Planning for Human

Resources
 HR Planning
 HR planning
 Defined as the “process of identifying and
responding to organizational needs . . . and
charting new policies, systems, and programs that
will assure effective human resource
management under changing conditions.”

 Objectives of HR planning
 Enable organizations to anticipate their future HRM
needs
 Identify practices that will help them meet those needs
 HR Planning - Benefits
 Benefits of human resource planning

 Aids in the planning of job assignments

 Helps cope with fluctuations in staffing requirements
 Identifies recruiting needs
 Provides other useful information regarding human
resource needs
Consequences of failure to
plan
 Employers are forced to respond to events after
they occur, rather than before; that is, they
become reactive, rather than proactive.

 An organization may be unable to correctly

anticipate an increase in its future demand for
employees.
 At best, such a company would be forced to recruit
employees at the last minute and may thus fail to find
the best candidate.
 At worst, the company may become seriously
understaffed.
Strategic Planning

 Through the strategic planning process,

organizations determine where they are
going.
 The process typically consists of the following
activities:
1. Determine the organizational mission.
2. Scan the organizational environment.
3. Set strategic goals.
4. Formulate a strategic plan, part of which addresses
human resource needs.
Strategic Planning (cont.)

 Step 1: Determine the organizational mission

 Mission statement
 A declaration of the organization’s overall purpose
 Defines the basic business scope and operations that
distinguish the organization from others of a similar
nature
 Answers the questions:
 “Why does our organization exist?”
 “What unique contributions can it make?
Strategic Planning (cont.)
 Step 2: Scan the organizational environment
 The firm’s external and internal environments
must be scanned to identify threats and
opportunities.
 External environment
 Challenges posed by political, legal, economic, social,
and technological issues
 Planners must also scan their industry environment.
 Internal environment
 Assess the firm’s strengths and weaknesses in order to
form strategic goals that take advantage of strengths
Strategic Planning (cont.)

 Step 3: Set strategic goals

 Specify the desired outcomes that must be
reached if the firm is to accomplish its mission
 Strategic goals should be:
 Specific
 Challenging
 Measurable
Strategic Planning (cont.)

 Step 4: Formulate a strategic plan

 Specifies the courses of action a firm must take in
order to meet its strategic goals

 Formulated by:
1. Translating organizational goals into more narrow
functional or departmental goals
2. Devising strategies for meeting these goals
Human Resource Planning
 Demand forecasting
 Involves predicting the number and types of
people the organization will need at some future
point in time

 Two general approaches are:

 Statistical
 Judgmental
Statistical Approaches
 Trend analysis
 The future demand for human resources is projected on
the basis of past business trends regarding a business
factor.
 Ratio analysis
 The process of determining future HR demand by
computing an exact ratio between the specific business
factor and the number of employees needed.
 Regression analysis
 Is similar to both trend and ratio analyses
 Forecasts are based on the relationship between a
business factor and workforce size.
 This method is more statistically sophisticated.
Precaution regarding the use
of statistical methods
 Statistical methods of demand forecasting
assume that the relationship between workforce
size and the business factor remains constant
over time.

 If this relationship were to change unexpectedly,

the forecast would become inaccurate.
Judgmental Approaches

 Involves the use of human judgment, rather

than a manipulation of numbers

 Two most common techniques:

 Group brainstorming
 Sales force estimates
Supply Forecasting
 The process used to estimate which positions
will be filled at a particular point in time
 Steps to supply forecasting
 Step 1: Organization groups its positions by title,
function, and level of responsibility.
 Step 2: Estimate within each job group, how many
of its current employees will:
 Remain in their positions during the planning period
 How many will move to another position
 How many will leave the organization
Oversupply of Employees

 The current trend toward organizational

restructuring usually results in a smaller
workforce.

 Downsizing
 Because of the negative outcomes that are often
associated with layoffs, employers are encouraged to
seek alternatives.
 Undersupply of Employees
 Hiring additional workers

 Alternatives to additional hiring

 Improve productivity of existing workforce through
additional training
 Overtime
 Additional shifts
 Job reassignments
 Temporary workers
 Improve retention rates