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HUMAN RESOURCE PLANNING

BBAP 322 LECTURER NAT FIIFI AMISSAH-AIDOO 020-812-5727 natfisa@live.com

Objectives:
At the end of this session students are expected to to be able to:

define Human Resource Planning from different dimensions


Explain the what goes in into the HR planning process

HUMAN RESOURCE PLANNING - Introduction


HR Planning is like any other form of planning It is a means to an end. The END In this case is to secure the Human Resource of the organisation in order to achieve its corporate objectives. It encompasses the HR activities to secure the Right Employees at the Right Place at the Right Time. It is the first step in the recruiting and selection process ..

DEFNITIONS

A rational approach to the effective, recruitment, retention and development of people within an organisation, including, when necessary, arrangements for dismissing staff (Management Theory and Practice Gerald A Cole 6th Ed pg 169) HR Planning is concerned with the flow of people through and sometimes out of the Organisation Effective HR Planning is not just the right number of people but concerned with the optimum deployment of peoples knowledge and skills. I.e Quality is even more than the quantity.

DEFNITIONS

The systematic and continuing process of analysing an organisations human resource needs under changing conditions to ensure that the right number of people and the right types (skills, knowledge and behaviours) of people are available at the right time for the organisation. (Human Resource Management Dessler et al 1999 pg41) To be worthwhile, HR planning has to be integrated both into the organisations internal process and externally, into markets of the wider environment. Human resource plans (Like any good plans) are built on premises- basic assumptions abut the future.

DEFNITIONS

Human Resource Planning is the Process an organisation uses to ensure that it has the right amount and the right kind of people to deliver a particular level of output or services in the future. (Managing Human Resource 5th Ed.- Gomez-Mejia et al: (2007)pg. 147) Firms that do not conduct HRP may not be able to meet their future labour needs (a labour shortage) or may have to resort to layoffs (in case of labour surplus)

Failure to plan could lead to significant financial cost.


Elsewhere Lay offs high taxes Overtime Premium wage Legal requirement

Key Questions to answer in HR planning

What kind of people does the organisation require and in what numbers? Over what time-span are these people needed? How many of them are currently employed by the organisation? What is the age profile, by department of the existing employees? How many employees, on the average leave the organisation every year?

Key Questions to answer in HR planning

Which department of the organisation do we tend to lose more employees? How can the organisation meet the shortfall in requirement from internal sources? How can the organisation meet the shortfall from external sources? What changes are taking place in the external labour market which might affect the supply of human resources?

Aims & Importance of HR Planning

HRP aims to ensure that the organisation has the number of right people, the right skills needed to meet forecast requirements. (Armstrong 2009 p487) Research conducted by the Institute for employment studies (Reilly, 1999) established that there are a number of reasons why organizations choose to engage in some form of HRP.

1. Optimizing the use of resources


2. Process benefits (understanding the present in order to confront the future.)

3. Linking HR plans to Business Plans.

Aims & Importance of HR Planning

A key goal of HRP is to get the right number of people with the right skills, experience, and competencies in the right jobs at the right time and at the right cost. This ensures that the business production requirements are met in an efficient and effective manner. Having too many employees is problematic due to the risk of high labour expenses,

downsizing, or layoffs. Having too few employees is also problematic due to high overtime costs,
Reduces the risk of unmet production requirements, and the challenge of finding the instant human resources needed to get the job done. (Bulmash et al, 2010)

Aims & Importance of HR Planning

It evolved when big companies which employed many workers began to go through shocks and disturbances in crucial times in relation to man power, creating instability and in the long run financial lost. To maintain numerically stable employment over time, management requires data on when, where and how employees need to be recruited. HR planning is a crucial managerial function that provides management with information on resource flows which is used to calculate amongst other things, recruitment needs and succession and development plans. (Beardwell, 1995)

Aims & Importance of HR Planning- Summary


1. Current and Future Manpower Needs

2. Coping With technological, political, socio-cultural, and economic Change maintain numerically stability 3. Recruitment Of Talented Personnel 4.Development Of Human Resources 5. Proper Utilization Of Human Resources 6. Uncertainty Reduction 7. many others: find out

HR forecasting
human resource planning links people management to the organizations mission, vision, goals and objectives, as well as its strategic plan and budgetary resources. A critical component of an effective HR plan is the method of forecasting. 1. FORECATING is the process of formulating plans to fill future openings based on the analysis of the positions that are expected to be open and whether these will be filled by inside or outside candidates. Dessler & Lloyds-Walker (1999) 2. Human resource forecasting is a process that helps an organization determine how many employees it will need in the future to meet its strategic goals.

HR forecasting
HR forecasting involves establishing: A. what jobs the company will need to fill, B. what types of skills employees must have to do those jobs and C. what challenges the company will face as it works to meet its staffing needs.

HR Supply and Demand


Labour Supply : is the availability of workers who possess the required skills that an employer might need. Labour Demand: is the number of skilled workers an organisation needs to execute its business objectives. Estimating future supply and demand and taking steps to balance the two require PLANNING

Objectives of this Lecture


Define HR forecasting Explain Forecasting Demand and supply Appreciate the process of forecasting Explain generally the HR Planning process

Demand Forecasting Ratnam & Srivastava (1991)


Demand forecasting refers to the process estimating the future need of manpower(Human resource) in the context of corporate and functional plans and forecasts of future activity levels of the organisation.

Demand for human resource should be based on corporate plans and annual budget translated into activity levels for each function and department.

Forecasting HR needs Demand Aspect


Managers should consider several factors when forecasting HR needs. In reality, demand for product and services is paramount In a manufacturing firm sales are projected first Then the volume production required to meet these sales requirements is determined Finally the needed to to maintain this volume of output is estimated

Forecasting HR needs Demand Aspect


In addition to production and sales demand planners will also have to consider several factors: Projected turnover of employees (as a result of resignations and terminations)

Quality and nature of employees ( in the light of changing needs of the organisation)
Decisions to upgrade the quality of products or services or to enter into new markets. Technological and administrative changes resulting in increased productivity. The financial resources available to HR dept.

Forecasting HR needs Supply Aspect


The HR Demand forecast answers the question: how many employees will we need? Next, Supply must be forecast.

Before determining how many OUTSIDE candidates to hire, The planner must forecast how many candidates for the projected opening will come from within the organisations existing ranks.
A qualification inventory can facilitate forecasting the supply of inside candidates. What is qualification inventory? It contains summary of data such as each employees
Performance record Educational background and promotability Compiled either manually or computerized.

THE FORECASTING PROCESS


EXAMINE THE CURRENT JOB MARKET One of the primary steps in forecasting workforce availability is to seriously consider the economic and population issues that affect employment. Manpower forecasting can be more difficult when there is uncertainty in the labor market. Human resource professionals must consider issues such as the current demographics and unemployment rate of the local job market. E.g. Substantial number of young graduates entering the workforce at the same time increases the possibility of filling some job vacancies at a cheaper salary or wage rate. Age, training and level of education are other factors that affect the talent available in the job market.

THE FORECASTING PROCESS


EVALUATE ORGANIZATIONAL NEEDS HR planners must consider the type and size of their organizations and examine their own human resource needs.
Data collection from all departments. Assessment of the existing job positions within the organization.

HR managers should consider the kinds of jobs and number of workforce performing in each department. Forecast should help to determine if employees have the qualifications and expertise to satisfy the companys future needs.

THE FORECASTING PROCESS


ANTICIPATE EMPLOYEE TURNOVER HR must not be unaware of their staff replacement rate i.e. the numbers and the rate at which employees leave and get replaced in the organisation. HR must appreciate the organizations existing and future objectives in order to efficiently forecast workforce demand that will support organizational strategies. In addition, human resources must anticipate the need for creating new positions and modifying current positions. Employee turnover rates place demands on organizations to improve employee retention and recruitment strategies.

Knowing available labour force in the job market is vital when it comes to filling available positions when workers retire; some are promoted to higher positions; and others poached to go elsewhere.

THE FORECASTING PROCESS


ESTIMATE FUTURE HR NEEDS Once organizational needs has been defined and available resources in the workforce identified, it can plan for future labor needs. Factors to consider include evaluating
current employee potential, determining training needs and putting succession plans in place.

Matching the right number of employees skills to an organizations goals at the relevant time helps a company to achieve its strategic objectives and improves employee job satisfaction as well

The HR Planning Process

The HR Planning Process


The diagram above looks at the human resources planning process. The firm must deal with demand side issues of labour and the expected demand for labour from the firm. They must also deal with supply side issues. In other words are there enough staff, internally or externally to meet the expected demand of staff from the company? Lets quickly look at supply side issues.

The HR Planning Process


Internal Supply of Labour The organisation needs to examine if they have enough staff to meet the demand of labour. Is training available within the firm to meet future labour needs? What percentage of workers are about to retire and are they going to be replaced? Do terms and conditions of services currently keep staff motivated?

When examining internal labour needs, these issues need to be taken into account.
External Supply of Labour If the supply of labour is not available internally, then the firm may need to recruit new staff. Are the staff then available within the local market? Do they have the required skill? If they are not available within the local market, how do we find them? Advertise in the next town? Or even overseas? Human resources planning is an important part of running a business. If a business wishes to expand and do well, it must take into account current and future needs of its labour workforce.

HRP- steps in recruitment & Selection process


Employment planning & forecasting Recruiting: Build a pool of candidates

Candidate becomes employee

Applicants Complete Application forms

Use selection tools like Tests to screen out Most applicants

Managers & Supvrs interview final Candidates to make Final choice

The Recruitment and selection process is a series of hurdles aimed at selecting the best candidate for the job. Human Resource Mgt. Gary Dessler 2005 pg152