Planning for Human Resources

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Planning for Human Resources
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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

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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

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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.

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Strategic Planning

• Through the strategic planning process,
  organizations determine where they are going.
• The process typically consists of the following
  activities
• Determine the organizational mission.
• Scan the organizational environment.
• Set strategic goals.
• Formulate a strategic plan, part of which
  addresses human resource needs.

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Strategic Planning (cont.)

• Step 1 Determine the organizational mission
• Mission statement
• A declaration of the organizations 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?

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Strategic Planning (cont.)

• Step 2 Scan the organizational environment
• The firms 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 firms strengths and weaknesses in
  order to form strategic goals that take advantage
  of strengths

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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

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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
• Translating organizational goals into more narrow
  functional or departmental goals
• Devising strategies for meeting these goals

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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

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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.

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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.

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Judgmental Approaches

• Involves the use of human judgment, rather than a
  manipulation of numbers
• Two most common techniques
• Group brainstorming
• Sales force estimates

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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

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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.

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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