3 IntroductionHuman Resource Planning is concerned with the flow of people into, through, and out of an organisation. HR planning necessarily involves a focus on employees, changing skill levels and the way in which those skills match organisational needs
5 Definition:The systematic and continuing process of analysing an organisation's human resource needs under changing conditions and developing personnel policies appropriate to the long term effectiveness of the organisation. It is an integral part of corporate planning and budgeting procedures since HR costs and forecasts both affect and affected by long-term corporate plans
7 ROLE OF HUMAN RESOURCE PLANNING To determine and facilitate the levels and types of recruitment that may be requiredTo assess current levels and attributes of staffing and determine whether reductions are necessaryTo assess whether redeployment can be used as an alternative to downsizingTo identify the need for training and developmentTo assess current employment costs in relation to other organisational costs.
9 HARD AND SOFT HR PLANNING HARD HRP SOFT HRPForecastingDefine where the company is nowAnalysisMonitoring and reviewDefine where it wants to be in the futureAnalysing the external environment, influences and trendsFormulating plans to implement necessary changes
10 HUMAN RESOURCE PLANNING Right number of people with right skills at right place at right time to implement organizational strategies in order to achieve organizational objectivesIn light of the organization’s objectives, corporate and business level strategies, HRP is the process of analyzing an organization’s human resource needs and developing plans, policies, and systems to satisfy those needs
14 HRP ProcessInterfacing with strategic planning and scanning the environmentTaking an inventory of the company’s current human resourcesForecasting demand for human resourcesForecasting the supply of HR from within the organization and in the external labor market
16 HRP Process Cont. Comparing forecasts of demand and supply Planning the actions needed to deal with anticipated shortage or overagesFeeding back such information into the strategic planning process.
18 THE PROCESS OF HRPCOLLECT INFORMATION & ANALYSIS OF EXISTING RESOURCESFORECAST DEMAND FOR HUMAN RESOURCES-SHORT AND LONG TERM-AGGREGATE OR INDIVIDUAL POSITIONSFORECAST SUPPLY OF HUMAN RESOURCES-INTERNAL SUPPLY-EXTERNAL SUPPLYPLAN AND CONDUCT NEEDED PROGRAMS-Increase or reduce workforce size-change skill mix-develop managerial succession plans-develop career plansMONITORING THE IMPLEMENTATION OF THE PLAN-Where the forecasts accurate?-Did the programs meet the needs?
20 1. ANALYSIS OF THE WORKFORCE INVENTORIES OF THE EXISTING WORKFORCESUCCESSION PLANS-to determine the type and calibre of managers available to succeed senior or middle managers who retire or leaveMOVEMENT OF EMPLOYEES-promotions and transfersUSE OF STAFF-overtime working, Absenteeism, ineffective or wasted time or efficiency in the use of labourLABOUR TURNOVER-an analysis of the rates at which staff are leaving employment 7 of trends of such turnoverCOSTS-to know at which point recruitment becomes most cost-effective than increased overtime working.
22 2. FORECASTING THE DEMAND FOR HR Demand forecasting methods can be divided into two categoriesJUDGEMENTAL METHODMATHMATICAL METHODSJUDGEMENTAL METHODS-Bottom up or Unit Forecasting-Top down Forecasting-Delphi techniqueMATHEMATICAL METHODS-Productivity ratio:-Direct to Indirect staffing ratio
24 3.FORECAST SUPPLY OF HR THE INTERNAL SUPPLY OF LABOUR THE EXTERNAL SUPPLY OF LABOUR-The external labour market-demographic change-labour immobility-early retirement-Changing employment patterns(e.g robotics in car manufacture, computer aided design/manufacture,JIT, e-commerce)-Changing patterns of work (e.g part-time workers, flexible workforce etc)
28 5. IMPLEMENTATION OF THE PLAN ACQUISITION STRATEGIES: Which define how the resources required to meet forecast needs will be obtainedRETANTION STRATEGIES: Which indicate how the organisation intends to keep the people it wants.DEVELOPMENT STRATEGIES:Training and development programmesUTILISATION STRATEGIES: which indicate intentions to improve productivity and cost-effectiveness.FLEXIBILITY STRATEGIES: How the organisation can develop more flexible work arrangements.DOWNSIZING STRATEGIES: Which define what needs to be done to reduce the numbers employed
30 Example of the Basic Human Resource Planning Model Open new product lineOpen new factory and distribution systemDevelop staffing for new installationProduction workersSupervisorsTechnical staffOther managersRecruiting and training programs feasibleTransfers infeasible because of lack of managers with right skillsRecruit skilled workersDevelop technical training programsTransfer managers from other facilities2314Develop new objectives and plansRecruit managers from outside3Too costly to hire from outside5
32 Link 1: Determine Demand (labor requirements) How many people need to be working and in what jobs to implement organizational strategies and attain organizational objectives.Involves forecasting HR needs based on organizational objectivesInvolves consideration of alternative ways of organizing jobs (job design, organizational design or staffing jobs)Example - Peak production could be handled by temporary workers or assigning overtime. Machine breakdowns assigned to maintenance department or handled by machine operators
34 Link 2: Determine HR Supply (availability) Choose HRM programs (supply)Involves forecasting or predicting effect of various HR programs on employee flowing into, through and out various job classifications.First determine how well existing programs are doing then forecast what additional programs or combination of programs will doNeed to know capabilities of various programs and program combinations
36 Determine Feasibility Links 3 & 4 Capable of being doneRequires knowledge of programs, how programs fit together and external environmental constraints (e.g., labor force, labor unions, technology created skill shortages) and internal environmental constraints (skill shortages within the organization, financial resources, managerial attitudes, culture)Do the benefits outweigh the costsDifficulty in quantifying costs and benefits
40 Human Resource Forecasting Process of projecting the organization’s future HR needs (demand) and how it will meet those needs (supply) under a given set of assumptions about the organization’s policies and the environmental conditions in which it operates.Without forecasting cannot assess the disparity between supply and demand nor how effective an HR program is in reducing the disparity.
42 Shortcomings of the model - HRP in Practice Oversimplification of the benefit of planning is the specific plans that resultPlanning process has value in and of itselfHRP in practice is usually less rational and may omit one or more of the stepsMay lack knowledge required for forecastingIncorrect assumptions about effectiveness of HR programsDoes not engage in strategic planningResistance to change present HR systems
44 HRP should be:Done to guide and coordinate all HR activities so they work together to support the overall strategyResponsive to internal and external environmentPlanning - done in advanceStrategic - linked with higher level planning
46 Human Resource Forecasting Process of projecting the organization’s future HR needs (demand) and how it will meet those needs (supply) under a given set of assumptions about the organization’s policies and the environmental conditions in which it operates.Without forecasting cannot assess the disparity between supply and demand nor how effective an HR program is in reducing the disparity.
48 Forecasting as a Part of Human Resource Planning Choose human resource programsSUPPLY FORECASTINGDEMAND FORECASTINGDetermine organizational objectivesInternal programsPromotionTransferCareer planningTrainingTurnover controlExternal programsRecruitingExternal selectionExecutive exchangeDemand forecast for each objectiveAggregate demand forecastInternal supply forecastExternal supply forecastDoes aggregatesupply meetaggregatedemand?Aggregate supply forecastNoYesGo to feasibility analysis steps
50 Internal Supply Forecasting Information Organizational features (e.g., staffing capabilities)Productivity - rates of productivity, productivity changesRates of promotion, demotion, transfer and turnover
58 System Sophistication Organizational sizelarge organizations require more complex forecasting systems and likely to have the required skilled staffOrganizational complexitycomplex career paths and diverse skill requirements lead to more complex forecasting systemsOrganizational objectivesthe greater the gap between current HR situation and desired HR situation the more sophisticated the systemOrganizational plans and strategiesthe complex the plans are the more complex the forecasting system
60 Forecasting Time Frame Depends on degree of environmental uncertaintyFactors creating uncertainty (shortening time frame)many new competitors, changes in technology, changes in social, political and economic climate, unstable product demandFactors promoting stability (longer time frame)strong competitive position, slowly developing technology, stable product demand.