PEOPLE RESOURCING Chapter Six Human Resource Planning: Relevance and Debates

The use of HR planning in practice Few employers actually give the function a high profile. In a 1990 CIPD study, only three planning activities were found to be undertaken formally and regularly by most employers: identification of future training needs; analysis of labour costs and productivity; and assessment of the need for structural change resulting from business plans. Fewer than half carried out formal forecasts of supply and demand of labour, and less than 20 per cent formally monitored HR planning practices

A variety of reasons have been put forward to explain the apparent abandonment of HR planning techniques: Hostility to the use of statistical techniques in place of managerial judgement The view that while desirable, HR planning is not essential to organisational effectiveness – with funding therefore being diverted elsewhere The prevalence of a short-termist outlook in UK industry. Long- term planning is often neglected because it is unlikely to enhance individual management careers Practical problems associated with inadequate historical data on which to base forecasts Ignorance of the existence of HR planning techniques, and of mathematical methods in general Traditional planning no longer ‘fits’ the modern approach to management – shorter time horizons and a focus on flexibility.

The case against HR planning The main problem with forecasting is its reliance on past experience to predict future developments. This means that one-off events which fundamentally alter the environment cannot be included in the forecasts. Although relevant in the 1960s and 1970s in the context of a relatively stable business environment, it is no longer applicable in the increasingly unpredictable world of the twenty-first century. Competitive advantage today, according to HR planning critics, comes from generating responses to fast-changing circumstances that are swifter, more creative, and more flexible than those of competitors – qualities that are stifled by the characteristics of the planning process.

The case for HR planning The need to view plans as adaptable. Turbulence requires more attention to planning. It is both possible and desirable to plan for uncertainty. The emphasis in HR planning will be on maximum future flexibility. The objectives of HRP all play a useful role in the management of organisations: -recruitment -training and development -staff costing -redundancy (allowing remedial action and mitigating the extent) -collective bargaining -accommodation (office space, car parking, etc).

Adapting traditional HR planning Micro-planning: concentrating on defined staff groups Contingency planning: preparing possible responses to a variety of potential environmental developments Succession planning: focusing on the recruitment and development of individuals to fill the top few posts in an organisation as they become vacant Skills planning: predicting what competencies will be needed one to five years from now, leaving open the question of the form in which these will be obtained (which may include temporary staff, contractors and consultants) Soft human resource planning: forecasting the likely supply of and demand for particular attitudes and behaviours rather than people and skills.

HR planning in an international context The globalisation of organisations has a number of direct implications for the HR planning function: the requirement for language skills the need to move skilled employees and managers from country to country inherent instability associated with international business activity varying labour market conditions and cultural norms. To be effective in an international company, there should be an HR planning function in every region/country, each focusing on developments in its own labour market and reporting to a central coordinating department.

Evaluating HR planning processes Three criteria for evaluation: The extent to which the outputs of HR planning programmes continue to meet changing circumstances The extent to which programmes achieve their cost and productivity objectives The extent to which strategies and programmes are re-planned to meet changing circumstances. It is hard to effectively evaluate HR planning because activities are not one-off affairs – planning is an ongoing activity in which forecasts are continually reviewed. It is the effectiveness of strategies developed on the back of the HR planning process that provides the most meaningful evaluation criteria.