Human Resources Management
HUMAN RESOURCE
PLANNING
Chapter 2
By Dr. S.Chan
BA Department
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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.
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Human Resources Management
Organisation strategy and human resource planning
Organisation strategy
Retrenchment strategy Stability Strategy
•Maintain status quo
•Downsizing
•Business sale
•Shut down
FEEDBACK
(-)
Growth strategy
•Internally generated
growth
•Acquisitions, mergers
or joint ventures
(0)
(+)
HR planning
•Determine number and types of jobs to be filled.
•Match human resource availability with job openings.
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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
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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.
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Human Resources Management
HR planning
 Determine number and type of jobs to be
filled.
 Match human resource availability with job
openings.
Human resource
demand
Human resource
requirements:
 numbers
 skills
 qualifications
 occupation
 performance
 experience
 career goals
Variances
Human resource
supply
Human resource
inventory:
 numbers
 skills
 qualifications
 occupation
 performance
 experience
 career goals
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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Human Resources Management
HR Planning Failure and Labour Imbalances
.
Labour Shortage
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Labour Surplus
Employee
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Burnout
Long hours
Increased pressure
Reduced job performance
Decreased morale
Role overload
Increased labour turnover
Organization
Inadequate supply of talent
Increased overtime costs
Production delays
Reduced productivity
Lost business opportunities
Employee relations problems
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Employee:
Rust-out
Job insecurity
Decreased morale
Reduced job performance
Talents not fully utilized
Loss of motivation
Restricted career opportunities
Organization
Excessive payroll costs
Employees underutilised
Low productivity
Loss of competitiveness
Retrenchment and downsizing costs
Employee relations problems
Danger of losing top talent
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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
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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).
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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.
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Human Resources Management
2. Skills Inventory
•
•
•
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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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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.
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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.
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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
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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
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