The process of HRP

The process of HRP

The concepts in the process of HRP

Business strategic plans: defining future activity levels and initiatives demanding new skills. Resourcing strategy: planning to achieve competitive advantage by developing intellectual capital employing more capable people than rivals, ensuring that they develop organization specific knowledge and skills, and taking steps to become an employer of choice. Scenario planning: assessing in broad terms where the organization is going in its environment and the implications for human resource requirements. Demand/supply forecasting: estimating the future demand for people (numbers and skills), and assessing the number of people likely to be available from within and outside the organization. Labour turnover analysis: analysing actual labour turnover figures and trends as an input to supply forecasts.

The concepts in the process of HRP

Work environment analysis: analysing the environment in which people work in terms of the scope it provides for them to use and develop their skills and achieve job satisfaction. Operational effectiveness analysis: analysing productivity, the utilization of people and the scope for increasing flexibility to respond to new and changing demands.

The concepts in the process of HRP

Resourcing: Hiring the desired No and competency of employees. Retention: Retaining the hired employees in the organization. Flexibility: Flexibility in the use of human resources to enable the organization to make the best use of people and adapt swiftly to changing circumstances. Productivity: Rate of production per employee Work environment: the environment in which the employee performs the job.

RESOURCING STRATEGY
Resourcing plans: preparing plans for finding people from within the organization and/or for training programmes to help people learn new skills. Or preparing longer term plans for attracting high quality candidates as the employer of choice. Flexibility plans: planning for increased flexibility in the use of human resources to enable the organization to make the best use of people and adapt swiftly to changing circumstances. Retention plans: preparing plans for retaining the people the organization needs. Resourcing strategy: planning to achieve competitive advantage by developing intellectual capital employing more capable people than rivals, ensuring that they develop organization specific knowledge and skills, and taking steps to become an employer of choice.

The Checklist of resource strategy.

In the light of the business plan, how many people are likely to be needed in each of our key operational or functional areas in the short and longer term? What skills are likely to be needed in the future? Will it be possible to meet the needs from our existing resources? If not, where to find the resources? What do to do to develop or extend our skills base? What should we done about identifying people with potential and developing their competency? Do the organization has a problem in attracting or retaining key staff? If so, what needs to be done? Is there scope to make better use of people by increasing employment flexibility? Is there any danger of downsizing? If so, how to manage it?

SCENARIO PLANNING
The Aim: The aim is to obtain a better understanding of the possible situations that may have to be dealt with in the future. Scenario planning: assessing in broad terms where the organization is going in its environment and the implications for human resource requirements.

What to do for this? -Find out possibilities that organizations may have to confront. -Ordered the possibilities to produce a series of internally consistent pictures of alternative futures - Identify issues and examine the possible consequences of events.

An Example: Thomson Press has got a new business in graphic designing which needs the skills sets identical to the skill sets Uptra uses for one of their clients.

FORECASTING
Forecasting involves:
a. forecasting the demand for labor b. forecasting the supply of labor c. balancing supply and demand considerations.

ESTIMATING FUTURE HUMAN RESOURCE REQUIREMENTS ( Demand Supply Forecasting)

Demand Forecasting
Demand Forecasting: Demand forecasting is the process of estimating the future numbers of people required and the likely skills and competences they will need.
The ideal basis of the forecast is an annual budget and longer term business plan, translated into activity levels for each function and department, or decisions on downsizing.

For example setting up a new regional organization, creating a new sales department, carrying out a major project or developing new products or services. So far as possible, plans should also be reviewed that could result in rationalization, and possibly downsizing, as a result of a cost reduction drive, a business process re-engineering exercise, new technology leading to increased productivity, or a merger or acquisition.

Methods of Demand Forecasting

1. Managerial or expert judgments: managers or specialists to sit down, think about future workloads, and decide how many people are needed. This can be no more than guesswork unless there is reliable evidence available of forecast. 2. Ratio trend analysis: This is carried out by studying past ratios between, say, the number of direct (production) workers and indirect (support) workers in a manufacturing plant, and forecasting future ratios, having made some allowance for changes in Organization. There can be other ratios also. 3. Work study techniques : Work study techniques is used when it is possible to apply work measurement to calculate how long an operation takes and the number of people required. Work study techniques for direct workers can be combined with ratio trend analysis to calculate the number of indirect workers needed.

QUANTITIVE FORECASTING TECHNIQUES

A. Analysis of workload factors. Steps for workload analysis: 1. Classification of the work.: Identification of the job or work containt and the time required for such job or work. 2. Forecasting the number of jobs. 3. Converting the projeted job into man-hours. 4. Converting the man-hours into manpower requirement. 5. Converting man-hours into manpower required per day. The analysis of the present and the future workload depends on the possibilities of quantifying the work content.

B. Time series analysis: Analysis of manpower utilization data over a period (time series) Helps in manpower forecasting. The elements of Time Series Analysis: 1. Trend: Fluctuation level of employment over a time. 2. Cyclical effect: the cyclical fluctuations. ( causing out of some particular event.) 3. Seasonal Fluctuations: variations due to seasonal requirements. 4. Step: Sudden changes due to some initiatives. 5. Random fluctuations: Random changes.

QUANTITIVE FORECASTING TECHNIQUES

C. Moving Average Method: An Example

Co xyz, has the following manpower data from the period 2008 to 2011.

Year Manpower No 2006 500 2007 600 2008 800 2009 1000 2010 1100 2011 1300 Average 883
Average for the 6 yrs is 833, average for the last 4 yrs is 1050.

So, lesser the tome period for consideration the results are close to accurate.

QUANTITIVE FORECASTING TECHNIQUES

D. Weighted Moving Average Method: An Example

Assigning weights to more important aspects.

Manpower Forecasting: 1(500)+1(600)+1(800)+2(1000)+3(1100)+4(1300) = 1033 12

D. Exponential Smoothing: The carry forward of a large volume of historical data is unscientific in the changing industrial scenario.

An assumed smoothing constant is used to draw a realistic projected manpower requirement. Assuming: a. assumed manpower requirement is 500, b. actual utilization during a period is 480, Smoothening constant is considered to be .4.
The optimum requirement is : 500 + .4(480-500) =492

QUANTITIVE FORECASTING TECHNIQUES

Delphi Technique: The method calls for selection of a panel of experts from within and outside. A coordinator coordinates for initiating and drawing conclusion of the process. Steps: 1. Selection of coordinator and panel of experts ( out side & in-side) 2. Coordinator circulates written questioner. 3. Experts gives their feed-back 4. Which is tabulated conclusions drawn. 5. Further questioner is prepared by the coordinator, from the tabulated data and circulated to experts. 6. Feed-backs are re-tabulated for conclusions. 7. The process continues till the final synthesis is made out of the feed-backs.

Supply forecasting
Supply forecasting measures the number of people likely to be
available from within and outside the organization, having allowed for attrition (labour wastage and retirements), absenteeism, internal movements and promotions, and changes in hours and other conditions of work.

The forecast will be based on:

an analysis of existing human resources in terms of numbers in each occupation, skills and potential; forecast losses to existing resources through attrition (the analysis of labour wastage as described in the next main section of this chapter is an important aspect of human resource planning because it provides the basis for plans to improve retention rates); forecast changes to existing resources through internal promotions; effect of changing conditions of work and absenteeism; sources of supply from within the organization; sources of supply from outside the organization in the national and local labour Markets.

Analyzing demand and supply forecasts

Deptt-1 SL NO Details of demand & Supply 1 Number currently employed Annual wastage rate based on past 2 records 3 Expected losses during the year 4 Balance at end year 5 Number required at end year Number to be obtained during year (5 6 4) 70 10 per cent 7 63 75 12

Deptt-2

Deptt-3

S-1 S-2 S-3 S-1 S-2 S-3 S-1 S-2 S-3

S-2, S-2, S-3 represents the skill levels

LABOUR TURNOVER
Labour Turnover: Analysis of the numbers of people leaving the organization.

Methods of measurement of labour turnover.

1. The labour turnover index: Number of leavers in a specified period (usually 1 year) 100 Average number of employees during the same period

2. Survival rate index: % of employees available after the end of a particular span. An Example
Orig Levels Strength Yr-1 Yr-2 Yr-3 Yr-4 Yr-5 A 30 25 24 20 20 18 B 35 35 32 30 27 25 C 15 15 15 12 10 10 D 20 20 20 18 15 14 E 50 46 40 39 36 34 Total 150 141 131 119 108 101 % 100 94.00 87.33 79.33 72.00 67.33

LABOUR TURNOVER

3. Half-life index: the time taken for a group to reduce to half its original size through wastage. 4. Stability index: Number with 1 years service or more 100 Number employed 1 year ago 5. Length of service analysis: average length of service of people who leave.
An Example:
Levels A B C Total

Total Avg No Index of 0-3 3-6 6-1 1yr-2 2yrs - 3yrs- no employ labour months months yr yrs 3yrs 5yr leaving ed turnover 5 4 3 3 2 3 20 220 9 15 12 10 6 3 4 50 250 20 8 6 5 4 3 4 30 100 30 28 22 18 13 8 11 100 570 18

LABOUR TURNOVER
Reasons for turnover:

An analysis of the reasons for leaving derived from exit interviews will provide useful information on which to base retention plans.

more pay; better prospects (career move); more security; more opportunity to develop skills; better working conditions; poor relationships with manager/team leader; poor relationship with colleagues; bullying or harassment; personal pregnancy, illness, moving away from area etc.

LABOUR TURNOVER
The cost of labour turnover
The following factors should be considered: leaving costs payroll costs and personnel administration of leaver; direct cost of recruiting replacements (advertising, interviewing, testing etc); opportunity cost of time spent by HR and line managers in recruitment; direct cost of introducing replacements (induction course, cost of induction manuals etc); opportunity cost of time spent by HR and managers in introducing new starters; direct cost of training replacements in the necessary skills; opportunity cost of time spent by line managers and other staff in providing training; loss of the input from those leaving before they are replaced in terms of contribution, output, sales, customer satisfaction and support etc; loss arising from reduced input from new starters until they are fully trained.