2.
1 Human resource planning
Human resource planning
By the end of this chapter, you should be able to:
 identify the constraints and opportunities provided by
technological and demographic change
 compare present human resources with future requirements and
evaluate strategies for developing future human resources
 describe methods of recruitment, appraisal, training and dismissal
and discuss the advantages and disadvantages of each method
 examine how recruitment, appraisal, training and dismissal
enable firms to achieve workforce planning targets.
 describe reasons for changing work patterns and practices and
analyse reasons for these changes and their likely consequences
 apply Handy's shamrock organization
The supply of labour
The supply of labour is the total number of people who are willing
and able to work. Economists view the supply of labour as a fixed
stock which grows, for example when there is an increase in
immigration, and shrinks, for example when more people retire
than take up work. The stock of labour becomes increasingly difficult
to measure because of changes in technology, work practices, and
the economic and political environment. In some industries the
supply of labour includes labour beyond domestic boundaries
because it's possible to complete work using information technology
(IT). Here are some examples.
 Some US hospitals are sending X-rays and blood tests overseas for
doctors to interpret the results. There are considerable cost
savings in doing this and results are often interpreted more
quickly as the hospital is able to consult a Iarge pool of doctors.
 Many small US businesses employ an offshore online service
provider to complete their tax returns at a much lower cost than
would be the case if a fellow citizen were employed.
 Students canfind an online tutor, often on the other side of the
world, to help them with whole subjects, such as mathematics, or
with a difficult essay assignment.
 Music can be compiled and recorded online with artists from
different parts of the world without the musicians ever meeting.
The supply of labour can therefore be described as increasingly
global, informal, and impersonal.
While technological change can increase the reach and availability
of labour, demographic change can provide constraints and
opportunities for organizations. In many economically developed
economies, organizations are faced with an ageing population
because fertility rates are falling, life expectancy is rising, and the
post-war baby boomers are getting older.
Older staff offer an organization rich life experience, well-honed
skills, knowledge, and wisdom. Rising life expectancy and a growing
dependency ratio may mean that the retirement age will need to be
raised in some countries, so many organizations may need to reassess
their attitudes and recruitment procedures.
1 4 ,0 1 9 a e l l i < I f i l ) 9 4 1 migration has provided opportunities and threats for businesses. At
"1 don't want to achieve the same time as providing an economics bonus to countries
immortality through my experiencing labour shortages, migration can lead to a "brain drain"
work... 1 want to achieve it from countries with net emigration as skilled workers are the ones
through not dying." with greatest mobility. As these skilled workers return to their passport
Woody Allen (1935— ), actor and country they may also pose a greater threat in terms of competition
director since they are now equipped with the knowledge to take on their
farmer employer—often at lower cost.
Data response exercise
Read the text below and answer the questions that follow.
Nordic countries experience labour
shortages
In early 2008 Finland, Sweden, Norway, and Denmark
introduced a number of measures to attract skilled foreign
workers. Unemployment in these countries was lower than the European
average and employers were complaining of labour shortages and rising wage
costs that undermined expon competitiveness.
The Nordic countries have responded lo this by introducing a number of
measures including promotional videos, and simplified and relaxed
immigration mies and procedures. This made it easier and faster for
prospective employees to work in those countries.
However, these changes have been largely unsuccessful, with most
immigrants leaving within a year or so.
Examination questions
Workforce planning
[8 marks]
Identity four factors that could have contributed to skilled labour shortages in these countries.
Discuss additional measures that these governments could take to reduce labour shortages. [10 morksj
______________________________ ..d
Changes in the external environment mean that
organizations have to anticipate and manage changes in
their workforce. For workforce planning, an organization will:
. forecast the human resources it needs to achieve its objectives
 identify, develop, and maintain the skills its workforce needs
 need to bear in mind the work–life balance employees are
looking for.
Workforce planning is likely to include assessing the current
situation, then looking ahead to future workforce needs and
addressing any shortfall or surplus.