HUMAN RESOURCE PLANNING

MBA I YR

HR Planning

What is HR Planning?

Why is it done?

What is the connection between a firms strategic orientation and HR planning? Impact ?

Organizational Life-Cycle Stages and HR Activities

LIFE-CYCLE STAGE STAFFING COMPENSATION TRAINING AND DEVELOPMENT LABOR / EMPLOYEE RELATIONS Set basic employeerelations philosophy of organization.

Introduction

Attract best technical and professional talent.

Meet or exceed labor market rates to attract needed talent.

Define future skill requirements and begin establishing career ladders.

Growth

Recruit adequate numbers and mix of qualifies workers. Plan management succession. Manage rapid internal labor market movements

Meet external market but consider internal equity effects. Establish formal compensation structures.

Mold effective management team through management development and organizational development.

Maintain labor peace, employee motivation, and morale.

Organizational Life-Cycle Stages and HR Activities (contd)

LIFE-CYCLE STAGE STAFFING COMPENSATION TRAINING AND DEVELOPMENT LABOR / EMPLOYEE RELATIONS Control labor costs and maintain labor peace. Improve productivity.

Maturity

Encourage sufficient turnover to minimize layoffs and provide new openings. Encourage mobility as reorganizations shift jobs around. Plan and implement workforce reductions and reallocations, downsizing and outplacement may occur during this stage.

Control compensation costs.

Maintain flexibility and skills of an aging workforce.

Decline

Implement tighter cost control.

Implement retraining and career consulting services.

Improve productivity and achieve flexibility in work rules. Negotiate job security and employmentadjustment policies

Human Resource Planning Model

FORECASTING DEMAND

Considerations
Product/service demand Technology Financial resources Absenteeism/turnover Organizational growth Management philosophy

Techniques
Trend analysis Managerial estimates Delphi technique

BALANCING SUPPLY AND DEMAND

(Shortage) Recruitment
Full-time Part-time Recalls

Techniques
Staffing tables Markov analysis Skills inventories Management inventories Replacement charts Succession Planning

External Considerations
Demographic changes Education of the workforce Labor Mobility Government policies Unemployment rate

(Surplus) Reductions
Layoffs Terminations Demotions Retirements

FORECASTING SUPPLY

Forecasting Demand for Employees

Quantitative Methods

Forecasting Demand
Qualitative Methods

How does HR Planning occur?

1. What does the environment look like?
2. What are our future personnel needs? (forecast demand)
a. Judgmental/Qualitative Estimates

Rule of Thumb Delphi Technique NGT Brainstorming

Qualitative Approaches to Demand Forecasting

Management Forecasts
The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organizations future employment needs.

Delphi Technique
An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals. The final forecast represents a composite group judgment.

Forecasting Demand for Employees

Quantitative Methods

Forecasting Demand
Qualitative Methods

Quantitative Approach: Trend Analysis

Forecasting labor demand based on an organizational index such as sales:
Select a business factor that best predicts human resources needs. Plot the business factor in relation to the number of employees to determine the labor productivity ratio. Compute the productivity ratio for the past five years. Calculate human resources demand by multiplying the business factor by the productivity ratio. Project human resources demand out to the target year(s).

 Quantitative Methods Ratio Analysis Trend Analysis

Example of Trend Analysis of HR Demand

BUSINESS FACTOR
YEAR

LABOR PRODUCTIVITY
(SALES/EMPLOYEE)

HUMAN RESOURCES DEMAND

(NUMBER OF EMPLOYEES)

(SALES IN THOUSANDS)

2005 2006 2007

2,351 2,613 2,935

14.33 11.12 8.34

164 235 352

2008
2009 2010 2011

3,306
3,613 3,748 3,880

10.02
11.12 11.12 12.52

330
325 337 310

2012*
2013* 2014*

4,095
4,283 4,446

12.52
12.52 12.52

327
342 355

*Projected figures

Forecasting Supply of Employees: Internal Labor Supply

Staffing Tables Markov Analysis Skill Inventories Replacement Charts Succession Planning

Are resources available internally or externally to fill those needs?

Employee Replacement Chart for Succession Planning

How does HR Planning occur?

3. Are resources available internally or externally to fill those needs?

a. Internal

Replacement charts
Promotability

How does HR Planning occur?

3. Are resources available internally or externally to fill those needs?

a. Internal

Replacement charts
Promotability Succession planning Skills inventory Transition (Markov) matrix

Forecasting Internal Labor Supply

Staffing Tables
Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.

Markov Analysis
A method for tracking the pattern of employee movements through various jobs.

Hypothetical Markov Analysis for a Retail Company

Internal Demand Forecasting Tools

Skill Inventories
Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.

Replacement Charts
Listings of current jobholders and persons who are potential replacements if an opening occurs.

Succession Planning
The process of identifying, developing, and tracking key individuals for executive positions.

An Executive Replacement Chart

How does HR Planning occur?

3. Are resources available internally or externally to fill those needs?

b. External what do you look at? - try to determine availability of qualified labor; Surplus? Shortage?

How does HR Planning occur?

4. What should we do? - create plan of action to reconcile supply and demand

a. Set objectives
b. Generate alternatives

Staffing Alternatives to Deal with Employee Surpluses

Source: Compliments of Dan Ward, GTE Corporation

Staffing Alternatives to Deal with Employee Shortages

Source: Compliments of Dan Ward, GTE Corporation

Alternative Scheduling Options

Percent Using (N = 427 companies)

Alternative

The following definitions were used in this survey for alternative scheduling strategies:
Part-time: A regular employee who works fewer than 35 hours per week. Flextime: A system than enables employees to vary their schedules: Usually, the flexibility applies to starting and finishing times. Compressed workweek: A full-week schedule (usually 40 hours) than occurs in fewer than five days, such as four 10-hour days. 84%

40% 23% 18%

Job sharing: Two or more employees split a full-time position, diving the responsibilities, and, to some degree, the compensation.

Work-at-home: A program that enables employees to complete work at home (or at a remote office closer to home) on a regular basis. It is often 13% referred to as flexplace or telecommuting.

How does HR Planning occur?

5. How did we do?

a. Did company avoid surplus/shortage? b. Evaluate usefulness of methods used c. Goals v. Production Levels, etc.