Human Resources Management

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HUMAN RESOURCE
PLANNING
Chapter 2
By S.Chan
BA Department
Human Resources Management
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Importance of HR Planning
To ensure the predetermined number of persons
with the correct skills are available at a specified
time in the future.
To systematically identify what must be done to
guarantee the availability of the human resources
needed by an organisation to meet its strategic
business objectives.
HR planning cannot be undertaken in isolation. It
must be linked to the organisations overall
business strategy.
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Organisation strategy and human resource planning
Organisation strategy
HR planning
Determine number and types of jobs to be filled.
Match human resource availability with job openings.
Retrenchment strategy
Downsizing
Business sale
Shut down
Growth strategy
Internally generated
growth
Acquisitions, mergers
or joint ventures
Stability Strategy
Maintain status quo
(-)
(0)
(+)
FEED-
BACK
Source:Asia Pacific Management Co. Ltd. 2001
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HR planning and Strategic HRM
HR planning is a part of the strategic planning process
Must consider the environmental influences on an
organisation, its objectives, culture, structure and HRM .
Must reflect the environmental trends and issues that affect
an organisations management of its human resources.
Must consider Government regulations relating to for
example conditions of employment, EEO, industrial relations.
Other examples include demographic changes, the
casualisation of the work force, employee literacy etc.
Consider the growing trend of women in the workforce
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Quantitative Approach of HR planning
Sees employees as numerical entities and groups
them according to age, sex, experience, skills,
qualification, job level, pay, performance rating or
some other means of classification.
The focus is on forecasting HR shortages, surpluses
and career blockages;
its aim is to reconcile the supply and demand for
human resources given the organisations objectives.
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Trend Projection
Trend projection or time series analysis
predictions work by projecting trends of the past
and present into the future.
This technique is based on the assumption that
the future will be a continuation of the past.
Econometric Modelling
Econometric modelling and multiple predictive
techniques involve building complex computer
models to simulate future events based on
probabilities and multiple assumptions.
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HR planning
Determine number and type of jobs to be
filled.
Match human resource availability with job
openings.
Human resource
demand
Human resource
supply
Human resource
requirements:
numbers
skills
qualifications
occupation
performance
experience
career goals
Human resource
inventory:
numbers
skills
qualifications
occupation
performance
experience
career goals
Variances
Nil
No action
If surplus
Stop recruiting
Reduce casual and part-time
employment
Start early retirements
Start retirements
Start retrenching
Reduce working hours
If shortage
Increase overtime
Increase casual and part-time
employment
Postpone retirements
Start recruiting
Accelerate training and
development
Use outsourcing
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The Qualitative Approach
Uses expert opinion (usually a line manager) to
predict the future
E.g. the marketing manager will be asked to estimate
the future personnel requirements for the marketing
department).
The focus is on evaluations of employee
performance and capacity for promotion as well as
management and career development
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Delphi Technique
A refinement on this basic approach is the Delphi
technique: a panel of experts such as key line
managers make independent anonymous predictions
in answer to questions relating to HR planning.
The responses are analysed by the HR department and
the confidential results are fed back to the experts
along with another series of questions.
The managers revise their original estimates in light of
this new information. This process is repeated until a
consensus forecast is obtained.

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FORECASTING HUMAN
RESOURCE AVAILABILITY
Once the HR manager has estimated the HR needs of
the organisation, the next challenge is to fill the
projected vacancies.
Present employees who can be promoted, transferred,
demoted or developed make up the internal supply.
Constraints may apply on the use of both internal and
external labour supplies (for example, a promotion
from within policy, union restrictions, management
preference and government regulations).

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Forecasting the supply of Internal
human resources
1. Turnover analysis
A detailed analysis of why people leave organization.
The best sources of this analysis --- Labour turnover
rates from past years.
Turnover for each job classification and department
should also be calculated because turnover can vary
dramatically among various work functions and
departments.
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2. Skills Inventory
This consolidates basic information on all employees.
HR manager thus can:
identify qualified employees for different jobs
determine which skills are present or lacking in the
organisation
assess longer term recruitment, selection and training
and development requirements.
Skills inventories can be quite simple and manually
kept, or detailed and maintained as part of an
integrated HR information system (HRIS).


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3. Replacement Charts
Replacement charts summarise this information in
visual form for key managers so they can easily
identify both the present incumbents and potential
replacements (or lack of) for given positions.

4. Markov Analysis
This is a mathematical technique used to forecast the
availability of internal job candidates. The
underlying assumption is that the movement of
personnel among various job classifications can be
predicted from past movements.
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5. Succession Planning

Filling of management vacancies. It stresses the
development of high potential employees and takes a
long-term view of the organisations HR needs.
Succession planning should provide the
organisations future managers with the necessary
preparation to successfully fill potential vacancies.
Should have an effective performance appraisal
system, needs-orientated training and development
programs, and a corporate culture which fosters
individual growth and promotion from within.
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External Factors affecting supply of human resources
External labour market
Local regional and international
Demographic Changes
Such as the ageing workforce
Casualisation of the work force
In Australia, 24 per cent of all employees are now casual
workers.
International Employees
Technological advances in communication and increased
labour mobility have facilitated internationalisation of
businesses.
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Outsourcing
By strategically outsourcing and emphasising a
companys core competencies, argue Quinn and
Hilmer, managers can leverage their firms skills and
resources for increased competitiveness.
The reasons for organisations choosing to outsource
include:
increased focus on core business
cost and quality
access to improved technology
elimination of union problems

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Successful HR planning requires:

HR personnel understand the HR planning process
Top management is supportive
the organisation does not start with an overly complex
system
Healthy communications between HR personnel and line
management
the HR plan is integrated with the organisations strategic
business plan
A balance between the quantitative and qualitative
approaches to HR planning