods of turbulent change and (ii) accuracy in forecasts about turbulent change and (ii) accuracy in forecasts about individuals is sacrificed to achieve accuracy across groups.individuals is sacrificed to achieve accuracy across groups.

Human resource inventory Human resource inventory - Normally use to count tangible inputs & outputs Normally use to count tangible inputs & outputs - Determination of personnel whose inventory is to be prepared, Determination of personnel whose inventory is to be prepared,

cataloguing of factual information of each individual, systematic cataloguing of factual information of each individual, systematic and detailed appraisal of these individuals, and detailed study of and detailed appraisal of these individuals, and detailed study of those individuals who have potential for development.those individuals who have potential for development.

Skill inventory Skill inventory 1.1. Employee’s personal dataEmployee’s personal data2.2. Skills- education, job experience, training etcSkills- education, job experience, training etc3.3. Special achievements, if anySpecial achievements, if any4.4. Salary and job history andSalary and job history and5.5. Potentials of the employeePotentials of the employeeManagement inventory Management inventory 1.1. Personal data Personal data 2.2. Work history Work history 3.3. Strengths and WeaknessStrengths and Weakness4.4. Career planCareer plan5.5. Promotion potentialsPromotion potentials6.6. Number and types of employees managedNumber and types of employees managed7.7. Total budget managed Total budget managed 8.8. Any special achievements such as acquisition of additional Any special achievements such as acquisition of additional

degrees, papers presented, conferences attended etc. degrees, papers presented, conferences attended etc.

Existing inventory-Existing inventory- i.i. Head counts total, department-wise, sex-wise, designation-Head counts total, department-wise, sex-wise, designation-

wise, skill-wise, payroll-wise etc.wise, skill-wise, payroll-wise etc.ii.ii. Job family inventory- clerks, cashiers, typists, stenos sub-job Job family inventory- clerks, cashiers, typists, stenos sub-job

family, skill, qualification, similar operations, production family, skill, qualification, similar operations, production engineer mechanical & maintenance engineer, mechanical, job engineer mechanical & maintenance engineer, mechanical, job families like general administration production etc.families like general administration production etc.

iii.iii. Age inventory-skill, experience, values, capabilities, Age inventory-skill, experience, values, capabilities, qualification & training including minute qualifications, qualification & training including minute qualifications, inventory of salary grades-pay wise, allowance wise and total inventory of salary grades-pay wise, allowance wise and total salary-wise. Sex-wise inventory, Local and non-local wise salary-wise. Sex-wise inventory, Local and non-local wise inventory, inventory of past performance and future inventory, inventory of past performance and future potentialities.potentialities.

Potential Losses-Potential Losses-Permanent total loss is due to labour turnover. Labour turnover is Permanent total loss is due to labour turnover. Labour turnover is

measured by the following formulameasured by the following formula

Number of employees left during a specified periodNumber of employees left during a specified period____________________________________________x 100____________________________________________x 100Average number of employees during the same period Average number of employees during the same period Permanent partial loss consists of wastage of skills, capabilities Permanent partial loss consists of wastage of skills, capabilities

etc. due to ill-health and involvement of employees in etc. due to ill-health and involvement of employees in accidents. accidents.

Temporary total loss of human resource is due to Temporary total loss of human resource is due to absenteeism absenteeism

Temporary partial loss includes consultancy, Temporary partial loss includes consultancy, advisory and other services offered by the advisory and other services offered by the employees to others.employees to others.

Potential AdditionsPotential Additionsi.i. Permanent totalPermanent totalii.ii. Permanent partialPermanent partialiii.iii. Temporary totalTemporary totaliv.iv. Temporary partialTemporary partialv.v. Permanent total additions in case of departments Permanent total additions in case of departments

include promotions, demotions and transfers include promotions, demotions and transfers within the organisation. Permanent partial within the organisation. Permanent partial addition consists of acquisition of new skills, addition consists of acquisition of new skills, knowledge, values, aptitude etc. by the existing knowledge, values, aptitude etc. by the existing employees. employees.

vi.vi. Deputation Deputation vii.vii. Consultancy & advisory Consultancy & advisory

Analyzing source of supplyAnalyzing source of supplyInternal and external factors affecting manpower Internal and external factors affecting manpower Local Factors : Local factors include, population density in the area, Local Factors : Local factors include, population density in the area,

local unemployment level, availability of employees on part time, local unemployment level, availability of employees on part time, temporary and casual basis current and future competition for the temporary and casual basis current and future competition for the similar categories, outcome from local educational and training similar categories, outcome from local educational and training institutes, residential facilities available, local transport and institutes, residential facilities available, local transport and communication facilities, traditional pattern of employment and communication facilities, traditional pattern of employment and availability of manpower with required qualifications and skills, the availability of manpower with required qualifications and skills, the pattern of place to live, local housing, shopping, educational pattern of place to live, local housing, shopping, educational facilities, medical facilities, regulations of local government like facilities, medical facilities, regulations of local government like reservation for local candidates, candidates belonging to reservation for local candidates, candidates belonging to scheduled backward and minority communities etc.scheduled backward and minority communities etc.

National factors: Technologies, scientists, management graduates National factors: Technologies, scientists, management graduates computer professionals etc. effect of changing educational computer professionals etc. effect of changing educational patterns, impact of government, national educational policy, patterns, impact of government, national educational policy, impact of government employment regulations such as reservation impact of government employment regulations such as reservation for candidates belonging to SC, ST and other categories etc. for candidates belonging to SC, ST and other categories etc.

International Factors International Factors

Estimating the Net Human Resource RequirementsEstimating the Net Human Resource RequirementsAction plan for recruitment Redeployment, Redundancy and RetrenchmentAction plan for recruitment Redeployment, Redundancy and RetrenchmentForecasting future supply from all sourcesForecasting future supply from all sourcesAction plan for recruitment, development etc.Action plan for recruitment, development etc.Modify the organisational plan Modify the organisational plan If future supply of human resources from all the external sources is estimated If future supply of human resources from all the external sources is estimated

to be inadequate or less than the requirements (share of the particular to be inadequate or less than the requirements (share of the particular firm in labour market) the manpower planner has to suggest the firm in labour market) the manpower planner has to suggest the management to alter or modify the organisational plan. management to alter or modify the organisational plan.

BPOs lay off anti-poaching agreements (E T, 21/11/2006)BPOs lay off anti-poaching agreements (E T, 21/11/2006)

Retention plan –Retention plan –1.1. Adjustment of the salary levels with those of the comparable industries Adjustment of the salary levels with those of the comparable industries

so as to remove inequalities.so as to remove inequalities.2.2. Providing opportunities for career development, provide training Providing opportunities for career development, provide training

facilities adopting the policy of promoting from within, more systematic facilities adopting the policy of promoting from within, more systematic promotional procedure, providing opportunities for self-development, promotional procedure, providing opportunities for self-development, assignment of challenging work, etc.assignment of challenging work, etc.

3.3. Introduction of effective consultation and negotiating machinery, Introduction of effective consultation and negotiating machinery, encouragement of grievance redressing and conflict resolution rather encouragement of grievance redressing and conflict resolution rather than suppressing.than suppressing.

4.4. Providing of extensive training and development facilities. Encouraging Providing of extensive training and development facilities. Encouraging the employees to participate in the management, development the employees to participate in the management, development programmes and training programmes both within and outside the programmes and training programmes both within and outside the organisation. organisation.

And programmes should be effective in meeting not And programmes should be effective in meeting not only organisational but individual needs.only organisational but individual needs.

5. Selection procedure should meet the job and 5. Selection procedure should meet the job and organisation requirements not only for the organisation requirements not only for the present position to which the candidate has present position to which the candidate has applied but also his potentialities for future jobs applied but also his potentialities for future jobs in the career line.in the career line.

6. Provide more conducive working conditions and 6. Provide more conducive working conditions and extensive fringe benefitsextensive fringe benefits

7. Provide the scope for extensive participation of 7. Provide the scope for extensive participation of the employee in decision-making and create the the employee in decision-making and create the environment that the system in the organization environment that the system in the organization is participative management but not autocratic is participative management but not autocratic management.management.

8. Provide the facilities and environment for 8. Provide the facilities and environment for conducive interpersonal relations.conducive interpersonal relations.

9. Provide the scope for challenging, creative and 9. Provide the scope for challenging, creative and innovative work.innovative work.

10. Work life-balance.10. Work life-balance.

Identification of Human Resource Identification of Human Resource Gap Gap

Gap analysis is the process of comparing Gap analysis is the process of comparing the workforce Demand Forecast to the the workforce Demand Forecast to the workforce Supply Projectionworkforce Supply Projection. A gap . A gap (projected supply is less than forecasted (projected supply is less than forecasted demand) indicates a future shortage of demand) indicates a future shortage of needed employees. A surplus (projected needed employees. A surplus (projected supply is greater than forecasted demand) supply is greater than forecasted demand) indicates a future excess in some indicates a future excess in some categories of employees which may also categories of employees which may also require action. require action.

HR STAFFINGHR STAFFING

Managing HR Gap Managing HR Gap

Demand Forecast Demand Forecast Supply Supply ForecastForecast

HR Gap

Shortage Excess/ Surplus

Two types of HR Planning for managing gapTwo types of HR Planning for managing gap 1.1. Aggregate Planning Aggregate Planning

2.2. Succession Planning Succession Planning

Shortage & Supplements Strategies Shortage & Supplements Strategies for managing shortage for managing shortage

Short TermShort Term Long Term Long Term

Short Term Short Term Increase OTIncrease OT Increase SubcontractIncrease Subcontract Increase productivityIncrease productivity Buy back vacation/leave encashment Buy back vacation/leave encashment Temporary Assignment Temporary Assignment Temporary LeavesTemporary Leaves Transfers (temporary) Transfers (temporary)

Strategy DevelopmentStrategy Development

Job class Job class modifications modifications

Compensation Compensation flexibilityflexibility

Succession Succession planning planning

Specialized Specialized recruitment and recruitment and selection selection

Customized Customized training or training or retrainingretraining

Competency- based classification Competency- based classification to get flexibility to recruit and to get flexibility to recruit and mobilizemobilize

Broad band approach in Broad band approach in compensation to get opportunitycompensation to get opportunity

Succession planning to address Succession planning to address future gaps future gaps

Attract the best talent.Attract the best talent.

Just in time training for new skills Just in time training for new skills and knowledge developments and knowledge developments keeping pace technological keeping pace technological advancements.advancements.

Retention and Retention and productivity productivity techniques techniques

Re-deployment, career Re-deployment, career transition, or transition, or separation separation

Design innovative Design innovative productivity linked productivity linked incentives.incentives.

Re-deployment plan Re-deployment plan within a given job within a given job family to successfully family to successfully get re-deployed.get re-deployed.

Job AnalysisJob Analysis A purposeful, systematic process for collecting A purposeful, systematic process for collecting

information on the important work-related aspects information on the important work-related aspects of a job.of a job.

Definition Definition Job Analysis is the aspect of employment planning Job Analysis is the aspect of employment planning

which is concerned with the study of the jobs in which is concerned with the study of the jobs in an enterprise. In particular, job analysis and the an enterprise. In particular, job analysis and the resultant job specifications clarify the following resultant job specifications clarify the following aspects of each job: the work activities; the tools, aspects of each job: the work activities; the tools, equipment, and work aids used; job-related equipment, and work aids used; job-related tangible and intangibles (such as materials used, tangible and intangibles (such as materials used, products made, services rendered) work products made, services rendered) work performance; job context (working conditions) performance; job context (working conditions) and candidate requirements (such as knowledge, and candidate requirements (such as knowledge, skills, experience and personal attributes)skills, experience and personal attributes)

In JA the following information is gathered (Glueck In JA the following information is gathered (Glueck 1978):1978):

Work activities:Work activities:– Work activities and processesWork activities and processes– Activity recordsActivity records– Procedures usedProcedures used– Personal responsibilityPersonal responsibility

Worker-oriented activities:Worker-oriented activities:– Human behaviours such as physical actions and communicating Human behaviours such as physical actions and communicating

on the jobon the job– Elemental motions for methods analysisElemental motions for methods analysis– Personal job demands, such as energy expenditurePersonal job demands, such as energy expenditure

Machines, tools, equipment and work aids usedMachines, tools, equipment and work aids used Job-related tangibles and intangiblesJob-related tangibles and intangibles

– Knowledge dealt with or applied (as in accounting)Knowledge dealt with or applied (as in accounting)– Materials processedMaterials processed– Products made or services performedProducts made or services performed

Work performance (Note: Not all JA systems develop Work performance (Note: Not all JA systems develop the work performance aspects):the work performance aspects):– Error analysisError analysis– Work standardsWork standards– Work measurements, such as time taken for a taskWork measurements, such as time taken for a task

Job Context Job Context – Work scheduleWork schedule– Financial and non-financial incentivesFinancial and non-financial incentives– Physical working conditionsPhysical working conditions– Organisational and social contextsOrganisational and social contexts

Personnel requirements for the jobPersonnel requirements for the job– Personal attributes such as personality, interestsPersonal attributes such as personality, interests– Education and training requiredEducation and training required– Work experience Work experience

Job DescriptionJob Description A job description is an account of the duties and A job description is an account of the duties and

activities associated with a particular job. A job activities associated with a particular job. A job description is prepared to identify a job, define description is prepared to identify a job, define that job within established limits, and describe its that job within established limits, and describe its content. It is typically a one or two page content. It is typically a one or two page summary of the basic tasks performed on a job summary of the basic tasks performed on a job and constitutes the role expectations relative to and constitutes the role expectations relative to that job. Job descriptions have a number of that job. Job descriptions have a number of important uses including development of job important uses including development of job specifications, work force planning and specifications, work force planning and recruitment, orientation of new employees, and recruitment, orientation of new employees, and development of performance appraisal systems.development of performance appraisal systems.

Job SpecificationJob Specification A job specification describes the characteristics A job specification describes the characteristics

required to perform the job activities outlined in required to perform the job activities outlined in the job description. They focus on the persons the job description. They focus on the persons performing the job rather than on the work itself. performing the job rather than on the work itself. A job specification may also include information A job specification may also include information on the knowledge, skills, and abilities required to on the knowledge, skills, and abilities required to perform the job, as well as such items as the perform the job, as well as such items as the education, experience, and physical attributes education, experience, and physical attributes needed for successful accomplishment of job needed for successful accomplishment of job tasks. Job specifications are the means by which tasks. Job specifications are the means by which HRM specialists identify persons with the skills HRM specialists identify persons with the skills they seek and help focus efforts to recruit them.they seek and help focus efforts to recruit them.

Job descriptions and job specifications Job descriptions and job specifications – Job Title- title of the job and other identifying information Job Title- title of the job and other identifying information

such as its wage and benefits classificationsuch as its wage and benefits classification– Summary- brief one or two sentence statements Summary- brief one or two sentence statements

describing the purpose of the job and what outputs are describing the purpose of the job and what outputs are expected from job incumbentsexpected from job incumbents

– Equipment-clear statement of the tools, equipment and Equipment-clear statement of the tools, equipment and information required for effectively performing the jobinformation required for effectively performing the job

– Environment- descriptions of the working conditions of Environment- descriptions of the working conditions of the job, the location of the job, and other relevant the job, the location of the job, and other relevant characteristics of the immediate work environment such characteristics of the immediate work environment such as hazards and noise levels. as hazards and noise levels.

– Activities- includes a description of the job duties, Activities- includes a description of the job duties, responsibilities, and behaviours performed on the job. responsibilities, and behaviours performed on the job. Also describes the social interactions associated with the Also describes the social interactions associated with the work (for example, size of work group, amount of work (for example, size of work group, amount of dependency in the work).dependency in the work).

The job specification evolves from the job description. It The job specification evolves from the job description. It addresses the question ‘What personal traits and addresses the question ‘What personal traits and experience are needed to perform the jo effectively? The experience are needed to perform the jo effectively? The job specification is especially useful in offering guidance job specification is especially useful in offering guidance for recruitment and selection.for recruitment and selection.

Summary Job AnalysisSummary Job AnalysisA process of Obtaining all Pertinent job FactsA process of Obtaining all Pertinent job Facts

Job description Job description A statement containing A statement containing

items such as items such as Job titleJob title LocationLocation Job summaryJob summary DutiesDuties Machines, tools, and Machines, tools, and

equipmentequipment Materials and forms usedMaterials and forms used Supervision given or Supervision given or

received received Working conditionsWorking conditions HazardsHazards

Job specification Job specification A statement of human A statement of human

qualifications necessary to do qualifications necessary to do the job. Usually contains such the job. Usually contains such items asitems as

EducationEducation ExperienceExperience Training Training JudgmentJudgment InitiativeInitiative Physical effortPhysical effort Physical skillsPhysical skills Responsibilities Responsibilities Communication skillsCommunication skills Emotional characteristicsEmotional characteristics Unusual sensory demands Unusual sensory demands

such as sight, smell, hearing. such as sight, smell, hearing.

Job DesignJob DesignOnce a thorough Once a thorough JAJA has been conducted and there are has been conducted and there are

high-quality job descriptions and job specifications high-quality job descriptions and job specifications available, available, an organisation can use this information to an organisation can use this information to design or re-design jobs. design or re-design jobs. This information is very useful This information is very useful for structuring job elements, duties and tasks in a for structuring job elements, duties and tasks in a manner that will help to achieve optimal performance manner that will help to achieve optimal performance and satisfaction.and satisfaction.

Job design is the personnel or engineering activity of Job design is the personnel or engineering activity of specifying the contents of the job, the tools and specifying the contents of the job, the tools and techniques to be used, the surroundings of the work, techniques to be used, the surroundings of the work, and the relationship of one job to other jobs.and the relationship of one job to other jobs.

– Work SimplificationWork Simplification– Job RotationJob Rotation– Job EnlargementJob Enlargement– Job Enrichment Job Enrichment – Scientific Management and the Mechanistic ApproachScientific Management and the Mechanistic Approach– Job Enrichment as a Motivational Approach Job Enrichment as a Motivational Approach

Job Market & Job Discrimination- Job Market & Job Discrimination- Labour Trends Labour Trends

The labour market can be viewed as a process by which the The labour market can be viewed as a process by which the supplies of a particular type of labour and the demand for supplies of a particular type of labour and the demand for the same are balanced.the same are balanced.

The main functions of labour markets are-The main functions of labour markets are-– To fix wages and other terms of employment,To fix wages and other terms of employment,– To allocate labour among occupations, jobs and employersTo allocate labour among occupations, jobs and employersA commodity market refers to physical place where buyers and A commodity market refers to physical place where buyers and

sellers of a particular commodity gather for engaging in sellers of a particular commodity gather for engaging in transactions while a labour market is viewed as a process by transactions while a labour market is viewed as a process by which supplies of a particular type of labour and demands for which supplies of a particular type of labour and demands for that type of labour are balanced, is an abstraction. Secondly, that type of labour are balanced, is an abstraction. Secondly, unlike a commodity market, the relationship between the seller unlike a commodity market, the relationship between the seller and a buyer in a labour market is not temporary and as such and a buyer in a labour market is not temporary and as such personal factors which can be ignored in a commodity market personal factors which can be ignored in a commodity market become important in a labour market. become important in a labour market.

Wage, fixing is an essential characteristic of the labour market Wage, fixing is an essential characteristic of the labour market where (in the absence of unions) the buyers of labour normally where (in the absence of unions) the buyers of labour normally sets the price but in the commodity market it is normally the sets the price but in the commodity market it is normally the seller who sets the price.seller who sets the price.

In labour market the price that is set tends to be fixed for some length of In labour market the price that is set tends to be fixed for some length of time. The labour market is far more complex than the commodity time. The labour market is far more complex than the commodity market.market.

Structured & unstructured labour marketsStructured & unstructured labour markets– We may also distinguish labour markets according to their ‘structure’. Labour We may also distinguish labour markets according to their ‘structure’. Labour

markets range all the way from the highly structured to the unstructured, markets range all the way from the highly structured to the unstructured, depending upon the presence or absence of rules covering the employment depending upon the presence or absence of rules covering the employment relationshiprelationship. .

– Phelps had defined Phelps had defined unstructured labour market “as one which contains few, if unstructured labour market “as one which contains few, if any, established intitutions by means of which people obtain market any, established intitutions by means of which people obtain market information, move into and out of jobs, qualify for advances in rank or information, move into and out of jobs, qualify for advances in rank or identify themselves with any type of organisation”.identify themselves with any type of organisation”.

– The structured labour market The structured labour market is, in general, the market of is, in general, the market of individual bargainsindividual bargains in which there are few rules affecting employment practices. The in which there are few rules affecting employment practices. The unstructured labour market has the following features:unstructured labour market has the following features:

– There are no unions with seniority rilesThere are no unions with seniority riles– Relations between employers and employees is transitoryRelations between employers and employees is transitory– Workers are unskilledWorkers are unskilled– Payment is by unit of produces and Payment is by unit of produces and – Little capital is employedLittle capital is employedThe market for domestic servants is an example of unstructured market.The market for domestic servants is an example of unstructured market.

In a structured market, institutional rules limit the In a structured market, institutional rules limit the movement of workers, they affect hiring policies and movement of workers, they affect hiring policies and often they are the deciding factor in wage often they are the deciding factor in wage determination.determination.

Indian Labour MarketIndian Labour Market– The Indian labour market is dominated by a feature called The Indian labour market is dominated by a feature called

casual labourcasual labour. The main feature of a casual labour market is . The main feature of a casual labour market is that the that the relationship between the buyer and the seller of relationship between the buyer and the seller of labour is a temporary one.labour is a temporary one.

– In India absenteeism is very high and due to a high rate of In India absenteeism is very high and due to a high rate of absenteeism and employment of ‘budlis’ a casual labour absenteeism and employment of ‘budlis’ a casual labour market has growth even in the manufacturing industries. market has growth even in the manufacturing industries.

– One of the features of the industrial labour in India is its One of the features of the industrial labour in India is its migratory character.migratory character.

– The workers are attracted to the towns, by the lure of higher The workers are attracted to the towns, by the lure of higher wages, but the instability of their employment, chronic house wages, but the instability of their employment, chronic house famine and high rents prevent them from settling down and famine and high rents prevent them from settling down and bringing their families form the village.bringing their families form the village.

Workforce DiversityWorkforce Diversity– Gender diversityGender diversity– Cultural diversityCultural diversity– Age diversityAge diversity

Job discriminationJob discrimination– Discrimination means the act of making distinctions among Discrimination means the act of making distinctions among

people or groups of people. For example, a discriminating people or groups of people. For example, a discriminating employer may make a distinction between men and employer may make a distinction between men and women for a job and choose only male applicantswomen for a job and choose only male applicants

Religious Discrimination Religious Discrimination – In USA at the early days there was religious discrimination In USA at the early days there was religious discrimination

because early settlers often came to America to escape because early settlers often came to America to escape from the religious persecution in Europe. from the religious persecution in Europe.

Racial DiscriminationRacial Discrimination– In India there is no racial discrimination in the job market.In India there is no racial discrimination in the job market.

The Older Worker The Older Worker – By the year 2000 there will be higher proportion of aged people in the By the year 2000 there will be higher proportion of aged people in the

labour force than they are now. Little attention has been given to the labour force than they are now. Little attention has been given to the older workers who are mostly above 65. In USA one-tenth Americans is older workers who are mostly above 65. In USA one-tenth Americans is over 65 years of age.over 65 years of age.

Job engineering and job reassignmentJob engineering and job reassignment. These are two things which . These are two things which companies can accomplish companies can accomplish to help the older worker. to help the older worker. Job Job engineering refers to redesigning the work stations so that the engineering refers to redesigning the work stations so that the work can be done in a way that is les taxing on the employee. The work can be done in a way that is les taxing on the employee. The work should be planned in such a way that it could be done in a work should be planned in such a way that it could be done in a sitting posture, reducing body movement or changing the flow of sitting posture, reducing body movement or changing the flow of work. Job reassignment is moving the person into a different work. Job reassignment is moving the person into a different position in which the task does not demand so much in terms of position in which the task does not demand so much in terms of dexterity or speed but just as rewarding. Older workers can dexterity or speed but just as rewarding. Older workers can become good trainers and set up men as well as rework rejects become good trainers and set up men as well as rework rejects from the production line.from the production line.

Finding employment after the age of forty become more difficult Finding employment after the age of forty become more difficult for the following reasons:for the following reasons:

Seniority and policies of promotion Seniority and policies of promotion The decline in self-employmentThe decline in self-employment Closing of plants force older Closing of plants force older Retirement age to fifty through VRS Retirement age to fifty through VRS

Employment of WomenEmployment of Women– Women’s liberation movement all over Women’s liberation movement all over

the world has changed the attitudes of the world has changed the attitudes of women towards the job. Again, equal women towards the job. Again, equal pay for equal work has become a law in pay for equal work has become a law in most of the developed countries.most of the developed countries.

– Employment of handicappedEmployment of handicapped In India it is a policy of the Govt. to reserve 2 In India it is a policy of the Govt. to reserve 2

percent vacancies for the physically percent vacancies for the physically handicapped.handicapped.

– Sons of the SoilSons of the Soil– Medical Discrimination Medical Discrimination

Trends in Labour SupplyTrends in Labour Supply Changes in the Composition of the PopulationChanges in the Composition of the Population Subgroup Participation ChangesSubgroup Participation Changes Labour Force QualityLabour Force Quality Level of EducationLevel of Education Women in the Labour ForceWomen in the Labour Force The Older EmployeeThe Older Employee Handicapped Workers in the Labour ForceHandicapped Workers in the Labour ForcePart Time & Full Time WorkPart Time & Full Time Work

Part time work has increased during the 1980s. Usually a Part time work has increased during the 1980s. Usually a part-time worker is a person who works less than the part-time worker is a person who works less than the normal rate of 40 hours a week (or whatever the country’s normal rate of 40 hours a week (or whatever the country’s norm is). To understand well the notion of part-time work, norm is). To understand well the notion of part-time work, you have to draw a distinction between voluntary and you have to draw a distinction between voluntary and involuntary part-time employees. A person who is working involuntary part-time employees. A person who is working part-time because he/she cannot get full time employment part-time because he/she cannot get full time employment is involuntarily a part-time employee for whom the position is involuntarily a part-time employee for whom the position means something different than to a co-worker who wished means something different than to a co-worker who wished for a part-time assignment. for a part-time assignment.

The major group of part-time workers are:The major group of part-time workers are:– Women: Traditionally, with the responsibilities of running homes Women: Traditionally, with the responsibilities of running homes

and child rearing, more women have preferred to work part-time. and child rearing, more women have preferred to work part-time. Furthermore, some experts have found that more husbands Furthermore, some experts have found that more husbands would rather have their wives work part time than full time.would rather have their wives work part time than full time.

– Students : in developed countries such as the US & UK, a large Students : in developed countries such as the US & UK, a large number of students between the ages 18-24 enrolled in higher number of students between the ages 18-24 enrolled in higher education institutes work part-time. In US, on the average education institutes work part-time. In US, on the average students work 20 hours a week.students work 20 hours a week.

– Retired and older persons: In order to keep active and to Retired and older persons: In order to keep active and to supplement any retirement income or social security payments, supplement any retirement income or social security payments, a number of older citizens work part-time. Most of these persons a number of older citizens work part-time. Most of these persons are highly skilled and could serve as training resources to new are highly skilled and could serve as training resources to new recruits.recruits.

– Persons with a physical or mental disability: Part-time work is Persons with a physical or mental disability: Part-time work is often more suited for handicapped and disabled persons. In often more suited for handicapped and disabled persons. In some specific disabilities, only part time work enables individuals some specific disabilities, only part time work enables individuals to work without aggravating their disabilities. to work without aggravating their disabilities.

While most part-time work is in the service industries there are also While most part-time work is in the service industries there are also numerous opportunities in the retail and wholesale trades and in numerous opportunities in the retail and wholesale trades and in manufacturing.manufacturing.

In a great number of circumstances, there are many advantages in In a great number of circumstances, there are many advantages in part time work for employees, such as flexibility in scheduling, part time work for employees, such as flexibility in scheduling, ability to ability to

Spend more time with their families, Spend more time with their families, additional compensation and stabilization additional compensation and stabilization of employment. However for employers, of employment. However for employers, there are also certain disadvantages such there are also certain disadvantages such as part-time work requiring additional as part-time work requiring additional training and record keeping expenses, lack training and record keeping expenses, lack of protecting from trade union etc. trends of protecting from trade union etc. trends unions sometimes oppose the use of part-unions sometimes oppose the use of part-timers, viewing them as robbing work timers, viewing them as robbing work opportunities from additional full-timers opportunities from additional full-timers who would become their members.who would become their members.

Trends in Labour Demand Trends in Labour Demand

India is Asia-Pacific’s cheerleader India is Asia-Pacific’s cheerleader in hiring.in hiring.

Overall rise in manpowerOverall rise in manpower– India : India : 28%28%– China :China : 16%16%– Japan :Japan : 15%15%– Malaysia :Malaysia : 8%8%– Singapore :Singapore : 8%8%

ITeS sizzles, not just in India but ITeS sizzles, not just in India but also in Asia-Pacific.also in Asia-Pacific.

Overall rise in manpowerOverall rise in manpower– ITeS :ITeS : 32%32%– BFSI :BFSI : 16%16%– Manuf:Manuf: 14%14%– ITIT :: 10%10%

As a corollary, talent crunch is rising. As a corollary, talent crunch is rising. Attrition in India is expected to cross 20% Attrition in India is expected to cross 20%

this year.this year. 20042004 :: 14%14% 20052005 :: 20%20% 20062006 :: 14%14%

Despite robust growth in the region, India is Despite robust growth in the region, India is the worst affected in Asia-Pacific.the worst affected in Asia-Pacific.

IndiaIndia :: 20%20% ChinaChina :: 15%15% KoreaKorea :: 12%12% SingaporeSingapore :: 12%12%

Why they are leaving?Why they are leaving?

There’s significant mismatch between the There’s significant mismatch between the reasons why executives leave and the reasons why executives leave and the retention strategies that companies are retention strategies that companies are deploying:deploying:

External inequity of salaryExternal inequity of salary 22%22% Limited growth opportunitiesLimited growth opportunities 21%21% Role stagnationRole stagnation 15%15% Under utilization of skillsUnder utilization of skills 9%9% Lack of recognitionLack of recognition 8%8%

Why/What companies are doing?Why/What companies are doing?

The top five retention strategies The top five retention strategies companies are using to keep them companies are using to keep them hooked:hooked:

Work –life balanceWork –life balance 11%11% Leadership accessibility Leadership accessibility 10%10% Timely & meaningfulTimely & meaningful

Feedback:Feedback: 10%10% Pay above marketPay above market 8%8% TelecommutingTelecommuting 8%8%

Tapping exit interviewsTapping exit interviews It’s a last ditch effort but India Inc is making it It’s a last ditch effort but India Inc is making it

nevertheless. The customary exit interviews are nevertheless. The customary exit interviews are being taken seriously & companies are using them being taken seriously & companies are using them to offer:to offer:

ImmediateImmediateCompensation hikesCompensation hikes 23%23%

Pay revisionsPay revisions 35%35% Immediate role Immediate role

EnhancementEnhancement 36%36% Immediate changeImmediate change

In roleIn role 50%50% Improved workImproved work

Life balanceLife balance 55%55% Improved workImproved work

environmentenvironment 55%55% Commitment to Commitment to

Career progressionCareer progression 70%70%

Long TermLong Term

1. 1. Recruit Permanent EmployeesRecruit Permanent Employees Hire Long Tenure employeesHire Long Tenure employees

2. Offer Incentives to postpone retirement2. Offer Incentives to postpone retirement

3. Rehire retired employees- Full Term /Half 3. Rehire retired employees- Full Term /Half TermTerm

4. Redesign work so that fewer employee 4. Redesign work so that fewer employee are neededare needed

5. Automise/Cybernise jobs5. Automise/Cybernise jobs

Employee Surpluses Employee Surpluses

Short TermShort Term1.1. Freeze, hires temporarilyFreeze, hires temporarily2.2. Reduce OTReduce OT3.3. Reduce Work hoursReduce Work hours4.4. Temporary Shut down / Lay offTemporary Shut down / Lay off5.5. Excuse absencesExcuse absences6.6. Temporary out assignmentsTemporary out assignments7.7. Encourage attrition Encourage attrition 8.8. Encourage sabbaticals Encourage sabbaticals

Long TermLong Term1.1. Hiring FreezesHiring Freezes2.2. No replacement for those who leaveNo replacement for those who leave3.3. Offer VRS/ERSOffer VRS/ERS4.4. Pay cutsPay cuts5.5. RetrenchmentsRetrenchments6.6. Reduce outserved workReduce outserved work7.7. Switch over to variable paySwitch over to variable pay8.8. Expand workExpand work9.9. Retrain & Redeploy Retrain & Redeploy 10.10. Transfer Transfer 11.11. Out placeOut place

Recruiting Recruiting Staffing, the process of recruiting applicants and selecting Staffing, the process of recruiting applicants and selecting

prospective employees, remains a key strategic area for human prospective employees, remains a key strategic area for human resource management. Given that an organisation’s performance resource management. Given that an organisation’s performance is a direct result of the individuals it employs, the specific is a direct result of the individuals it employs, the specific strategies used and decisions made in the staffing process will strategies used and decisions made in the staffing process will directly impact an organisation’s success or lack thereofdirectly impact an organisation’s success or lack thereof

More extensive, costly, and time-consuming than others. More extensive, costly, and time-consuming than others. Organisations have great latitude to select from a variety of Organisations have great latitude to select from a variety of staffing techniques, each of which offers various degrees of staffing techniques, each of which offers various degrees of sophistication, such benefits come at a price.sophistication, such benefits come at a price.

Trends such as broader job scope and responsibilities, the move Trends such as broader job scope and responsibilities, the move toward leaner staffing and operating with fewer full-time toward leaner staffing and operating with fewer full-time permanent employees, smaller autonomous units, pay for permanent employees, smaller autonomous units, pay for company-wide performance, flatter organisation structures affect company-wide performance, flatter organisation structures affect the types of individuals and skills that organisation seek and the types of individuals and skills that organisation seek and influence how organisations find and screen applicants. The influence how organisations find and screen applicants. The staffing process must be more strategically focused: Newer staffing process must be more strategically focused: Newer challenges and considerations must be directly incorporated into challenges and considerations must be directly incorporated into an organisations staffing strategy.an organisations staffing strategy.

Recruitment PolicyRecruitment Policy

a.a. Government policiesGovernment policiesb.b. Personnel policies of other competing organisations;Personnel policies of other competing organisations;c.c. Organisation’s personnel policies;Organisation’s personnel policies;d.d. Recruitment sources;Recruitment sources;e.e. Recruitment needs;Recruitment needs;f.f. Recruitment cost;Recruitment cost;g.g. Selection criteria and preference etcSelection criteria and preference etc

Centralized vs. Decentralized recruitmentCentralized vs. Decentralized recruitment

Source of RecruitmentSource of RecruitmentInternal Sources : Internal source include:Internal Sources : Internal source include:a.a. Present permanent employees,Present permanent employees,b.b. Present temporary/casual employees,Present temporary/casual employees,c.c. Retrenched or retired employees,Retrenched or retired employees,d.d. Dependents of decreased, disabled, retired and present Dependents of decreased, disabled, retired and present

employees.employees.

External SourcesExternal Sources

1.1. The suitable candidates with skill, knowledge, talent etc. The suitable candidates with skill, knowledge, talent etc. are generally available.are generally available.

2.2. Candidates can be selected without any pre-conceived Candidates can be selected without any pre-conceived notion or reservations.notion or reservations.

3.3. Cost of employees can be minimised because employees Cost of employees can be minimised because employees selected from this source are generally placed in selected from this source are generally placed in minimum pay scale.minimum pay scale.

4.4. Expertise, excellence and experience in other Expertise, excellence and experience in other organisations can be easily brought into the organisations can be easily brought into the organisations.organisations.

5.5. Human resources mix can be balanced with different Human resources mix can be balanced with different background, experience, skill etc. background, experience, skill etc.

6.6. Latest knowledge, skills and creative talent can be Latest knowledge, skills and creative talent can be brought into the organisation.brought into the organisation.

External sources include:External sources include:

a.a. Educational and Training Institutes,Educational and Training Institutes,b.b. Private Employment Agencis/CosultantsPrivate Employment Agencis/Cosultantsc.c. Public Employment ExchangesPublic Employment Exchangesd.d. Professional Associations,Professional Associations,e.e. Data BanksData Banksf.f. Casual ApplicantsCasual Applicantsg.g. Similar OrganisationsSimilar Organisationsh.h. Trade Unions.Trade Unions.

Staffing takes on even greater importance Staffing takes on even greater importance in the service sector, which continues to in the service sector, which continues to create the largest number of jobs in our create the largest number of jobs in our economy, a service-based economy economy, a service-based economy requires different skills and has higher requires different skills and has higher turnover costs than those associated with turnover costs than those associated with manufacturing, payroll typically assumes a manufacturing, payroll typically assumes a higher percentage of overall costs in higher percentage of overall costs in service organisations. Companies in this service organisations. Companies in this traditionally high turnover sector need traditionally high turnover sector need strategic staffing initiatives that allow strategic staffing initiatives that allow them to attract and retain productive them to attract and retain productive employees, minimizing operating employees, minimizing operating expenses.expenses.

Temporary Versus Permanent Temporary Versus Permanent EmployeesEmployees

Provide flexibility Provide flexibility In addition to hiring temporary employees In addition to hiring temporary employees

from an agency, an organisation can from an agency, an organisation can subcontract work to an outside vendor, subcontract work to an outside vendor, this is usually done on a project basis. this is usually done on a project basis.

In-house temporary employees provide In-house temporary employees provide the organisation with more flexibility the organisation with more flexibility

Efficiency than it would garner from Efficiency than it would garner from outside temps outside temps

Employees have more variety in their work Employees have more variety in their work assignments.assignments.

Internal Versus External RecruitingInternal Versus External Recruiting

The organisation already has The organisation already has performance data on employeesperformance data on employees

Promotion /Rotation from within Promotion /Rotation from within motivates employeesmotivates employees

ADVANTAGES & DISADVANTAGES OF INTERNAL ADVANTAGES & DISADVANTAGES OF INTERNAL & EXTERNAL RECRUITING& EXTERNAL RECRUITING

INTERNAL INTERNAL

Advantages Advantages

Have performance data available Have performance data available

Motivational Motivational

Less training/socialization time Less training/socialization time

FasterFaster

Less ExpensiveLess Expensive

DisadvantagesDisadvantages

Possible politicsPossible politics

Inbreeding Inbreeding

Promotion chains Promotion chains

External External Advantages Advantages

Fresh Ideas and view pointsFresh Ideas and view pointsExpand knowledge baseExpand knowledge base

Disadvantages Disadvantages Unknown entities Unknown entities Detrimental to internal applicantsDetrimental to internal applicantsTraining and socialization timeTraining and socialization timeTime- consumingTime- consumingCan be expensive Can be expensive

Methods of RecruitingMethods of Recruiting Small organisations often do their recruiting very Small organisations often do their recruiting very

informally, by work of mouth allowing the direct informally, by work of mouth allowing the direct supervisor to find someone of his or her own supervisor to find someone of his or her own choosing choosing

Ina computrised database, the skills inventory Ina computrised database, the skills inventory component of the human resource information component of the human resource information system can be used to assist in internal recruiting. system can be used to assist in internal recruiting.

External recruiting may also be done informally External recruiting may also be done informally through contact with friends, acquaintances of through contact with friends, acquaintances of existing employees existing employees

Advertising in selected mediaAdvertising in selected media Internet is one of the fastest-growing recruitment Internet is one of the fastest-growing recruitment

methodsmethods Internet gives an employer global exposure to Internet gives an employer global exposure to

potential applicants, which can be critical if potential applicants, which can be critical if particular language skills or cultural backgrounds are particular language skills or cultural backgrounds are needed.needed.

Employment agencies, more commonly Employment agencies, more commonly called staffing agencies or staffing servicescalled staffing agencies or staffing services

State job service agencies are publically State job service agencies are publically funded by the federal governmentfunded by the federal government

Private Industry CouncilPrivate Industry Council College and university on-campus recruitingCollege and university on-campus recruiting

SELECTION SELECTION Job AnalysisJob Analysis RecruitmentRecruitment Application FormApplication Form Written ExaminationWritten Examination Preliminary InterviewPreliminary Interview

Group DiscussionGroup Discussion TestsTests

i)i) Intelligence testIntelligence test

ii)ii) Aptitude testAptitude test

iii)iii) Interest test and personality testInterest test and personality test

iv)iv) Situational testSituational test

v)v) Judgment testJudgment test Final Interview Medical Examination Reference Checks Final decision by the line manager Employment

INTERNATIONAL ASSIGNMENTSINTERNATIONAL ASSIGNMENTS

To ensure the success of overseas To ensure the success of overseas assignments, employers are increasingly assignments, employers are increasingly testing employees, adaptability, open-testing employees, adaptability, open-mindedness, ability to tolerate uncertainty mindedness, ability to tolerate uncertainty and ambiguity, and independence. and ambiguity, and independence. Similarly, many are also interviewing and Similarly, many are also interviewing and screening family member adaptation either screening family member adaptation either require the employee to return home require the employee to return home before the end of the assignment or have a before the end of the assignment or have a negative impact on the employee’s negative impact on the employee’s performance. Screening employees as part performance. Screening employees as part of staffing international operation has of staffing international operation has consequently become much more consequently become much more elaborate and strategic to ensure the elaborate and strategic to ensure the success of the assignment. success of the assignment.

COMPETENCY MAPPING –A TOOL FOR COMPETENCY MAPPING –A TOOL FOR OPTIMIZING HUMAN CAPITALOPTIMIZING HUMAN CAPITAL

Outsourcing

GoalsOutsourcing refers to a contractual relationship for the provision of business services by an external provider. In other words, a company pays another company to do some work for it. Currently, outsourcing is being promoted as one of the most powerful trends reshaping management. However, organizations have always outsourced some functions.

OutsourcingOutsourcing the practice of one organization contracting with another organization to provide services or products.

Outsourcing HR functions

In HR, the functions most likely to be outsourced are temporary staffing, payroll, training, recruiting, and benefits administration.

HR Functions that may be outsourced

Compensation Recruitment and Selection

• Payroll • Advertisements• Benefits • Screening of applications• Compensation administration • Testing• Pension • Reference checking

• Preliminary interviewsTraining • Salary negotiations- at the executive• Program delivery level• Program design and development • Exit interviews• Training consulting to line departments• Training needs analysis Health and Safety• Program Evaluation• Strategic Planning for T & D • Employees assistance program• Administration • Wellness programs• Developing training policy

Small Business and HR Outsourcing

Most businesses do not hire an HR professional until the employee numbers reach about 100, or even 400. But legislated HR functions, such as payroll and benefits, are necessary for every organization, regardless of size, so small businesses turn to other small businesses specializing in HR. The advantages are the following:• Lessens the handling of routine, transactional HR work (payroll) by in-house staff• Offers access to experts who may provide advice in atypical situations (employee fraud)• Provides the management of one-of services (such as computer training)• Ensures that the company is complying with current legislation

Outsourcing is not the same as using consultants who may provide assistance on a project-by-project basis. Small businesses are looking for a long-term relationship with a provider who understands small business in general and their business in particular.

The rationale for outsourcingThere are at least six major reasons that organizations outsource:

Financial: first reason cited for the outsourcing decision is to save money. Organizations believe that costs can be reduced by outsourcing a function such as payroll.

Strategic Focus: core competence an internal activity critical to organizational success which creates a competitive advantage and influences future growth.

• Activities traditionally performed internally• Activities critical to business success. Core work contributes directly to the bottom line; non-core work doesn’t• Activities creating current or potential competitive advantage• Activities that will influence future growth or rejuvenation.

Core functions that should not be outsourced are orientation, leadership development, employee relations, final selection, performance management, and succession management, as these depend on an understanding of organizational culture, a long-term orientation, consistency, trust, and confidential information.Outsourcing allowed us to get out of low value-added administrative work and become more strategic. We now focus on health and safety, leadership development, total compensation, and employee and labour relations. Our department at head office has 12 staff today compared to 40 in 1994. But, with our change in focus, out performance within the organization has taken a quantum leap.

Technical: Technology also enables a company to reduce transaction time (the time it takes to handle a request).

Improved Service: Quality improvement is cited as another benefit of outsourcing. Performance standards can be written into the contract more tightly than may be possible with current and long-tenured employees.

Managers can choose the “best of breed” vendors that have outstanding track records and more flexibility in hiring and rewarding their employees

Specialized Expertise: Another reason cited by some companies for outsourcing is that they find the laws and regulations governing HR so complex that they decide to outsource to firms that have the specific expertise required. The motto is “Outsource when somebody can do it better than you”.

Organizational Politics: An outsourced function is not as visible as an in-house department performing the same tasks. Some organizations make the decision to outsource to get rid of a troublesome department, such as one where employees are underperforming . Outsourcing a functions also reduces the head count.

Risks And Limitations

Projected benefits vs. Actual Benefits

Service Risks

Employee Morale

Reduced Value

Management of Outsourcing

Managing the outsourcing well is critical. First, outsourcing must be subjected to a cost-benefit analysis. Can the contractor do a better job, faster, while main training service levels and meeting legislative requirements? How will this be measured? The following sections describe ways of selecting vendors, negotiating the contract, and monitoring the arrangement.

Selecting the Vendor

Negotiating the Contract

Monitor the Arrangement

Summary:

Outsourcing refers to the contractual arrangement wherein one organization provides services or products to another. There is a growing trend to outsource HR functions. The advantages of outsourcing include the reduction of costs, the increased energy and time to focus on an organization’s core competencies, access to technology and specialized expertise, which both result in increased levels of service, and the political advantages of removing a troublesome function or reducing headcount. But there are disadvantages. The anticipated benefits may not be realized. Service levels may decrease. Employee morale and commitment may be reduced, as well as the value of the organization. Managing the contractual arrangement with the service provider is the key to optimizing the benefits and minimizing the risks.

Creating excellence through Talent Creating excellence through Talent ManagementManagement

The term “Human Capital” describes the The term “Human Capital” describes the economic value of the organisation’s economic value of the organisation’s knowledge, skill and capabilities.knowledge, skill and capabilities.

Human Capital is intangible and hence cannot Human Capital is intangible and hence cannot be managed the way organizations manage be managed the way organizations manage jobs products, technology, etc. one of the jobs products, technology, etc. one of the reasons for it is that the employees, not the reasons for it is that the employees, not the organizations, own their human capital. If organizations, own their human capital. If valued employees leave the organization, they valued employees leave the organization, they take away the human capital with them and take away the human capital with them and investment made by the company in training investment made by the company in training and developing of those people is lostand developing of those people is lost

Optimizing Human Capital to gain competitive Optimizing Human Capital to gain competitive advantage is the concern of current day HR Managers advantage is the concern of current day HR Managers in all organizations, irrespective of their size and in all organizations, irrespective of their size and nature of business they are engaged in.nature of business they are engaged in.

““Successful Companies of the 21Successful Companies of the 21stst Century will be Century will be those who do the best job of capturing storing and those who do the best job of capturing storing and leveraging what their employee know”.leveraging what their employee know”.

Companies manage their human capital successfully Companies manage their human capital successfully through:-through:-

Creating a performance –oriented Creating a performance –oriented work culture work culture

Minimizing turnover of their premium employee group Minimizing turnover of their premium employee group significantlysignificantly

Maximizing Employee satisfactionMaximizing Employee satisfaction Effective investment in employee compensation and Effective investment in employee compensation and

developmentdevelopment Maintaining efficient back-up for key positions and key Maintaining efficient back-up for key positions and key

performersperformers Implementing efficient performance assessment methodsImplementing efficient performance assessment methods Reset Mind-set: This involves embedding the organization’s Reset Mind-set: This involves embedding the organization’s

value and behavior to all its employees. It is to make all its value and behavior to all its employees. It is to make all its employees realize thatemployees realize that

Potential is about future performance, not past Potential is about future performance, not past performance.performance.

Everyone has potential worth developingEveryone has potential worth developing Good technical knowledge is not the only criterion Good technical knowledge is not the only criterion

for a good managerial position but it has to be for a good managerial position but it has to be coupled with excellent people skillscoupled with excellent people skills

Recognize that business change and a focus on Recognize that business change and a focus on strategic issues require different leadership and strategic issues require different leadership and management capabilitiesmanagement capabilities

Set Focus :Set Focus : Be linked to selection, recognition, and reward Be linked to selection, recognition, and reward

process as well as to annual objectivesprocess as well as to annual objectives Be interpreted as an ongoing set of challenges for Be interpreted as an ongoing set of challenges for

overcoming resistanceovercoming resistance Build a state of change readiness to tackle future Build a state of change readiness to tackle future

business opportunitiesbusiness opportunities Identify and nurture future leadersIdentify and nurture future leaders Have a spotlight on talent with development needs in Have a spotlight on talent with development needs in

mindmind Identify most valuable employees to tackle new Identify most valuable employees to tackle new

challenges at work.challenges at work.

Assessment of talent:Assessment of talent:

A Tool for Optimizing the Human CapitalA Tool for Optimizing the Human Capital position in an organization, and using it for job position in an organization, and using it for job

evaluation, recruitment, training and development, evaluation, recruitment, training and development, performance management, succession planning etc. performance management, succession planning etc. the organization effectively communicates what it the organization effectively communicates what it actually expects from them. The competency frame actually expects from them. The competency frame work serves as the bedrock for all HR applications. work serves as the bedrock for all HR applications. As a result of competency mapping, all the HR As a result of competency mapping, all the HR processes like talent induction, management processes like talent induction, management development, appraisals and training yield much development, appraisals and training yield much better results.better results.

The human capital forms the most valuable The human capital forms the most valuable asset that can be possessed by any asset that can be possessed by any organization. Competency mapping forms an organization. Competency mapping forms an excellent tool for optimizing the human excellent tool for optimizing the human capital. By identifying the key competencies capital. By identifying the key competencies for an organization or a particularfor an organization or a particular

Competency mapping involves identifying the Competency mapping involves identifying the competencies that will be needed by people working competencies that will be needed by people working in an organization. The level of competency needed in an organization. The level of competency needed by employees at each level must also be specified. by employees at each level must also be specified. This depends on the type of job they do and the This depends on the type of job they do and the environment in which the organization functions. environment in which the organization functions. Once this is identified, the remaining process Once this is identified, the remaining process becomes easier. The next step will be to match the becomes easier. The next step will be to match the existing level of competencies with what is actually existing level of competencies with what is actually required and take measures to bridge the gap.required and take measures to bridge the gap.

..

Can a round peg fit a square hole? So can’t a Can a round peg fit a square hole? So can’t a wrong employee in a right organizationwrong employee in a right organization

The organization will have to find a correct The organization will have to find a correct person who will fulfill its expectations or will person who will fulfill its expectations or will have to chisel and shape up the existing have to chisel and shape up the existing employee to fit its expectations.employee to fit its expectations.

What is competency mappingWhat is competency mapping

Competency mapping is the process of identifying Competency mapping is the process of identifying key competencies for an organization or a particular key competencies for an organization or a particular position in an organization, and then using it for job position in an organization, and then using it for job evaluation, recruitment, training and development, evaluation, recruitment, training and development, performance management, succession planning, etc. performance management, succession planning, etc. “The competency frame work serves as the bedrock “The competency frame work serves as the bedrock for all HR applications. As result of competency for all HR applications. As result of competency mapping, all the HR processes like talent induction, mapping, all the HR processes like talent induction, management development, and training yield much management development, and training yield much better results.”better results.”

Competency and its aspectsCompetency and its aspects

Task skills: these are the basic requirements to Task skills: these are the basic requirements to perform individual skills.perform individual skills.

Task management skills: this is the ability to Task management skills: this is the ability to manage a number of different tasks within the manage a number of different tasks within the jobjob

Contingency management skills: this refers Contingency management skills: this refers ability to deal with the responsibilities and ability to deal with the responsibilities and expectations of the work environment, expectations of the work environment, including the ability to work with others.including the ability to work with others.

Core Competencies Core Competencies

Behavioral AspectsBehavioral Aspects– Ability to express ones thoughts clearly Ability to express ones thoughts clearly – Ability to make others understand youAbility to make others understand you– Ability to listen to othersAbility to listen to others– Ability to understand other Ability to understand other – Ability to write your thoughts clearlyAbility to write your thoughts clearly– Ability to summarize ones ideas in a Ability to summarize ones ideas in a

precise way precise way

Interpersonal Relationship Building AbilityInterpersonal Relationship Building Ability

Behavioral aspectsBehavioral aspects– Ability to work in groups or work as a Ability to work in groups or work as a

teamteam– Ability to initiate talksAbility to initiate talks– Ability to understand other’s problemsAbility to understand other’s problems– Ability to empathize with othersAbility to empathize with others– Courage to apologize on committing Courage to apologize on committing

mistakes.mistakes.

Negotiating AbilityNegotiating Ability

Negotiating AbilityNegotiating Ability Behavioral aspectsBehavioral aspects

– Ability to reasonAbility to reason– Ability to be ethical during the processAbility to be ethical during the process– Ability to predict the next argument of Ability to predict the next argument of

opponentsopponents– Ability to survive till the end and not to Ability to survive till the end and not to

surrendersurrender– Ability to associate various arguments and think Ability to associate various arguments and think

logically logically – Critical Thinking AbilityCritical Thinking Ability

CreativityCreativity

Behavioral AspectsBehavioral Aspects– Ability to think differently Ability to think differently – A keen sense of colorsA keen sense of colors– Ability to present differentlyAbility to present differently– Courage to accept and present the ideasCourage to accept and present the ideas

Relating six sigma to HR Strategy Relating six sigma to HR Strategy In all HR practices such strategic intent should be evident. In recruitment and In all HR practices such strategic intent should be evident. In recruitment and

selection, focus should be to select those who have multiple skill sets and who can selection, focus should be to select those who have multiple skill sets and who can be utilized interchangeably by cross lateral movement. This requires foreseeing the be utilized interchangeably by cross lateral movement. This requires foreseeing the future skill sets with the changing technology or process. Similarly regular future skill sets with the changing technology or process. Similarly regular competency mapping and a synergy between individual and organisational competency mapping and a synergy between individual and organisational competencies need to be achieved through training till they all fit for the purpose.competencies need to be achieved through training till they all fit for the purpose.

Similar importance to compensation planning, motivation and retention should be Similar importance to compensation planning, motivation and retention should be given to ensure commitment and loyalty to the organization. There are many ways given to ensure commitment and loyalty to the organization. There are many ways to design compensation innovatively and also for employees’ retention. Pro-active to design compensation innovatively and also for employees’ retention. Pro-active HR Practices, call for creating a work environment that recognizes creativity, inter-HR Practices, call for creating a work environment that recognizes creativity, inter-organizational co-operation rather than competition, working as cross – functional organizational co-operation rather than competition, working as cross – functional teams, productive meetings for innovative results, introduction of formal innovation teams, productive meetings for innovative results, introduction of formal innovation programmes and finally organisation’s receptivity to new ideas and perspectives.programmes and finally organisation’s receptivity to new ideas and perspectives.

Creativity is, therefore, the core competency.Creativity is, therefore, the core competency.

Promotion/Transfer- A tool to fill up HR Gap.Promotion/Transfer- A tool to fill up HR Gap.

HRP at the enterprise level is integrated with HRP at the enterprise level is integrated with transfer, promotion and job rotation. For internal transfer, promotion and job rotation. For internal staffing of vacancies, suitable policies on the staffing of vacancies, suitable policies on the above areas must exist, or else, the organisation above areas must exist, or else, the organisation would be constrained to frequently go for would be constrained to frequently go for redundancy, leaving its fate only to external redundancy, leaving its fate only to external hiring. For managerial and executive levels, this hiring. For managerial and executive levels, this is addressed by succession planning. For non-is addressed by succession planning. For non-executive positions, suitable policies on executive positions, suitable policies on promotion and transfer and also job rotation, promotion and transfer and also job rotation, facilitate restructuring of manpower and their facilitate restructuring of manpower and their redeployment to meet the recruitments of HRP redeployment to meet the recruitments of HRP

Job RotationJob Rotation

Job MobilityJob Mobility Job Enrichment Job Enrichment Job EnlargementJob Enlargement

Career Planning- Development & Career Planning- Development & Succession PlanningSuccession Planning

Effective HRP encompasses career Effective HRP encompasses career planning, career development and planning, career development and succession planning. Even though in this succession planning. Even though in this era of rapid technological changes, era of rapid technological changes, organisations are besieged with the organisations are besieged with the problem of manpower redundancy, problem of manpower redundancy, organisation are equally concerned with organisation are equally concerned with the problem of retention of manpower.the problem of retention of manpower.

While one way to increase retention is by extrinsic While one way to increase retention is by extrinsic motivational rein forcers, the other way obviously is to motivational rein forcers, the other way obviously is to address the need of employees, which centers around address the need of employees, which centers around individual career planning and career development. individual career planning and career development. From an organisation’s point of view also these From an organisation’s point of view also these initiatives reinforce its strategic plans and make its initiatives reinforce its strategic plans and make its goals and objectives achievable. An organisation goals and objectives achievable. An organisation without career planning and career development without career planning and career development initiatives is likely to encounter the highest rate of initiatives is likely to encounter the highest rate of attrition, causing much harm to its plans and attrition, causing much harm to its plans and programmes. Similarly, without succession planning, programmes. Similarly, without succession planning, manning of vacancies, particularly at higher levels, manning of vacancies, particularly at higher levels, becomes difficult. There are examples of many becomes difficult. There are examples of many organizations, who had to suffer for not being able to organizations, who had to suffer for not being able to find a right successor for their key positions. With the find a right successor for their key positions. With the increased scope for job mobility and corporate race for increased scope for job mobility and corporate race for global head-hunting of good performers remains global head-hunting of good performers remains awfully short. This again strengthens the need for awfully short. This again strengthens the need for effective career planning, career development and effective career planning, career development and succession planning.succession planning.

Overview of Career DevelopmentOverview of Career Development Career development essentially means the process of increasing Career development essentially means the process of increasing

an employee’s potential for advancement and career change. In an employee’s potential for advancement and career change. In other words, it is a process of planning the series of possible jobs other words, it is a process of planning the series of possible jobs which an individual may hold in the organisation over time and which an individual may hold in the organisation over time and developing strategies designed to provide necessary job skills as developing strategies designed to provide necessary job skills as the opportunity arises. Therefore, career development relates to the opportunity arises. Therefore, career development relates to the readiness for progression through a series of positions during the readiness for progression through a series of positions during an individual’s working life. Career development may be an individual’s working life. Career development may be differentiated from career planning and career management. differentiated from career planning and career management. Career development is a systematic process of guiding position, Career development is a systematic process of guiding position, whereas career planning is a process of establishing career whereas career planning is a process of establishing career objectives for an employee (or by the person himself) and objectives for an employee (or by the person himself) and developing planned strategies to achieve them including activities developing planned strategies to achieve them including activities which help in making choices with respect to occupations, which help in making choices with respect to occupations, organisation’s job assignments and self development measures. organisation’s job assignments and self development measures. Career management, on the other hand, relates to specific human Career management, on the other hand, relates to specific human resource management activities such as recruitment, selection, resource management activities such as recruitment, selection, placement and appraisal to facilitate career development. Poor placement and appraisal to facilitate career development. Poor career development programme may affect an organisation at career development programme may affect an organisation at least in two ways:least in two ways:

High employee turnover, particularly those in their beginning of High employee turnover, particularly those in their beginning of their career.their career.

Decreasing employee involvement.Decreasing employee involvement.

ADVANTAGES OF CAREER ADVANTAGES OF CAREER DEVELOPMENTDEVELOPMENT

It reduces employee turnover by providing It reduces employee turnover by providing increased promotional avenues increased promotional avenues

It improves employees morale and motivationIt improves employees morale and motivation It enables organisations to man promotional It enables organisations to man promotional

vacancies internally, thereby providing vacancies internally, thereby providing opportunities to reduce the cost of managerial opportunities to reduce the cost of managerial recruitmentrecruitment

It ensures better utilization of employees’ skill and It ensures better utilization of employees’ skill and provides increased work satisfaction to employees.provides increased work satisfaction to employees.

It makes employees adaptable to the changing It makes employees adaptable to the changing requirement of the organisation.requirement of the organisation.

OBJECTIVES OF CAREER OBJECTIVES OF CAREER DEVELOPMENTDEVELOPMENT

To attract and retain effective persons in To attract and retain effective persons in an organisationan organisation

To utilize human resources optimallyTo utilize human resources optimally To improve morale and motivation level of To improve morale and motivation level of

employeesemployees To reduce employee turnover.To reduce employee turnover. To practice a balanced promotion from To practice a balanced promotion from

within’ policywithin’ policy To make employees adaptable to changes To make employees adaptable to changes To increase employees’ loyalty and To increase employees’ loyalty and

commitment to the organisationscommitment to the organisations

CYCLES OF CAREER CYCLES OF CAREER DEVELOPMENT PROCESSDEVELOPMENT PROCESS

Exploratory Stage: Compulsory job rotation for a Exploratory Stage: Compulsory job rotation for a reasonable time period. The purpose of such job reasonable time period. The purpose of such job rotation for a reasonable time period. The rotation for a reasonable time period. The purpose of such job rotation is to allow the purpose of such job rotation is to allow the employee to select his preferred job from a wide employee to select his preferred job from a wide range of available jobs in the organization.range of available jobs in the organization.

Establishment Stage: After a new entrant choose Establishment Stage: After a new entrant choose his career from different given alternatives his career from different given alternatives (where such options are available), he needs to (where such options are available), he needs to be provided with regular feedback on his be provided with regular feedback on his performance. A successful career development performance. A successful career development process at establishment stage, therefore, is process at establishment stage, therefore, is important to retain employees in the organisation important to retain employees in the organisation and at the same time to develop a sense of and at the same time to develop a sense of loyalty and commitment to the organisationloyalty and commitment to the organisation

Maintenance Stage: This is a mid-career Maintenance Stage: This is a mid-career stage for employees who strive hard to stage for employees who strive hard to retain their established name and fame. retain their established name and fame. Therefore, at this stage employees need to Therefore, at this stage employees need to put their continuous efforts for self-put their continuous efforts for self-development this stage is crucial and development this stage is crucial and unless the organisation adopts suitable unless the organisation adopts suitable career development programmes, it may career development programmes, it may face high employee turnover face high employee turnover

Stage of Decline: Employees at this stage, Stage of Decline: Employees at this stage, being prepared for retirement, get scared being prepared for retirement, get scared from the possible threat of reduced role or from the possible threat of reduced role or responsibilities in the organization. Career responsibilities in the organization. Career development process at this stage, should development process at this stage, should aim at helping the employees to get aim at helping the employees to get mentally prepared for retirement ritualsmentally prepared for retirement rituals

Succession PlanningSuccession Planning

Succession planning involves identifying key management Succession planning involves identifying key management positions that the organisation cannot afford to have positions that the organisation cannot afford to have vacant. These are usually senior management position vacant. These are usually senior management position and / or positions that the organisation has tradionally had and / or positions that the organisation has tradionally had a very difficult time filling.a very difficult time filling.

Traditional succession planning utilizes a relatively simple Traditional succession planning utilizes a relatively simple planning tool called a replacement chart. Replacement planning tool called a replacement chart. Replacement charts identify key positions, possible successors for each charts identify key positions, possible successors for each of these positions, whether each potential successor of these positions, whether each potential successor currently has the background to assume the job currently has the background to assume the job responsibilities, or the expected amount of time it will take responsibilities, or the expected amount of time it will take for the potential succesor to be ready. Replacement charts for the potential succesor to be ready. Replacement charts are easily derived from the organisation chart and are often are easily derived from the organisation chart and are often part of the human resource information system.part of the human resource information system.

Subjective personal assessments.Subjective personal assessments. Some organisations, are much more systematic about their Some organisations, are much more systematic about their

succession planning. Their replacement charts may contain succession planning. Their replacement charts may contain specific skills, competencies, and experiences rather then specific skills, competencies, and experiences rather then subjective estimates of time readiness.subjective estimates of time readiness.

The 21The 21stst century may need to develop much larger century may need to develop much larger pools of talent with very broad sets of skills. Many pools of talent with very broad sets of skills. Many organisations are beginning to embrace the organisations are beginning to embrace the development of succession planning strategies that are development of succession planning strategies that are based more on organisation-needed competencies and based more on organisation-needed competencies and flexibility than focusing on subjective assessment of flexibility than focusing on subjective assessment of “readiness”“readiness”

Critical training and development needs of investment-Critical training and development needs of investment-oriented approach toward employees, it facilitates oriented approach toward employees, it facilitates leadership continuity through succession planning, it leadership continuity through succession planning, it facilitates strategic planning by examining the future facilitates strategic planning by examining the future availability of employees and their skill sets, it availability of employees and their skill sets, it facilitates an understanding of shifts and trends in the facilitates an understanding of shifts and trends in the labor market through an examination of job labor market through an examination of job requirements and employee capabilities, it facilitates requirements and employee capabilities, it facilitates employee development by determining the skills that employee development by determining the skills that will be needed to achieve strategic objectives as well as will be needed to achieve strategic objectives as well as to ensure future career success, it facilitates budget to ensure future career success, it facilitates budget planning and resource allocation be determining needs planning and resource allocation be determining needs for employees in response to the organisation’s for employees in response to the organisation’s strategic plan, it facilitates efficiency by estimating strategic plan, it facilitates efficiency by estimating future employee surpluses and shortage, it facilitates future employee surpluses and shortage, it facilitates the organisation’s adaptation to its environment.the organisation’s adaptation to its environment.

Importance of Succession ManagementImportance of Succession Management

Succession management – the process of ensuring that Succession management – the process of ensuring that pools of skilled employees are trained and available to pools of skilled employees are trained and available to meet the strategic objective of the organizationmeet the strategic objective of the organization

Resources for Succession ManagementResources for Succession Management

1.1. Provide increased opportunities for high-potential Provide increased opportunities for high-potential workers.workers.

2.2. identify replacement needs as a means of targeting identify replacement needs as a means of targeting necessary training, employee education, and employee necessary training, employee education, and employee development.development.

3.3. increase the talent pool of promotable employeesincrease the talent pool of promotable employees4.4. contribute to implementing the organization’scontribute to implementing the organization’s5.5. help individuals realize their career plans within the help individuals realize their career plans within the

organization.organization.6.6. Tap the potential for intellectual capital in the Tap the potential for intellectual capital in the

organizationorganization

7. Encourage the advancement of diverse groups.7. Encourage the advancement of diverse groups.8. Improve employee’s ability to respond to changing 8. Improve employee’s ability to respond to changing environmental demandsenvironmental demands9. Improve employee morale.9. Improve employee morale.10. Cope with the effects of voluntary separation programs.10. Cope with the effects of voluntary separation programs.11. Decide which workers can be terminated without damage 11. Decide which workers can be terminated without damage to the organization.to the organization.12. Cope with the effect of downsizing.12. Cope with the effect of downsizing.13. Reduce headcount to essential workers only.13. Reduce headcount to essential workers only.

Internal Versus ExternalInternal Versus External

Advantage of Internal CandidatesAdvantage of Internal Candidates• Organizations have more and better information about Organizations have more and better information about internal candidates.internal candidates.• organizations that offer career development and organizations that offer career development and opportunities to internal candidates increase commitment opportunities to internal candidates increase commitment and retention among their employeesand retention among their employees• internally developed leaders preserve corporate culture.internally developed leaders preserve corporate culture.

• Internal candidates can hit the road running, because they Internal candidates can hit the road running, because they know the organization, its people, and its processes. The other know the organization, its people, and its processes. The other employees know the internal candidate, and there is less employees know the internal candidate, and there is less internal disruption, waiting to see who the new executive is and internal disruption, waiting to see who the new executive is and what changes he or she will make. Internally chosen executives what changes he or she will make. Internally chosen executives do not replace those who report to them often as external do not replace those who report to them often as external candidates do; externally chosen candidates often get rid of candidates do; externally chosen candidates often get rid of the “old guard”.the “old guard”.• Recruitment and selection costs are lower. For example, the Recruitment and selection costs are lower. For example, the replacement cost of a CEO is estimated to be $75,0000, replacement cost of a CEO is estimated to be $75,0000, including the use of a search firm and lost opportunities getting including the use of a search firm and lost opportunities getting the external candidate up to speed.the external candidate up to speed.

Advantage of External CandidatesAdvantage of External Candidates

• The external candidate may have better skills to lead the The external candidate may have better skills to lead the organization through a major transformation or change in organization through a major transformation or change in strategy.strategy.

• The external candidate brings new knowledge and skills The external candidate brings new knowledge and skills to the organization and prevents the organization from to the organization and prevents the organization from becoming inbred and stale.becoming inbred and stale.

Succession Management ProcessSuccession Management Process

• Align succession management plans with strategyAlign succession management plans with strategy• Identify the skills and competencies needed to meet Identify the skills and competencies needed to meet

strategic objectivesstrategic objectives• Identify high-potential employeesIdentify high-potential employees• Provide developmental Opportunities and ExperiencesProvide developmental Opportunities and Experiencesi)i) Management development methodsManagement development methodsii)ii) PromotionsPromotionsiii)iii) Job RotationsJob Rotationsiv)iv)Special assignmentsSpecial assignmentsv)v) Formal training and developmentFormal training and developmentvi)vi)Mentoring and coachingMentoring and coaching

To the Manor Born?

The cult classic, ‘The Godfather’ dealt with the subject of succession planning in a rather subtle, yet non-distinctive manner. Though Michael Corleone, the youngest among the Corleone sons, didn’t have any inclination towards his father’s business, he had to reluctantly take over after his two elder brothers walked away from the scenario. Michael had neither any prior working experience nor was he versed with the nuances of the business. But since his father was keen on having one of his sons carry on the legacy, Michael wasn’t left with much of a choice. This however, is not the case in organization. Choosing a successor is not an easy task and it becomes harder when there is a need to choose between someone who has the family name and someone with the right qualifications. “Historically, successors have been chosen on the grounds of familial lineage; this is, of course, based on the premise that they are capable of taking over the reigns of the business. However, a successor

is to be judged by merit alone and the definition of merit goes beyond lineage, “says Shrikant Kulkarni, Senior VP-HR, KPIT Cummins Infosystem Ltd. Avirat Sonpal, MD Unisource Group, agrees, “ A successor should be appointed on the basis of his/her skills and his/her ability to run the business with panache and confidence. However, if the heir/heiress takes over, he/she ought to be qualified and experienced enough to be able to assume responsibility for the role that he/she is about to take on.”

Several CEOs are facing the dilemma of who to choose from since choosing a leader is an investment that the company is going to make for the long run and any wrong decision on the company’s part can have disastrous consequences.

The next in line

Succession planning has gained immense meaning in today’s world economy where the war to gain the competitive edge is severe. Successors need to possess just the right mix of work

Experience, talent and change management skills. They have to be well-versed with the organisational objectives and should be able to identify the workforce’s developmental needs. And to pick the right successor, one has to make a choice based on analytical thinking and evaluation rather than emotion. For a long time, there was a trend of companies choosing blood relatives over deserving employees, who deserved to be rightfully, the next in line. However, this outlook is slowly changing. Sonpal opines, “if the business is one’s own or family-run, the liability on the part of an heir/heiress running the business increases and so the efforts invested by an heir/heiress wouldn’t be note worthy.” He/she tends to slack a bit and he/she feels that ‘dad’ is always available in times of need. “But successors who are chosen from within the organisation would be loyal to the cause and would refrain from straying. Also, the person would be aware of the faith instilled in him/her and as a result, the individual output of the employee would also increase,” adds Sonpal. He further adds that while choosing someone from within the organisation to take on the

responsibility of such a caliber, the person concerned needs to have a clear idea of how the company functions, its ideals and principles and other intangible elements which are only acquired over time. Experts, therefore, add that an existing senior employee will have an edge over the heir/heiress to acquire the position of the CEO due to his/her tenure in the organisation.

The outside edge

Organisaitons need a successor who is a good crisis manager and is competent enough to handle the pressure and give workable solution in times of emergencies. Lack of preparation is the most frequently committed succession-planning mistake. Hence, it is necessary that employers invest a lot of time evaluating various options. Aditya Gupta, Founder and President, Infovision Group gives his take on this issue, “ One can also opt for the right fit from a different organisation. A CEO from another organisation/industry

opens an array of choices for the organisation.” Sonpal agrees, “The candidate would bring with him/her varied experience from another setting, and so he/she might be able to upgrade and positively impact the current systems and processes with his/her vast expanse of knowledge.” Kulkarni believes, “He/she will also have an ability to give direction to the company based on his/her past experience and understanding of the industries he/she has worked in.”

Quality Control

“A successor should have the ability to go the extra mile and learn the business, if she/she is new to the business. There are chances that there might be conflict within the organisation once the new successor is appointed and he/she should have the ability to tackle such situations,” says Gupta. Vivek Talwar, MD, Nitco Tiles, opines, “A successor should only be chosen by merit and not by birth. An existing employee will bring passion as well as an entrepreneurial skill to take the business to another level.

However, it is necessary to ensure that the person selected has a bit of both so that the company moves forward to another level in a structured manner.”

“One of the most important factors that a successor should possess is an ability to maintain strong relationships with key stakeholders that can be translated into an ability to bring about growth in alignment with the company’s goals. Also, he/she should have the ability to execute strategies better, quicker and more effectively, on account of formal and informal networks within the organisation and should have a well-developed value system that is in sync with the corporate culture in terms of close interaction with the leaders,” adds Kulkarni.

In the end, it’s success that counts. Choosing Michale Corleone, as the successor was a circumstantial decision and so was his success. But in an organisation, it’s one of the most important decisions that one makes. A succession planning programme should look good both on paper and in practice. In addition, it needs to be constantly, nurtured. So

the question you need to ask now is would you choose someone with the right last name or someone with the right talent?

The question of Succession To plan or Not to plan by The question of Succession To plan or Not to plan by Anita BelaniAnita Belani

Have you noticed that suddenly corporate India is asking some Have you noticed that suddenly corporate India is asking some very basic but key questions? We hear many buzz words in very basic but key questions? We hear many buzz words in recent times which were only uttered very rarely even as early recent times which were only uttered very rarely even as early as a decade ago. One such term that is bothering our corporate as a decade ago. One such term that is bothering our corporate leaders greatly is the whole issue of Succession Planning.leaders greatly is the whole issue of Succession Planning.

We are living in strange but exciting times – there is so We are living in strange but exciting times – there is so much change is the only constant in our lives at this time. much change is the only constant in our lives at this time. Organisations are going through huge amounts of growth, Organisations are going through huge amounts of growth, mergers and acquisitions and re-engineering which often brings mergers and acquisitions and re-engineering which often brings up the need for the availability of key management staff or up the need for the availability of key management staff or skills at a moment’s notice. It is no secret that talent skills at a moment’s notice. It is no secret that talent acquisition is the single most difficult thing for organizations to acquisition is the single most difficult thing for organizations to cope with today-in this increasingly competitive market it is a cope with today-in this increasingly competitive market it is a constant challenge for organizations to keep the pipeline of constant challenge for organizations to keep the pipeline of skilled and talented individuals going and there is a serious skilled and talented individuals going and there is a serious recognition of the fact that with all the growth and changes recognition of the fact that with all the growth and changes happening, highly happening, highly

skilled senior managers and experts can be required to fill skilled senior managers and experts can be required to fill critical roles at a very short notice. How does one cope with critical roles at a very short notice. How does one cope with these is sues without having a nervous breakdown? This these is sues without having a nervous breakdown? This requires a strategic approach that is as critical as and is a requires a strategic approach that is as critical as and is a tematic and flexible succession planning process that is part tematic and flexible succession planning process that is part of the DNA of the organisation. of the DNA of the organisation.

What is succession planning?What is succession planning?

Succession planning is the process that identifies and Succession planning is the process that identifies and develops employees for future openings in strategic positions develops employees for future openings in strategic positions that can arise due to changes in leadership, mergers, growth that can arise due to changes in leadership, mergers, growth into new territories etc. if done properly, Succession Planning into new territories etc. if done properly, Succession Planning forms part of a strategic & integrated human resources forms part of a strategic & integrated human resources approach that links career planning, training, potential approach that links career planning, training, potential assessment and performance appraisal. But now often do we assessment and performance appraisal. But now often do we see a structured, strategic approach like this being practiced see a structured, strategic approach like this being practiced in organisations? Typically a critical departure leads to panic in organisations? Typically a critical departure leads to panic and the knee jerk reaction is either to move a not –so-readyand the knee jerk reaction is either to move a not –so-ready

Person in the role or go outside in search of a replacement. If Person in the role or go outside in search of a replacement. If a robust succession planning process is in place it would a robust succession planning process is in place it would minimize the chance of poor choices which may cause minimize the chance of poor choices which may cause adverse impact in the form of loss in productivity, attrition, adverse impact in the form of loss in productivity, attrition, delays in execution of critical planes etc.delays in execution of critical planes etc.

A succession plan provides for a sequence of employee moves A succession plan provides for a sequence of employee moves so that a ready pool of candidates is available to fill critical so that a ready pool of candidates is available to fill critical positions in advance of their opening up. If this identification is positions in advance of their opening up. If this identification is made in a systematic manner, candidates can be mentored, made in a systematic manner, candidates can be mentored, coached trained, developed and, therefore, made coached trained, developed and, therefore, made appropriately ready to occupy specific roles as and when they appropriately ready to occupy specific roles as and when they open up. Just think about the state of the Indian cricket team open up. Just think about the state of the Indian cricket team if the universities, state leagues did not get the next breed to if the universities, state leagues did not get the next breed to Tendulkars & Dravids ready to take on the mantle as the Tendulkars & Dravids ready to take on the mantle as the senior players exit from the international scene. Granted senior players exit from the international scene. Granted organisations are a lot more complex tan a game of cricket organisations are a lot more complex tan a game of cricket but I am sure you get my drift. Imagine your national team but I am sure you get my drift. Imagine your national team with an old bunch trying to play the young, lean, mean, with an old bunch trying to play the young, lean, mean, hungry Australian team. Definitely not a pretty sight. Moral hungry Australian team. Definitely not a pretty sight. Moral

of the story? The right kind of people for the right kind of jobs of the story? The right kind of people for the right kind of jobs cannot be conjured up out of thin air and the sooner we cannot be conjured up out of thin air and the sooner we realise that the better.realise that the better.

Companies that have figured this out do realise that a Companies that have figured this out do realise that a workforce that is provided focused development through work workforce that is provided focused development through work experience and skill building is likely to stay with them experience and skill building is likely to stay with them longer.. Career development and skill enhancement are the longer.. Career development and skill enhancement are the two most critical retention tools for any organisation and the two most critical retention tools for any organisation and the importance of such processes cannot be stressed enough. importance of such processes cannot be stressed enough. Succession planning aids in this process by enabling Succession planning aids in this process by enabling organisations to identify individuals that need to developed or organisations to identify individuals that need to developed or grown for future opportunities. There is also a greater sense grown for future opportunities. There is also a greater sense of commitment & loyalty in the system because employees of commitment & loyalty in the system because employees feel that the company is investing in them, thereby enabling feel that the company is investing in them, thereby enabling retention of key high potentials. One of the key benefits or a retention of key high potentials. One of the key benefits or a well rounded career/ succession planning process is also a well rounded career/ succession planning process is also a creation of a learning culture which in turn increases the creation of a learning culture which in turn increases the engagement quotient in the organisation. As a result of the engagement quotient in the organisation. As a result of the assessment of areas that need to be developed in the assessment of areas that need to be developed in the organisation to cater to future requirements, a moreorganisation to cater to future requirements, a more

streamlined approach can be developed to understand streamlined approach can be developed to understand where the future talent supply is going to come from, what where the future talent supply is going to come from, what new roles need to be developed to manage new business new roles need to be developed to manage new business areas and thereby helping survive in the global economy.areas and thereby helping survive in the global economy.

How to Succession – plan?How to Succession – plan?

Succession planning is a future oriented process and for it to Succession planning is a future oriented process and for it to be successful the CEO has to drive it in the organisation. If be successful the CEO has to drive it in the organisation. If the top management does not support the initiative it will the top management does not support the initiative it will become just another policy that languishes on the internal become just another policy that languishes on the internal HR portal but is never really utilized to its potential. The HR portal but is never really utilized to its potential. The most important point to note is that it does not have to be a most important point to note is that it does not have to be a complicated process but if something is put in place it has complicated process but if something is put in place it has to be driven properly to maximize the potential & benefits.to be driven properly to maximize the potential & benefits.

As a first step the organisation has to decide how deep the As a first step the organisation has to decide how deep the succession plan should be created in the hierarchy. It is succession plan should be created in the hierarchy. It is recommended that the top two layers of the organisation recommended that the top two layers of the organisation and some selective critical positions below that should beand some selective critical positions below that should be

planed for. The more granular you get the harder it is to do planed for. The more granular you get the harder it is to do justice to an exercise like this. The level of detail that’s justice to an exercise like this. The level of detail that’s required to have a well thought out bench strength chart at required to have a well thought out bench strength chart at the end of this exercise will make it difficult to mange if the end of this exercise will make it difficult to mange if every position in the organisation becomes a part of this every position in the organisation becomes a part of this exercise.exercise.

As the next step a proper system should be created to As the next step a proper system should be created to analyse data on potential candidates for future roles. An analyse data on potential candidates for future roles. An executive review system which looks at past performance & executive review system which looks at past performance & potential appraisals, experience, skills, education of the potential appraisals, experience, skills, education of the individuals and has a mechanism to match these with future individuals and has a mechanism to match these with future role requirements is very important. Also of critical role requirements is very important. Also of critical importance is a way to assess personal career goals of importance is a way to assess personal career goals of individuals so that there is no mismatch in future job match individuals so that there is no mismatch in future job match ups. Comparisons of these tow inputs will help organisations ups. Comparisons of these tow inputs will help organisations understand the training & development requirements to plan understand the training & development requirements to plan for. Additionally, on the job training can also be planned for for. Additionally, on the job training can also be planned for and an assessment can be made of the gaps that exist in and an assessment can be made of the gaps that exist in management succession and skill building.management succession and skill building.

In ConclusionIn Conclusion

Organisations need to realise that succession planning is as Organisations need to realise that succession planning is as critical as creating a strategy for business success. It is a critical as creating a strategy for business success. It is a core necessity. An India moves into the top three economies core necessity. An India moves into the top three economies of the world, it is critical for organisations to be prepared to of the world, it is critical for organisations to be prepared to handle this transition with a tem that can face future global handle this transition with a tem that can face future global challenges. Succession Planning can greatly help in the challenges. Succession Planning can greatly help in the regard.regard.

Need for Manpower TrainingNeed for Manpower Training

Updating KnowledgeUpdating Knowledge Avoiding ObsolescenceAvoiding Obsolescence Improving PerformanceImproving Performance Developing Human SkillsDeveloping Human Skills Imparting Trade-specific SkillsImparting Trade-specific Skills Stabilizing the WorkforceStabilizing the Workforce

Classification of Training ProgrammesClassification of Training ProgrammesDepending on the functional level & occupational categories of Depending on the functional level & occupational categories of

employees, an organisation can classify training programmes as employees, an organisation can classify training programmes as under:under:

Level Level Nos.Nos. Types of TrainingTypes of TrainingWorkers Workers 1. 1. Introduction Introduction

2.2. Job TrainingJob Training 3.3. Craft TrainingCraft Training 4. 4. Special Purpose Training Special Purpose Training

Supervisors Supervisors 1. 1. InductionInduction 2.2. Foremanship/Shopfloor Foremanship/Shopfloor

Supervision Supervision 3. 3. Manpower Management Manpower Management

Staff MembersStaff Members 1. 1. IntroductionIntroduction 2.2. ProfessionalProfessional

3.3. TechnicalTechnical 4. 4. Human RelationsHuman Relations

Managers &Managers & ExecutivesExecutives 1. 1. InductionInduction

2.2. Executive TrainingExecutive Training 3. Training in Executive Development 3. Training in Executive Development

Skilling & MultiskillingSkilling & Multiskilling Skills of human resources have now become an Skills of human resources have now become an

important factor to address global competitiveness both important factor to address global competitiveness both at the organisational and national level. at the organisational and national level.

Skill is defined as a coordinated series of actions that Skill is defined as a coordinated series of actions that serve to attain some goal or accomplish a particular serve to attain some goal or accomplish a particular task. Operationally, skills are defined widely as overt task. Operationally, skills are defined widely as overt responses and controlled stimulation. Overt responses responses and controlled stimulation. Overt responses may be verbal, motor or perceptual. Verbal response may be verbal, motor or perceptual. Verbal response typically stresses on speaking (which requires typically stresses on speaking (which requires memorization of words), motor responses stress on memorization of words), motor responses stress on movements of limbs and body while perceptual movements of limbs and body while perceptual responses stress on understanding of sensory response. responses stress on understanding of sensory response. Controlled stimulation, on the other hand, is energy Controlled stimulation, on the other hand, is energy inputs to the workers, which we express in units of inputs to the workers, which we express in units of frequency, length, time and weight. Technological frequency, length, time and weight. Technological change and skill requirements have been made a change and skill requirements have been made a subject of investigation in many studies across the subject of investigation in many studies across the world.world.

Transformations in skill due to technological change Transformations in skill due to technological change occur along two tracks, (i) compositional shift, structural occur along two tracks, (i) compositional shift, structural change in occupational pattern due to creation or change in occupational pattern due to creation or elimination of jobs of a given skill level and the elimination of jobs of a given skill level and the distribution of persons to job in a sectoral economy and distribution of persons to job in a sectoral economy and (ii) changes in work content (the technical nature of work (ii) changes in work content (the technical nature of work and the role relations surrounding work performance).and the role relations surrounding work performance).

Internationally, the careers of the future will require Internationally, the careers of the future will require greater education (more in the form of institutionalized greater education (more in the form of institutionalized knowledge) at the job entry level and will also demand knowledge) at the job entry level and will also demand continuing education to keep pace with technological continuing education to keep pace with technological dynamism. Greater level of technological literacy even dynamism. Greater level of technological literacy even for lower skill and low paying occupations will be in for lower skill and low paying occupations will be in demand in future.demand in future.

Conventionally, skill can be defined as those knowledge Conventionally, skill can be defined as those knowledge or attributes, which are deemed vital to organizational or attributes, which are deemed vital to organizational success.success.

There are four general types of skills:There are four general types of skills: Technical skills: which relate to specific concepts, Technical skills: which relate to specific concepts,

methods and tools specific to an organization.methods and tools specific to an organization.

Supervisory skills- which enable one to effectively Supervisory skills- which enable one to effectively supervise others.supervise others.

Interpersonal skills- which enable people to Interpersonal skills- which enable people to communicate and interact effectively.communicate and interact effectively.

General Business skills- lines of business and General Business skills- lines of business and support infrastructure.support infrastructure.

Technical, skills are observable, demonstrable Technical, skills are observable, demonstrable and testable. The other skill types are softer, and testable. The other skill types are softer, more subjective and difficult to quantify.more subjective and difficult to quantify.

Any organisation going for skill renewal or skill- Any organisation going for skill renewal or skill- change exercise, needs to undertake the change exercise, needs to undertake the following tasks:following tasks:– Profile the skills required by jobs,Profile the skills required by jobs,– Assess the skill levels acquired by individuals Assess the skill levels acquired by individuals – Conduct a gap analysis between required and acquired Conduct a gap analysis between required and acquired

skill.skill.– Training should ideally occur before the skill is needed Training should ideally occur before the skill is needed

so that daily work can reinforce training.so that daily work can reinforce training.

MULTI SKILLINGMULTI SKILLING Multi skilling is defined as the process to train employees in Multi skilling is defined as the process to train employees in

specific skills that cross the traditional trade-specific or specific skills that cross the traditional trade-specific or craft-specific skill sets. Thus, to develop multi skills, craft-specific skill sets. Thus, to develop multi skills, employees require additional training to enable them to employees require additional training to enable them to perform more multi skills, employees require additional perform more multi skills, employees require additional training to enable them to perform more jobs within the training to enable them to perform more jobs within the same job family or to do the entire jobs from a holistic point same job family or to do the entire jobs from a holistic point of view. Multiskilling is often misconstrued to succeed of view. Multiskilling is often misconstrued to succeed downsizing. But downsizing occurs due to skill downsizing. But downsizing occurs due to skill obsolescence, among other reasons, while multiskilling is obsolescence, among other reasons, while multiskilling is for holistic development of human potentialities to for holistic development of human potentialities to effectively address to the requirements of changing effectively address to the requirements of changing production process (more flexible and customized ) production process (more flexible and customized ) organisational systems (decentralized control) and state-of-organisational systems (decentralized control) and state-of-art technology (numeric control, computer numeric control, art technology (numeric control, computer numeric control, direct numeric control etc.). Multi skilling facilitates intra-direct numeric control etc.). Multi skilling facilitates intra-occupational and inter-occupational job mobility and occupational and inter-occupational job mobility and thereby, reinforces HRP.thereby, reinforces HRP.

COMPETENCIESCOMPETENCIES

Competencies are set of behaviours, Competencies are set of behaviours, which encompass skills, knowledge, which encompass skills, knowledge, abilities and attributes. abilities and attributes. Competencies need to be assessed Competencies need to be assessed at the organisation and individual at the organisation and individual level. level.

ORGANISATIONAL FLEXIBILITYORGANISATIONAL FLEXIBILITY If organisations are structured along functional or specialist lines, If organisations are structured along functional or specialist lines,

there exists a rigidity which inhibits change other than marginal there exists a rigidity which inhibits change other than marginal change.change.

JOB FLEXIBILITYJOB FLEXIBILITY Jobs are grouped, job flexibility is concerned with the design or Jobs are grouped, job flexibility is concerned with the design or

content of individual jobscontent of individual jobsFLEXIBILITY IN HUMAN RESOURCINGFLEXIBILITY IN HUMAN RESOURCING A relatively small central core of highly skilled employees on A relatively small central core of highly skilled employees on

direct, permanent contracts, with the size of this workforce set at direct, permanent contracts, with the size of this workforce set at close to the minimum expected level of requirement.close to the minimum expected level of requirement.

A larger group of secondary employees, on terms such as fixed-A larger group of secondary employees, on terms such as fixed-term and temporary contracts which make it possible to change term and temporary contracts which make it possible to change their number relatively quickly and without incurring redundancy their number relatively quickly and without incurring redundancy costs.costs.

An outer ring of workers of various kinds (not employees) such as An outer ring of workers of various kinds (not employees) such as agency staff, self-employed freelance workers, contractor and agency staff, self-employed freelance workers, contractor and consultants. Their use can be changed even more rapidly than of consultants. Their use can be changed even more rapidly than of the secondary employees.the secondary employees.

Flexible Conditions of employmentFlexible Conditions of employment

From the viewpoint of a redundancy From the viewpoint of a redundancy avoidance policy, there are several avoidance policy, there are several key elements of the employment key elements of the employment package where flexibility is of utmost package where flexibility is of utmost significance. Following issues need to significance. Following issues need to be addressed:be addressed:

Contractual dutiesContractual duties Working timesWorking times Relocation schemesRelocation schemes Retirement and pensionsRetirement and pensions

Operational Approach Operational Approach

Short –term operational measures that can be Short –term operational measures that can be taken to avoid or reduce such action, in taken to avoid or reduce such action, in particular are as under:particular are as under:

Natural wastage and recruitment restrictionsNatural wastage and recruitment restrictions Stopping or reducing overtimeStopping or reducing overtime Terminating the employment of non-Terminating the employment of non-

permanent workers (temporary, casual, permanent workers (temporary, casual, fixed-term contract, self employed, agency fixed-term contract, self employed, agency employees)employees)

Retraining and redeploymentRetraining and redeployment Retirement measuresRetirement measures Volunteers for redundancyVolunteers for redundancy

People Capability Maturity Model (P-CMM)People Capability Maturity Model (P-CMM) P-CMM adapts the maturity framework of the P-CMM adapts the maturity framework of the

Capability Maturity Model for software to managing Capability Maturity Model for software to managing and developing an organisation’s workforce. To and developing an organisation’s workforce. To attract, develop, motivate, organize and retain attract, develop, motivate, organize and retain talent to continuously improve capability of an talent to continuously improve capability of an organisation. P-CMM is now widely used in organisation. P-CMM is now widely used in organisations across the world. This is designed to organisations across the world. This is designed to integrate manpower improvement with process integrate manpower improvement with process improvement programmes. Based on the best improvement programmes. Based on the best current practices in the fields such as human current practices in the fields such as human resources and organisational development, the P-resources and organisational development, the P-CMM provides organizations with guidance on how CMM provides organizations with guidance on how to gain control of their processes for managing and to gain control of their processes for managing and developing their human resource. P-CMM helps developing their human resource. P-CMM helps organisations to characterize the maturity of their organisations to characterize the maturity of their human resource practices, guides a programme of human resource practices, guides a programme of continuous continuous

Manpower development, set priorities for immediate Manpower development, set priorities for immediate actions, integrate manpower development with process actions, integrate manpower development with process improvement, and establish a culture of software improvement, and establish a culture of software engineering excellence. It describes an evolutionary engineering excellence. It describes an evolutionary improvement path from adhoc, inconsistently performed improvement path from adhoc, inconsistently performed practices to a mature disciplined development of the practices to a mature disciplined development of the knowledge, skills and motivation of the human resources.knowledge, skills and motivation of the human resources.

The P-CMM consists of five maturity levels that lay The P-CMM consists of five maturity levels that lay successive foundations for continuously improving talent, successive foundations for continuously improving talent, developing effective teams, and successfully managing the developing effective teams, and successfully managing the people assets of the organisation. Each maturity level is a people assets of the organisation. Each maturity level is a well-defined evolutionary plateau that institutionalizes a well-defined evolutionary plateau that institutionalizes a level of capability for developing the talent within the level of capability for developing the talent within the organisation.organisation.

Managing manpower redundancyManaging manpower redundancy Technological developments, global competition, Technological developments, global competition,

the emergence of a new economy and markets, the emergence of a new economy and markets, demographic and political changes are some of the demographic and political changes are some of the factors which influence organisations to go for factors which influence organisations to go for frequent adjustments in existing structure, systems frequent adjustments in existing structure, systems and processes and redefine their relationships with and processes and redefine their relationships with customers and other stakeholders to right size or customers and other stakeholders to right size or downsize workforce and more specifically managing downsize workforce and more specifically managing manpower redundancy.manpower redundancy.

There are two aspects to redundancy avoidance-There are two aspects to redundancy avoidance-long-term or strategic and short-term operational long-term or strategic and short-term operational action can be put in place as a preventive measure, action can be put in place as a preventive measure, i.e. before anything approaching a redundancy i.e. before anything approaching a redundancy situation occurs, whereas short-term or operational situation occurs, whereas short-term or operational action is taken to avoid or minimize actual or action is taken to avoid or minimize actual or imminent redundancies. The key feature of long-imminent redundancies. The key feature of long-term or strategic measures is planning. Alan term or strategic measures is planning. Alan Fowler(1999) ‘Managing Redundancy’Fowler(1999) ‘Managing Redundancy’

Assessment of the likely trends affecting the Assessment of the likely trends affecting the viability of the business. viability of the business.

Eventually be reactiveEventually be reactive Adopting of crisis management measures, Adopting of crisis management measures,

which includes making of sudden changes in which includes making of sudden changes in the constitution and size of the work force.the constitution and size of the work force.

Age & service profiles Age & service profiles Hierarchy and rigid and centralized Hierarchy and rigid and centralized

management systemsmanagement systems Be permanent full time employeesBe permanent full time employees Redundancy agreements with its trade union Redundancy agreements with its trade union

Skills, multi skilling & competency are the Skills, multi skilling & competency are the major issues concerting HRP.major issues concerting HRP.

Knowledge ManagementKnowledge Management Shortage of critical skillsShortage of critical skills Another important aspect which deserves the Another important aspect which deserves the

attention of HRP is demographic change process. attention of HRP is demographic change process. For developed countries, the problem is ageing For developed countries, the problem is ageing population, but for a developing country like India, population, but for a developing country like India, the problem is just the reverse. Our working the problem is just the reverse. Our working population is increasing at an annual rate of population is increasing at an annual rate of 1.09%. By the year 2015, we will have more 1.09%. By the year 2015, we will have more population in the working age group (15-64 years), population in the working age group (15-64 years), which would be 66.7% of the total population which would be 66.7% of the total population against the present rate of 61.2%. Therefore, we against the present rate of 61.2%. Therefore, we need to concentrate on human resource need to concentrate on human resource development in a planned manner, duly identifying development in a planned manner, duly identifying the skill requirements.the skill requirements.

Hewitt seeks futuristic talent development plan 2007Hewitt seeks futuristic talent development plan 2007

HEWITT Associates on Wednesday recommended HEWITT Associates on Wednesday recommended creation a a nodal agency for workforce creation a a nodal agency for workforce development in India, to align the education development in India, to align the education system with the skill requirements of the industry. system with the skill requirements of the industry. This would enable India to capitalize on the This would enable India to capitalize on the growing opportunities in the global offshoring growing opportunities in the global offshoring services space.services space.

““With US, UK, Japan and Singapore witnessing With US, UK, Japan and Singapore witnessing change in demographics fuelled by an expanding change in demographics fuelled by an expanding againg population, India is well positioned to meet againg population, India is well positioned to meet the shortfall of service professionals, particularly the shortfall of service professionals, particularly in software and BPO sectors. However, the in software and BPO sectors. However, the challenge is to improve the employability of our challenge is to improve the employability of our workforce to meet this surge.” Anupam Prakash, workforce to meet this surge.” Anupam Prakash, Asia lead, global sourcing and business Asia lead, global sourcing and business transformation, Hewitt Associates, said on the transformation, Hewitt Associates, said on the sidelines of a Hewitt-Nasscom summit.sidelines of a Hewitt-Nasscom summit.

Hiring to increase in Oct-Dec 2006Hiring to increase in Oct-Dec 2006

Main recruitment drivers include retail, Main recruitment drivers include retail, media, FMCG, IT and financial servicesmedia, FMCG, IT and financial services

Bangalore projects the highest business Bangalore projects the highest business outlook index point, followed by Mumbai outlook index point, followed by Mumbai and Delhi for the next three monthsand Delhi for the next three months

Even cities with index points below the Even cities with index points below the national average show more companies national average show more companies are planning to increase hiring activitiesare planning to increase hiring activities

Hiring trends are highest at 31% followed Hiring trends are highest at 31% followed by IT at 18%, production at 17% finance by IT at 18%, production at 17% finance and others at 11% administration at 8%, & and others at 11% administration at 8%, & HR at 4%HR at 4%

While India is positioned to cater to the global While India is positioned to cater to the global services requirements, the challenge is to services requirements, the challenge is to transform the raw talent into employable poll. transform the raw talent into employable poll. “Of the three million grads that India “Of the three million grads that India produces, only 15% are hirable,” he said. produces, only 15% are hirable,” he said. Hewitt has sought a comprehensive futuristic Hewitt has sought a comprehensive futuristic talent development plan for the country. talent development plan for the country. “Under standing the skill requirements of “Under standing the skill requirements of high-growth and high priority industries and high-growth and high priority industries and the skill gaps they are experiencing for entry-the skill gaps they are experiencing for entry-level talent will be key to tapping growth level talent will be key to tapping growth opportunities, “Mr prakash said.opportunities, “Mr prakash said.

JUST HOW DO YOU JUST HOW DO YOU MEASUREMEASURE

ATTRITIONATTRITION

During an analyst call of a major IT services During an analyst call of a major IT services company, a question was raised about its company, a question was raised about its attrition rate. The query was directed at the attrition rate. The query was directed at the differing number which was arrived at by the differing number which was arrived at by the company and the analyst, though both were company and the analyst, though both were right in their own way of calculating the right in their own way of calculating the figure.figure.

main methods of calculating attrition-one main methods of calculating attrition-one which is based on the last 12 month while the which is based on the last 12 month while the other being the quarter figure arrived at on an other being the quarter figure arrived at on an annualized basis. Nitin Sethi, industry leader, annualized basis. Nitin Sethi, industry leader, IT & ITeS, Hewitt Associates, says: IT & ITeS, Hewitt Associates, says: “Calculation of attrition rates in the Indian “Calculation of attrition rates in the Indian industry has been no consistent approach or industry has been no consistent approach or method to calculate attrition rats and the method to calculate attrition rats and the approach may vary from organization to approach may vary from organization to organization.”organization.”

The formula for quarter on an annualized basis’ The formula for quarter on an annualized basis’ attrition is computed on the premise of the numerator attrition is computed on the premise of the numerator divided by the denominator and it gets extrapolated divided by the denominator and it gets extrapolated for the full year. This calculation is prone to being for the full year. This calculation is prone to being impacted by the seasonality is prone to being impacted by the seasonality is prone to being impacted by the seasonality in attrition, typically impacted by the seasonality in attrition, typically which is high in June and September quarters while which is high in June and September quarters while the December and March quarters are relatively low. the December and March quarters are relatively low. In the formula of last twelve months, attrition is In the formula of last twelve months, attrition is computed on the basis of the trailing 12 months that computed on the basis of the trailing 12 months that negates any seasonality in attrition.negates any seasonality in attrition.

Further, the calculation and declaration of Further, the calculation and declaration of attrition is also an ‘unaudited’ figure as there attrition is also an ‘unaudited’ figure as there are various other elements which may or may are various other elements which may or may not be people under different categories like not be people under different categories like trainees, probationers, or even the under trainees, probationers, or even the under performers.performers.

Tarun Singh, director, Kenexa Technologies, India, Tarun Singh, director, Kenexa Technologies, India, says: “Most organization in practice do not evolve says: “Most organization in practice do not evolve robust measurements for calculating cost of a bad hire robust measurements for calculating cost of a bad hire or labour turnover. The detailed information required or labour turnover. The detailed information required and the measurement metrics are not common one-and the measurement metrics are not common one-size-fits –all formulae, but have to be designed based size-fits –all formulae, but have to be designed based on the nature of business and function of the on the nature of business and function of the organization. Thus different models and statistics organization. Thus different models and statistics may be statistics may be specific to and hold true for may be statistics may be specific to and hold true for different organization.”different organization.”

Providing and examples, Achal Khanna, Providing and examples, Achal Khanna, country general manager, Kelly Services India, country general manager, Kelly Services India, says if a company has 1,00 employees in April says if a company has 1,00 employees in April 2004 and 2,00 in March 2005, then they may 2004 and 2,00 in March 2005, then they may take their base as 2,000 in March 2005, then take their base as 2,000 in March 2005, then they may take their base as 2,000 in or as they may take their base as 2,000 in or as 1,500 (average for the year) and if the number 1,500 (average for the year) and if the number of employees who left is 300 then the attrition of employees who left is 300 then the attrition figure could be 15% or 20% depending on figure could be 15% or 20% depending on what base you take.what base you take.

The case of differing attrition rate could be The case of differing attrition rate could be perhaps linked to the growth being perhaps linked to the growth being experienced by the IT industry and the experienced by the IT industry and the pressure points in terms of supply of pressure points in terms of supply of manpower. In this people driven business, it is manpower. In this people driven business, it is imperative to have the attrition under control.imperative to have the attrition under control.

According to Bhaskar Das, vice-president- HR, According to Bhaskar Das, vice-president- HR, Cognizant, it reports attrition for the quarter on an Cognizant, it reports attrition for the quarter on an annualized basis as that’s the globally accepted annualized basis as that’s the globally accepted practice by many companies. Das says “I think practice by many companies. Das says “I think investors and analysts do find it difficult to gauge investors and analysts do find it difficult to gauge what the real attrition number is, different formulae what the real attrition number is, different formulae are used by different companies.” It is also important are used by different companies.” It is also important for the companies to project the ‘right number’ to for the companies to project the ‘right number’ to their stakeholders and its employees as any high their stakeholders and its employees as any high degree of attrition could set the ball rolling in the degree of attrition could set the ball rolling in the wrong direction.wrong direction.

Sethi says, “Since attrition rates are a very Sethi says, “Since attrition rates are a very important factor in determining the health of a important factor in determining the health of a company, they would want to adopt different company, they would want to adopt different methods of calculating attrition which will suit methods of calculating attrition which will suit them(produce lower attrition numbers). “Ms them(produce lower attrition numbers). “Ms Khanna says, “Attrition number is also a PR or Khanna says, “Attrition number is also a PR or stock/analyst statement and is prone to stock/analyst statement and is prone to dressing’ up”.dressing’ up”.

The level of attrition also directly impacts the The level of attrition also directly impacts the business of any organization. It not just the business of any organization. It not just the various costs which are associated with the various costs which are associated with the people leaving the organization, but hindering people leaving the organization, but hindering its future growth plans. A lower rate of its future growth plans. A lower rate of attrition bodes well for any organization.attrition bodes well for any organization.

Attrition also directly relates to the employee Attrition also directly relates to the employee engagement in the company as well as the confidence engagement in the company as well as the confidence of the customer in the ability of the company to of the customer in the ability of the company to deliver the services. Singh says high attrition rate deliver the services. Singh says high attrition rate affects employee morale, inhibits new people from affects employee morale, inhibits new people from joining and shakes the clients faith in it and even joining and shakes the clients faith in it and even perhaps impacts stock performance. “In some case it perhaps impacts stock performance. “In some case it can be simply seen as an organisation’s competitor can be simply seen as an organisation’s competitor appreciating its quality of hires and the output, post-appreciating its quality of hires and the output, post-training- almost a backhanded compliment, “ says Ms training- almost a backhanded compliment, “ says Ms Khanna.Khanna.

Bhaskar says, “ In the information technology Bhaskar says, “ In the information technology industry people are the core assets. It there is industry people are the core assets. It there is frequent change there would be discontinuity frequent change there would be discontinuity in providing the same level of experience to in providing the same level of experience to customers,” he adds. He says attrition data is customers,” he adds. He says attrition data is also used to find out whether any employee also used to find out whether any employee engagement process needs to be tweaked to engagement process needs to be tweaked to build stronger businesses.build stronger businesses.

Given this background on the differing view-Given this background on the differing view-points on attrition, is there a need for own points on attrition, is there a need for own common standard of defining attrition or a set common standard of defining attrition or a set of methodologies, which could actually define of methodologies, which could actually define how it needs to be calculated.how it needs to be calculated.

““Absolutely,” says Sethi, “We need a common Absolutely,” says Sethi, “We need a common standard for the industry. It is very difficult to arrive standard for the industry. It is very difficult to arrive at industry and company benchmarks if the method of at industry and company benchmarks if the method of calculating is different from company to company.”calculating is different from company to company.”

Singh feels it would probably be difficult to arrive at Singh feels it would probably be difficult to arrive at a common standard for calculating attrition for a common standard for calculating attrition for various reasons which may range from organizations various reasons which may range from organizations experiencing high attrition rates and also employee experiencing high attrition rates and also employee turnover which needs to be split up into component turnover which needs to be split up into component parts like employees who leave within a year of parts like employees who leave within a year of joining or those who are asked to leave due to low joining or those who are asked to leave due to low productivity.productivity.

TV Mohandas Pai, director, HR & Training TV Mohandas Pai, director, HR & Training Infosys says, reporting attrition is a new Infosys says, reporting attrition is a new phenomenon for any industry especially for IT phenomenon for any industry especially for IT sector and it is still a evolving process.sector and it is still a evolving process.

He says it is upto to the individual companies He says it is upto to the individual companies to choose the methods it would like of to choose the methods it would like of calculating attrition and feels that a common calculating attrition and feels that a common standard would evolve over a period of time.standard would evolve over a period of time.

Costs involved in Attrition

• Administration cost• Sourcing cost

i) Agency cost ii) Advertising cost

• Recruitment cost • Training & Development cost • Replacing an employee (Compensating for knowledge loss- learning curve).

A Nasscom- Hewitt Associates survey says that the cost of attrition in the industry is 1.5 times the annual salary.

Reasons for attrition

1. Better prospects2. Further education3. Health4. Marriage5. Migration6. Others7. Personal8. Termination

Others include Proximity to residence, Night shifts, Relocation and Dropouts. Personal include relations with other employees, Unhappiness/dissatisfaction, children at home, family etc.

Attrition’s like rust, innovate to fight it

Wipro BPO HR head V Anandkumar is co-authoring a book on the BPO industry. The book, meant to be a guide for every entrant to the industry, looks closely at the issues from an employee and employer perspective. Mr. Anandkumar discusses with Writankar Mukherjee various challenges for Indian BPO industry.

Can you provide a figure for the cost of attrition which the Indian BPOs are paying?

Attrition is like rust. During a simulation exercise, we realized that for a $200 million call centre with 15,000 people and 100% attrition, the cost of attrition would be $25 million. This equals the entire profit of the company (assuming the company makes a profit of 12.5%). Companies need to look at using this kitty to come up with tangible solutions for attrition.

What is the root cause of attrition?

Let’s look at the Service Level Agreements (SLA’s) that BPOs sign with utilization at 85%. This means that in 60 minutes, an agent will be on call for 51 minutes. Extrapolate that to 8 hours a day that’s 408 minutes out of 480. it’s humanly impossible to do this day after day. Since the payment terms with the customer is linked to achieving this SLA – the employees get driven to the wall – longer hours and close performance monitoring adds to the stress.

Indian call centre agents, on an average, earn less than $3000 per year against the global average of $18,000. With one of the lowest rates in the world, we strive to deliver the highest customer satisfaction and also the highest profits. The combination of these low rates, high SLA’s and the desire for a high profit creates a bubbling cauldron which is the cause of high attrition. However, companies run their captives at much lesser stringent SLA’s than what they sign off with the third party vendors – that’s one of the reasons

why captives have much lower attrition.

BPOs are now focusing on tier II and III markets. Do you think this model will work?

In metros, costs are spiralling – the rentals in Mumbai alone have gone up by more than three times in the last four years. Pune, Delhi, Bangalore, Hyderabad and Chennai are still able to manage but fast approaching saturation. As a result, companies will now set up 1,000 seat centres in smaller towns – this will help reduce attrition initially when you are the first mover – but when others follow the problem may crop up again. Cost of recruitment in smaller cities is lesser, but investment in training will be higher. But with the rupee gaining and profitability getting affected, companies have to think innovatively-benefits out of squeezing operational efficiency are fast drying up. Setting up centres in college towns like Manipal and Vallabh Vidyanagar can help you get part-time workers.

With Indian BPOs setting up facilities overseas, what are the HR challenges?

BPOs will be amongst the first Indian companies to employ large number of people overseas. Managing team of 1,000 – 2000 people overseas requires a different mindset. Transferring people from here is not the solution – you need to hire and integrate the local workforce. Integrating them culturally is a challenge. The largest of Indian companies have an India-centric mindset and even brand initiatives with Indian names. In such a case, communication is critical and lots need to be done on this front.

The Economic Times 30 Oct, 2007.