McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Human Resource Planning  Discuss how to align a company’s strategic direction with its human resource planning.  Determine the labor demand for workers in various job categories.  Discuss the advantages and disadvantages of various ways of eliminating a labor surplus and avoiding a labor shortage. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 3 Chapter

Importance of HR Planning  The importance of planning  The importance of HR planning

Importance of HR Planning A. Definition:  Hr planning is to make predictions of future needs of the organization according to the organization goals and develop action plans for meeting the needs in the future. Question: Who will make the HR plan? What’s the roles of line manager and HR manager? And when?

B. Objectives:  To ensure the attainment of organization goals. Meeting future HR needs—critical to success.  To improve the efficiency of human resources. Rational use of people—recruitment and development.  To motivate employees. Meeting the needs of self-actualization—training and development.

C. Type and features  Types of HR Planning:  Long-term plan: 5years and above.  Mid-term plan: 2 to 4 years.  Short-term plan: 1 year.  Features of HR planning:  Consistency: consistent to organization goals.  Continuity: between long-term, mid-term and short-term.  Flexibility: adapting according to change.  Accuracy: be as close as possible to reality.

Stages in Human Resource Planning  Forecasting  Labor Demand  Labor Supply  Goal Setting and Strategic Planning  Program Implementation and Evaluation McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Forecasting Stage of Human Resource Planning  Determining Labor Demand  derived from product/service demanded  external in nature  Determining Labor Supply  internal movements caused by transfers, promotions, turnover, retirements, etc.  transitional matrices identify employee movements over time  Determining Labor Surplus or Shortage McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Factors of HR Demand  External Environment of Organization  Internal Environment of Organization  HR itself

Factors of HR Supply  Regional factors  Nation-wide factors

Strategies for Reducing an Expected Labor Surplus OptionSpeedExtent of Human Suffering Fast Slow High Moderate Low 1. Downsizing 2. Pay reductions 3. Demotions 4. Transfers 5. Work sharing 6. Hiring freeze 7. Natural attrition 8. Early retirement 9. Retraining McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Strategies for Reducing an Expected Labor shortage OptionSpeed Revocability Fast Slow High Moderate Low 1. Overtime 2. Temporary employees 3. Outsourcing 4. Retrained transfers 5. Turnover reductions 6. New external hires 7. Technological innovation McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Downsizing  Downsizing is the planned elimination of large numbers of personnel designed to enhance organizational competitiveness.  Reasons for downsizing include:  need to reduce labor costs  technological changes reduce need for labor  mergers and acquisitions reduce bureaucratic overhead  organizations choose to change the location of where they do business McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Effects of Downsizing  Studies show that firms that announce a downsizing campaign show worse, rather than better financial performance.  Reasons include:  The long-term effects of an improperly managed downsizing effort can be negative.  Many downsizing campaigns let go of people who turn out to be irreplaceable assets.  Employees who survive the staff purges often become narrow-minded, self-absorbed, and risk-averse. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Early Retirement Programs  The average age of the U.S. workforce is increasing.  Baby boomers are not retiring early for several reasons:  improved health of older people  a fear that Social Security will be cut  mandatory retirement is outlawed  Many employers try to induce voluntary attrition among older workers through early retirement incentive programs. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Employing Temporary Workers  Hiring temporary workers helps eliminate a labor shortage.  Temporary employment affords firms the flexibility needed to operate efficiently in the face of swings in demand.  Other advantages include:  temporary workers free a firm from many administrative tasks and financial burdens  temporary workers are often times tested by a temporary agency  many temporary agencies train employees before sending them to employees McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

Outsourcing and Offshoring  Outsourcing is an organization’s use of an outside organization for a broad set of services.  Offshoring is a special case of outsourcing where the jobs that move actually leave one country and go to another.  To help ensure the success of outsourcing:  outsource only those jobs that are repetitive, predictable, and easily trained.  Choose an outsourcing vendor that is large and established.  Jobs that are proprietary or require tight security should not be outsourced.  It is a good idea to start small and monitor constantly. McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved.

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