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HUMAN RESOURCES PLANNING

HUMAN RESOURCES PLANNING

INTRODUCTION

human resource planning

Human Resources Planning have been a function of management since the origins of the modern industrial organization.

Human Resources planning mean different means to different organizations. To some companies, human resources planning mean management development. It involve helping executives to make better decisions, communicate more effectively, and know more about the firm. The purpose to make men and women better managers. The emphasis is having current managers who are sucked in there function and reasonably qualified for promotions. Too frequently the acquisition and development of the skills and knowledge needed for the future are lacking. The goal is often only to make the manager a better manager today.

WHAT IS HUMAN RESOURCES PLANNING?

Human Resources planning is a process by which management determine how the organization should move from its current manpower position to its desired manpower position. Through planning, management strives to have the right number and the right kinds of people, at the right place, at the right time, doing things, which result in both organization and the individual receiving maximum long-run benefits. It is four-phased process. The first phase involves the gathering and analysis of data through manpower inventories and forecasts, the second phase consist of establishing manpower objectives and policies and gaining top management approval of these. The third phase involves designing and implementing plans promotions to enable the organization to achieve its manpower objectives. The fourth phase in consumed with control and evaluation of manpower plans sent programs to facilitate progress to benefits both the organization and the individual. The long run view means that gains may be sacrificed in the short run for the future grounds. The planning process enables the organization to identify what its manpower needs is and what potential manpower problems required current action. This leads too more effectively and efficient performance.

OBJECTIVES OF THE HUMAN RESOURCES PLANNING

1. To ensure optimum use of human resources current employees.

2. To assess or forecast future skill requirement.

3. To provide control measures to ensure that necessary resources are available as when required.

A number of specified reasons for attaching importance to manpower planning and forecasting exercises are:

  • To link manpower planning with the organizational planning
  • To determine recruitment levels.
  • To anticipate redundancies.
  • To determine optimum training levels.
  • To provide a basis for management development programs.
  • To cost the manpower.
  • To assist productivity bargaining.
  • To assess future accommodation requirement.
  • To study the cost of overheads and value of service functions.
  • To decide whether certain activity needs to be subcontracted, etc.

The HR forecasts in responsible for estimating number of people and the jobs needed by an organization to achieve its objectives and realize its plans are time in the most efficient and effective  manner possible in the simplest sources, HR needs are computed by subtracting HR supplies or numbers of the people available from expected HR demands or number of people required to produce at a desired level. It is a strategy for acquisition, utilization, improvement and preservation of the human resources of an enterprise. The objective is to provide right personnel for the right work and optimum utilization of the existing human resources. HRP exists as the part of planning process of business. This is the activity aims to coordinating requirements for the availability of the different types of employers. The major activities are include the forecasting, (future requirements), inventorying (present strength), anticipating (comparison of present and future requirements) and planning (necessary program to meet the requirements).

The objectives of human resource planning may be summarized as below:

ü  Forecasting Human Resources Requirements: HRP is essential to determine the future needs of HR in an organization. In the absence of this plan it is very difficult to provide the right kind of people at the right time.

ü  Effective Management of Change: Proper planning is required to cope with changes in the different aspects which affect the organization. These change needs continuation of allocation/ reallocation and effective utilization of HR in organization.

ü  Realizing the Organizational Goals: In order to meet the expansion and other organizational activities the organizational HR planning is essential.

ü  Promoting Employees: HRP gives the feedback in the form of employee data which can be used in decision-making in promotional opportunities to be made available for the organization.

ü  Effective Utilization of HR: The data base will provide the useful information in identifying surplus and deficiency in human resources.

The objectives of HRP is to maintain and improve the organizational capacity to reach its goals by developing appropriate strategies that will result in the maximum contribution of HR. HR planning should involve in the following areas:

  • They should collect, maintain, improve and interpret the relevant information regarding human
  • resources.
  • They should report periodically human resource objective and requirements, existing employees, and allied features of human resources.
  • They should develop procedures and techniques to determine the requirements of different types of human resources over period of time from the standpoint of organizational goals.
  • They should develop the measures of HR utilization as components of forecast of human resources requirements along with independent validation.
  • They should employ suitable techniques leading to effective allocation of work with a view to improving human resources utilization.
  • They should conduct research to determine the factors hampering the contribution of the individuals groups to the organization with a view to modifying or removing these handicaps.
  • They should develop and employ methods of economic assessment of human resources to reflect its features as income generator and cost and accordingly improve the quality of decisions affecting the human resources.
  • They should evaluate the procurement, promotion, and retention of the effective human resources.
  • They should analysis the dynamic process of recruitment, promotion, and the loss to the organization and control these process with a view to maximizing the individual and the group performances without involving high cost.

It is usually the top management that formulates the vision and translates the vision into the objectives. Further, these objectives get translated into strategy and long-range plans. These plans usually form the guidelines for the human resources department to plan for the human resources requirements. The HR department should coordinate the above information and prepares the human resources plan.

 

NEEDS OF HRP

Major reasons for the emphasis on HRP at the Macro level:

Employment-Unemployment Situation: Though in general the number of educated unemployment is on the rise, there is acute shortage for a variety of skills. This emphasis is the need for more effective recruitment and retaining people.

Technological Change: The myriad changes in production technologies, marketing methods and management techniques have been extensive and rapid. Their effect has been profound on the job contents and job contexts. These changes cause problems relating to redundancies, retaining and  redeployment. All these suggest the need to plan manpower needs intensively and systematically.

Organizational Change: In the turbulence environment marked by cyclical fluctuations and discontinuities, the nature and pace of changes in organizational environment, activities and structures affect manpower requirements and require strategic considerations.

Demographic Change: The changing profile of the work force in terms of age, sex, literacy, technical inputs and social background has implications for HRP.

Skill Shortage: Unemployment does not mean that the labour market is a buyer’s market. Organizations generally become more complex and require a wide range of specialist skills that are rare and scare. Problems arise when such employees leave.

Governmental Influences: Government control and changes in legislation with regard to affirmative action for disadvantages groups, working conditions and hours of work, restrictions on women and child employment, causal and contract labour, etc. have stimulated the organizations to be become involved in systematic HRP.

Legislative Control: The policies of “hire and fire” have gone. Now the legislation makes it difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but difficult to shed the fat in terms of the numbers employed because of recent changes in labour law relating to lay-offs and closures. Those responsible for managing manpower must look far ahead and thus attempt to foresee manpower problems.

Impact of the Pressure Group: Pressure groups such as unions, politicians and persons displaced from land by location of giant enterprises have been raising contradictory pressure on enterprise management such as internal recruitment and promotion, preference to employees’ children, displace person, sons of soil etc.

Systems Approach: The spread of system thinking and advent of the macro computer as the part of the on-going revolution in information technology which emphasis planning and newer ways of handling voluminous personnel records.

Lead Time: The log lead time is necessary in the selection process and training and deployment of the employee to handle new knowledge and skills successfully.

 

Approaches to Human Resources Planning

 

On the theoretical plane there are three options to any educational planner. The first option is to treat the education as consumption goods and demand for education as an aggregate of individual consumer’s demand schooling, and to provide the facilities for education and training according. The second option is to view education an investment goods, evaluate the investments in education at par with investment in education with the rate of return on investment in physical capital. The third option is to considered skilled manpower as basic inputs to the production goods and services within the economy; assess the skill requirements to achieve any predetermined economic growth target, and to gear the expansion of educational system to provide the needed education and training.

There are three approaches to educational planning:

  • Social demand approach
  • Rate of return approach, and
  • Manpower requirement approaches.

 

Social Demand Approach: The social demand approach lies on the assessment of society’s requirement for education. In principles, it is an aggregate of individuals demand for education in respect of all individuals within the society. It is not always possible particularly in large societies, to assess individual demand for education. In practice, therefore, social demand approach relies on a projection of past trends in demographic aspects of population and the enrollment at the different levels of education.

Social demand approach is thus capable of revealing the number of students with differently types

of professional preparations that may be a given target date, based on past experiences. Projections of

social demand for education are contingent upon given levels of:

  • Income of educated people,
  • Taste and references of household for education,
  • Demographic characteristics such as fertility and mortality,
  • Direct costs of education,
  • Student grants, and
  • Existing standard of admission to various levels of education.

Added to these constraints, there are the perennial problems associated with the data base on demographic aspects at disaggregated levels such as districts, blocks and villages and data on wastage and stagnation in education, and intensity of utilization of existing educational facilities. Social demand approach thus suffers from the difficulties associated with any futurological exercise.

 

Rate of Return Approaches: Critics of social demand approach argue that the decision to choose

more or less of education, beyond a legal school-learning age, is made by an individual who attaches

a positive value to the present and the future benefits of education. Aggregate of individuals demand

for education, which is constructed the social demand for education, should then be based exaggerate

of individuals assessment of benefits of education-reflecting the social benefits.

This brings us the rate of return approach to education:

Rate of return approach looks upon education as a contributor to productivity and this sense, it is expected to facilitate investment decisions in education whether or not the students should undergo

more schooling, or whether or not the state should invest more and expand educational facilities.

Like in the rate of return on investment analysis, rate of return on investment in education is used

to expand educational facilities until schooling equalizes.

  • On the one hand yield of investment in different types of education, and
  • On the other hand yield of investment in education vis-à-vis other sectors of economy.

Manpower Requirement Approach: The fundamental axioms of manpower requirements approach is that there is a definite link between the education and economic growth and that lack of skilled manpower in required number impedes growth. In this approach an attempt is made to forecast future requirements of educated manpower to fulfill a future target of Gross National Product (GNP) or specified targets of industrial production. Based on the forecasts of educated manpower requirement over a specified period, the planners would then indicate the directions of development of the educational sector over the same specific period.

The basic steps involved in this exercise are as under:

  • Anticipating the directions and the magnitude of development of each individual sectors of the economy.
  • Evolving norms of the employing manpower in each individual sector keeping the view the
  • Technological options—Present as well as future—for each sector of the economy.
  • Translating the physical targets for the development of each individual sector into the manpower requirement using the sector specific manpower norms.
  • Estimating the educational; equivalents of the manpower requirement.
  • Analyzing the implications of estimates of educated manpower requirements for educational

development, based on assumptions regarding the enrollment rates, transitions probability and

wastage and the stagnation rates at the each level of education.

Limitations of the Manpower Requirement Approach:

The first limitation assumes that the educated manpower of different types are used in fixed proportions and that there no substitutions possibilities among the various categories of educated manpower.

The second limitation is that it postulates a definite link between an industrial task and an educational level. Prices, either in terms of cost of producing educated manpower or in terms of salaries and wages of educational people do not play any role in matching demand with supplies of educated manpower in this brand of educational planning. This makes the good sense if formal education and training is the only means of producing educated manpower. If there are alternative ways of producing a given category of skilled manpower, then prices play a significant role and the manpower requirements approach fails to take cognizance of this respect. In the Indian context, even in the case of highly skilled occupation where graduate level engineers are required, it has been observed that over 30 per cent of the manpower do not have the basic minimum qualification. They have reached these levels through on-the-job training and such other informal training, in the requisite skills. Such persons are categorized as “practical” and these practical are to be found in every occupation.

The crucial information in all forecasting exercises is the assumptions about the distant unknown

future. Any error in judgment, in this regard, will seriously affect manpower balances at a later date

resulting in either excess supply or excess demand. In the context of educational planning, excess

demand is relatively easier to manage. Excess supply, on the other hand, leads to serious economic

and sociological problems which are often difficult to deal with.

HUMAN RESOURCE PLANNING PROCESS

Often we express that the most important asset in organization is our people. Without the right people,

it is unlikely that even the most comprehensive and business plans/strategies will deliver negative

performances. The vast majority of organization comes when the right people with right knowledge,

skills and behaviour are deployed throughout an organization.

HR planning is how to achieve that match of skills, knowledge and behaviours. It is about:

  • Developing an understanding of everything possible about the internal and external environment

and how these will affect our current and future workforce. It is about understanding the make up of our current workforce and the necessary skills, capabilities and aptitudes that will be required to achieve business outcomes in our current and changing environment.

  • It is about assuring that we link our human resources strategies with business outcomes and that

our workforce plans reflect those initiative/strategies and provide our managers with a framework for making informed decisions in line with our managers with a framework for making informed decisions in the line with our mission, strategies plan and financial resources.

  • Also, it provides the opportunity for longer term thinking about future service pressures and

needs, and what you need to do now to get workable strategies in place not only for the employees development, but for strategies financial and human capital management.

HR planning has a critical role to play in delivering improved services and is an important issue for

an organization. At its simplest, HR Planning is a planning process and analytical capability to measure and compare the current workforce (supply or faces) with the future workforce (demand or space). This planning process provides insight into the best policies and initiative needed to improve the overall

human resources system. It has a critical role in developing personnel requirements/data elements,

which should be linked to strategic organizational planning, budgeting processes and all recurring

recruitment needs, training recruitments and planning activities. There is no one set of model of workforce planning but the underlying concepts are similar. All models are concerned about analyzing your current workforce, and then extending that analysis to identify the future skills and competencies needed to deliver new and improved services that are aligned with achieving the organizational mission. (Demand and supply analysis) The comparison between the present workforce and desired future workforce will highlight your shortages, surpluses and competency gaps, whether due to external pressure or internal factors. (Gap Analysis) These gaps become the focus of each detailed workforce plan in identifying and implementing strategies that will build the relevant skills and capacity needed for organizational success.

An ideal Human Resources Planning System should be:

  • Holistic in its approach linked with strategies planning and budget process.
  • Built around our service needs and skills required to deliver quality service.
  • Responsive to change variables i.e., economic, technological, political, environmental mandate.
  • Supportive of continual learning and development concepts.
  • Data driven that allow for scenario building because of changing assumptions for different desired outcomes.

Before beginning the human resources planning process, you have to need to have a firm grasp on main drivers for workplace planning and any influence of those drivers on the human resources planning exercise being done. These drivers set the context for everything you will be looking at throughout this process. The four main drivers for any human resources planning are:

Organization Directions: Includes the organizational plans, budget forecasts new technology,

working practices, organizational culture and reward systems.

 

Internal labour: Which includes a determination of human resources profile by multidimensions (gender, age, grade, occupations, length of services etc.); identification of any internal management issues like retention, separation, promotion patterns, etc. identify potential area of our workplace that are vulnerable to current or future skills gaps imbalances and look at geographical issues that could be the cause of issues identified. All of these factors have implications for recruitment and retention of our workforce across the organization.

 

External Labour: Demographic change in our potential workforce is affecting both the demand for services and workforce supply to fill our vacancies.

 

Business Change: Technological changes are leading to changes in service/information delivery,

way of working and the skills needed in the workforce. Consequently, this will change the competencies

for positions and how we need to recruit, hire and engage our current and future workforce.

The scope of human resources planning is to build a longer term context within which short-term

staffing decisions can be made. Human resources planning is a living process and needs to be

periodically reviewed in order to respond to changing circumstances. Regular monitoring will ensure

that organizational element will avoid strategic drift and ensure that organization’s human resource

planning remain current. This process is still about the ensuring that sufficient people with the right

skills are in place to deliver a seamless service to the internal and external stakeholders.

 

Five Phases for Human Resources Planning

1. Analyzing: What are the key human resources information needed?

2. Forecasting: Demand versus supply analysis.

3. Planning: Identification of stretogy

4. Implementing: Exemling the new stratogy

5. Evaluating: Feedback on effective of outcomes.

 

Analyzing: What are the key human resources information needed?

The over all human resources planning system should be well thought out, systematic and well

documented. The effectiveness of planning depends on the detail, accuracy and reliability of the

information sources. It is important to identify all factors that could influence future demand for

output/services as well as competencies of the internal and external supply of labour. Information

gathered during the analyzing phase must be reliable and accurate as this will be the basis of the

forecasting phase.

The begin the analyzing phase; there are four information sources that will provide key human

resources information needs. These includes; Organization direction and environmental factors

(demand analysis); internal and external labour (supply analysis). Each sources is listed below and

provides the ways to collect this information. The organization simply analyzing the supply (current

workforce profile) against the demand (future workforce profile).

Suggested checklist for organization information:

  • Demand Analysis.
  • Strategic plan/Business priorities.
  • Internal or External reports that could affects business outcomes.
  • Budget Estimates (Short-Term and Long-Term).
  • Plans for New Technology.
  • Employee Survey Information.
  • External Contract Services.
  • Organization Culture.
  • Changing Competencies.

 

Forecasting: Demand versus Supply analysis

Forecasting is considering the future needs of organization. One of the most useful outcomes of this phase is the identification of potential problems or issues facing your organization. This analysis will be based on the data collected from the information sources in the analyzing phase. The result of this phase will help to develop the gap analysis and emergent strategies to manage the future. It involves the identification of any predicted changes and/or developments that may result from demand and analysis. Business elements may have varying issues identified based on needs of their organizations. The aim is to create necessary resources/strategies to optimize the future position of organization. There are four steps in forecasting phase; identifying key workforce assumptions, validating assumptions, utilizing assumptions for scenario building and performing the gap analysis.

The first step is to identify key workforce assumptions/issues for the elements based on the data/ information collected from the information sources during the analyzing phase. Ensure that all of these forecasting assumptions describe the potential impact on business element, any inherent risks and any likelihood of occurrence based on element culture.

The second step is to validate these assumptions by utilizing focus groups or administrating questionnaires/interviews to various leaders in the organization. The feedback provided will ensure that gathered assumptions are valid and based on the basic data available. Additionally, feedback should provide insight in the reasoning behind the assumptions.

The third step is utilizing these assumptions in scenario buildings. Scenarios are a way to develop alternative futures based on different combinations of assumptions, facts and trends that will help the organization’s forecasting goals mentioned earlier. Scenarios are generally descriptive statements resenting a particular picture of the future that includes comments on the probability of certain events occurring. Moreover, scenarios are usually accompanied by qualitative or quantitative information.

The next step after outlining best, worst and most likely scenarios is to create a preferred scenario detailing what organization wants as an outcome taking into account the assumptions previously identified. Additionally use the information from any warning indicators above which should be used to monitor changes consistent with preferred outcome.

It will be useful to apply SWOT or PESTLE analysis to help through this phase. SWOT is an acronym for Strength, Weakness, Opportunities and Treats. Strengths and Weaknesses are internal factors. Opportunities and Treats are external factors. It is a simple technique as it uses four perspectives for decision-making and summarization. For example what are the strengths, weakness, opportunities and threats of your scenario? This would be done for each scenario suggesting the best, worst and most likely outcomes. PESTLE is essentially the same technique but is useful for examining the external factors affecting a problem. The acronym stand for Political, Economic, Sociological, Technological, Legal and Environmental.

 

The tools (SWOT and PESTLE) are useful for handling the qualitative data. Either tool will help to organize and promote thinking about issues or problems that are facing the organization. It will help to clarify/identify the organizations future trends and to apply to those trends to the organization to help explicitly identify any underlying assumptions and to set priorities. The using the SWOT analysis, step one is to identify organizations assumptions and utilize the matrix using the demands and supply information obtained in the analysis phase. Step two is to identify organizations assumptions/key workforce issues from step one and take into account the potential impact on your business elements, potential impact on assumptions, risk inherent in the assumptions and the likelihood of its occurrence.

The final phase of forecasting is performing Gap Analysis. After completing your preferred scenario the organization need to look back at your current workforce and your future demands to identify any gaps in skills, people needed to meet preferred scenarios etc. Demand is based on the preferred scenario and competencies/skills need to meet demand requirements. The Gap Analysis should indicate the skills gap, surplus any recruitment issues and retentions issues to meet the demand etc. Organization should continue this exercise for each scenario until you have developed your suggested strategy/initiative/action to deal with the preferred outcomes to meet organizations needs.

 

Techniques of Forecasting

The HRP must lead an organization through the process of determining how many employees the organization needs and the characteristics that those employees should have to facilitate the accomplishment of organizational. Human Resources Planning is the process of determining how to staff the organization with the right employees at the right time and in the right place. HR planning is increasingly indistinguishable from organizational strategic planning in those organizations where human capital is the critical factor in organizational success. For the purposes of discussion and explanation in this section, it is assumed that organization has completed its strategic-planning process and determined its strategic goals and objectives. The purpose of workforce planning then becomes to determine the characteristics needed in the organization’s workforce to facilitate achievement of those objectives. In this scenario, workforce planning is strategic planning at the HR level and involves similar processes, including a SWOT analysis, which occurs at the organizational level. In simplistic terms, the HR function must determine the numbers and types of employees needed and evaluate the availability of both internal and external individuals having the correct characteristics. Based on these analyses, a determination can be made as to the proper HR programmatic activities required to achieve the correct workforce composition. Workforce planning then involves three stages: forecasting workforce needs, determining internal and external supply of employees, and developing appropriate strategies to achieve forecasted needs in relationship to projected supply. These three processes are discussed in the following sections.

 

Forecasting Workforce Needs

 

The organization’s strategic plan and allied business plan provide guidance as to the number and type of employees that the organization needs during the planning period. Expansion, retrenchment, new products or services, introduction of new technology, entrance of new competitors in the market, economic conditions, employee retirements, workforce turnover, and so forth must be considered when forecasting workforce needs. Forecasting is the process of using both historical data and predicted scenarios to determine workforce needs during a stated planning period. Following is a discussion of several forecasting methods that are often used.

Trend Analysis

 

Trend analysis involves studying historical organizational employment levels to predict future employment levels. For example: If, on average, employment levels in the organization have increase 5% per year, it might be logical to forecast a 5% increase for the next planning period. A more accurate forecast using this method might be to evaluate trends in separate departments or other organizational subentities and then aggregate the increases (or, potentially, decreases) at the organizational level. Doing so provides more specificity as to not only the numbers of employees but also the types of employees needed.

Trend analysis assumes that history will repeat itself. In today’s more volatile times that might not be the case. However, trend analysis provides some data on which a final forecast can be made.

Ratio Analysis

 

Ratio analysis is a forecasting technique that assumes a set relationship between one variable and nother, and that the relationship allows for the prediction of workforce needs. Assuming no increases in productivity, an organization might be able to predict total workforce requirements based on predicted total sales or total productivity. For example: If, historically, it takes five employees for each 100,000 unit of product produced, a projected increase of 1,000,000 units per year will require an additional 50 employees. Organizations often have standard staff tables that can be used in ratio analysis. As an example, a restaurant chain would know how many servers, cooks, managers, and so forth are needed to staff a restaurant. Based on a projected expansion in terms of number of restaurants, increase in workforce needs can be forecast.

 

Turnover

Analysis of historical turnover—in reality a type of trend analysis—provides additional data for forecasts. Average turnover rates provide an indication of the number of new employees required just to maintain current employment levels. Obviously, turnover is affected by many environmental factors, most notably unemployment rates, so other variables must be considered when using these data for forecasting.

Nominal Group Technique

The nominal group technique is a group-forecasting and decision-making method that requires each member of the group to make an independent forecast prior to discussion of any forecasts. Members of the group meet and independently develop a forecast. Each member must present his or her forecast before any of the forecasts are discussed. After all presentations are made and clarifying questions addressed, the group works to come up with a final forecast.

 

Delphi Technique

The Delphi technique is another group forecasting method in which experts independently develop forecasts that are shared with each other, but in this approach the experts never actually meet. Each of the members refines his or her forecasts until a group consensus is reached.

 

Group Think

The nominal group and Delphi techniques are used to avoid the phenomenon known as group think. Group think occurs when group members, in the interest of developing group cohesiveness, reach consensus without fully considering what might be divergent forecasts.

 

Managerial Judgment

Managers and executives are asked, based on their experience and knowledge, to develop forecasts. Forecasts, like budgets, can be a top-level overall estimate or a bottom-up aggregation of multiple departmental estimates. Top-level forecasts provide a gross indicator of needed employment levels, but do not indicate where those employees should be allocated in the organization. Bottom-up forecasts, provided by managers in the various departments, provide a better idea of allocation of the workforce and the types of employees that are needed. However, bottom-up forecasts tend to overestimate workforce needs as each manager tries to increase staff size.

 

Statistical Forecasts

Statistical analysis was discussed in Chapter 2 in the section on research. Various statistical procedures, including regression analyses, can be used to develop forecasts based on scenarios or theorized relationships between variables.

 

Computer Modelling

Many organizations use sophisticated forecasting software. This permits the organizations to evaluate workforce needs under various scenarios.

Multiple Methods

In the final analysis, no single forecasting method is likely to be accurate every time. Most organizations use multiple methods to develop different forecasts. Ultimately, it is likely to be a top-level manager, using intuition based on accumulated knowledge and years of experience, that makes the final determination of the most likely forecast.

 

Determining Internal and External Supply of Employees

 

Not only must the demand for employees be determined, but workforce planning must include an analysis of the potential supply. Forecasts must be made of the supply of candidates for jobs within the organization and the supply external to the organization in the relevant labour market. Methods of forecasting supply, internally and externally, are discussed in the following section.

Internal Supply

 

The internal supply of candidates can be determined using a number of methods, such as replacement charts, succession plans, human resource management information systems, and departmental estimates. A brief discussion of each of these methods follows.

Replacement Charts

 

Replacement charts are manual or automated records indicating which employees are currently ready for promotion to a specific position. If needs are forecasted for a particular job, replacement charts provide data with which to determine the supply of internal candidates to fill the openings.

Succession Planning

The concept of succession planning is similar to replacement charting except the time perspective is different. Succession planning is the process of identifying candidates for future openings. It is a longer-term plan for developing candidates to fill positions. Traditionally, succession planning has been reserved for only high-level positions. However, because of the increased importance of human capital in many organizations, succession plans are being developed for the orderly replacement of lower-level employees.

Human Resource Management Information Systems

Many human resource management information systems frequently contain data on qualifications or skills of current employees. After workforce demand is forecast, the database can be queried regarding the supply of potential internal candidates that possess the necessary qualifications or skills.

Departmental Estimates

Organizations are not static. Most organizations and their component departments experience constant flows of employees both in and out. Analysis of this movement provides valuable information to forecast internal supply.

External Supply

There is a huge amount of information available to assist in the forecasting external supplies of labour. State and local economic and workforce development agencies typically can provide data on the labour supply availability. The department of labour has data available for virtually any location and publishes annual forecasts of labour supply by occupation, and the Bureau of Labour Statistics provides a wide variety of labour force information that is available online. In addition, various professional organizations regularly analyze labour availability within their respective professions. The availability of external candidates is affected by:

  • Economic conditions.
  • Unemployment rates.
  • College and high school graduation rates in the relevant labour market.
  • Net migration in or out of the area.
  • Relative skill levels of potential candidates in the labour market.
  • Competition for labour in the labour market.
  • Changes in the skill requirements of the organization’s potential job openings.

You should be familiar with the various methods of forecasting both demand for and supply of

employees and candidates.

 

Determination of Strategies

The analysis of demand and supply for labour leads the SPHR to develop appropriate strategies to achieve the planned level of employment. The result of the analysis can result in one of three conditions:

  • Equality: In which case the strategy becomes one of retaining current employees.
  • Insufficient number of employees: In which case the strategy becomes recruitment.
  • Too many employees: In which case the strategy becomes decruitment.

Retention of employees involves strategies designed to maintain or improve job satisfaction and organizational commitment. They are discussed throughout this entire book as they apply to a particular program area. For example, retention strategies involve creating pay equity and providing desired benefits when compensation and benefits strategies are being developed. Both recruitment and decruitment (organizational exit) are discussed later in this chapter. It would be very similar if the analysis reveals that only one of the conditions from the preceding list exists. However, that is not often the case and the SPHR frequently finds that some departments are currently staffed appropriately for future needs during the planning period, whereas some departments have too many employees and others too few. Thus, strategies of recruitment, decruitment, and retention must be developed simultaneously and interdependently because the recruitment objectives of one department can often serve to fulfill the decruitment objectives of another. It provides a basis for understanding two major programmatic activities that are discussed later in this chapter: recruitment and selection. Assuming that an expansion of the workforce is required, strategy determination is affected by the forecasts of yield rates and the timeframes required for each step in the recruitment and selection process. Yield rates are a comparison of the number of applicants or potential applicants at one stage in the recruitment/selection process with the number of applicants that remain available at the next stage. To determine programmatic activities and action plans, the SPHR must work backward from the total number and types of employees that will be needed, including dates on which they will be needed. Based on experience, moderated by any projected changes in timeframes or yield rates, the planning process must incorporate an evaluation of the scope and timing of activities to produce the desired results.

 

Planning: (Identification of Strategy)

After completing the surplus/demand analysis, gap analysis, scenario building exercise, SWOT etc. you will begin the planning phase. Strategies, initiatives and programs and policies should be developed to address the gaps identified in the analyzing phase. This will ensure that your element will recruit, develop and retain the critical staff needed for a successful workforce plan. A few factors should be considered when deciding upon strategies to address a workforce gap. Human resources planning should include a wide range of strategies around staff development, succession planning, redeployment, recruitment, technology improvement, competitive sourcing, changes in work practices etc. The organizational HR plans should be flexible to address workforce but it must be quite realistic.

 

Implementating: Executing the New Strategies

 

After organization have analyzed, forecasted and planned, it is critically important to put together an implementation plan to carry out the planned activities included in the human resources plan. This will be the process of using all the information gathered in the previous phases and devising a plan to execute the new strategies. There are a few basic considerations that should be addressed before beginning the implementation plan. These includes organization support, allocating the different resources required, clarifying the roles and responsibilities, identifying who is involved in implementing what and where coordination among different parts of the organization or with different agencies is  needed, establishing timeliness, determining performances measures and communicating the plans.

 

Evaluating: Feedback on Effectiveness of Outcomes

 

Evaluation of organizations human resources plan is imperative in determining if the devised strategies are address the gaps specified. It is important to obtain feedback concerning the effectiveness of outcomes. There are several methods in getting feedback such as surveys, focus groups, meetings etc. regardless of the methods, effectiveness of strategies.

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