Human Resources Management HUMAN RESOURCE PLANNING Chapter 2

Human Resources Management HUMAN RESOURCE PLANNING Chapter 2 By Dr. S. Chan BA Department 1

Human Resources Management 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 organisation’s overall business strategy. 2

Human Resources Management 3 Source: Asia Pacific Management Co. Ltd. 2001

Human Resources Management 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 organisation’s 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 4

Human Resources Management 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 organisation’s objectives. 5

Human Resources Management 6

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Human Resources Management 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 8

Human Resources Management 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). 9

Human Resources Management 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. 10

Human Resources Management 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). 11

Human Resources Management 3. Succession Planning • Filling of management vacancies. It stresses the development of high potential employees and takes a long-term view of the organisation’s HR needs. • Succession planning should provide the organisation’s 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. 12

Human Resources Management External Factors affecting supply of human resources External labour market • Local regional and international Demographic Changes • Such as the ageing workforce, gender distribution in different position/industry Casualisation of the work force • Number of casual/part time workforce International Employees • Technological advances in communication and increased labour mobility have facilitated internationalisation of businesses. 13

Human Resources Management Outsourcing • • ‘By strategically outsourcing and emphasising a company’s core competencies, ’ argue Quinn and Hilmer, ‘managers can leverage their firm’s skills and resources for increased competitiveness. ’ The reasons for organisations choosing to outsource include: increased focus on core business Reduced cost and enhanced quality access to improved technology elimination of union problems 14

Human Resources Management 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 organisation’s strategic business plan • A balance between the quantitative and qualitative approaches to HR planning 15