Human Resource Planning Process Ned Ludd ‘Luddites’ Fibre optic cables New age Luddites Technology and Social changes can impact competitiveness

HRM Corporate Level Strategy Business Level Strategy Function Level Strategy HR Strategy Training & Devpmnt HR Planning, Rectt., Selection Job Analysis Performance Management Compensation Management Employee Engagement

Linking Strategic Planning and Human Resources Linking Strategic Planning and Human Resources

Competitive Advantage through People  Core Competencies  Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers.  Sustained competitive advantage through people is achieved if these human resources:  Are valuable.  Are rare and unavailable to competitors.  Are difficult to imitate.  Are organized for synergy.

Composition: The Human Capital Architecture  Core knowledge workers  Employees who have firm-specific skills that are directly linked to the company’s strategy.  Example: Senior software programmer  Traditional job-based employees  Employees with skills to perform a predefined job that are quite valuable to a company, but not unique.  Example: Security guard

Composition: The Human Capital Architecture (cont’d)   Contract labor   Employees whose skills are of less strategic value and generally available to all firms.   Example: General electrician   Alliance/partners   Individuals and groups with unique skills, but those skills are not directly related to a company’s core strategy.   Example: Independent product label designer

Mapping Human Capital

Forecasting: A Critical Element of Planning   Forecasting involves:   forecasting the demand for labor   forecasting the supply of labor   balancing supply and demand considerations.

Model of HR Forecasting FORECASTING DEMAND Considerations Product/service demand Product/service demand Technology Technology Financial resources Financial resources Absenteeism/turnover Absenteeism/turnover Organizational growth Organizational growth Management philosophy Management philosophyConsiderations Product/service demand Product/service demand Technology Technology Financial resources Financial resources Absenteeism/turnover Absenteeism/turnover Organizational growth Organizational growth Management philosophy Management philosophyTechniques Trend analysis Trend analysis Managerial estimates Managerial estimates Delphi technique Delphi techniqueTechniques Trend analysis Trend analysis Managerial estimates Managerial estimates Delphi technique Delphi technique Techniques Staffing tables Staffing tables Markov analysis Markov analysis Skills inventories Skills inventories Management inventories Management inventories Replacement charts Replacement charts Succession planning Succession planningTechniques Staffing tables Staffing tables Markov analysis Markov analysis Skills inventories Skills inventories Management inventories Management inventories Replacement charts Replacement charts Succession planning Succession planning External Considerations Demographic changes Demographic changes Education of the workforce Education of the workforce Labor mobility Labor mobility Government policies Government policies Unemployment rate Unemployment rate External Considerations Demographic changes Demographic changes Education of the workforce Education of the workforce Labor mobility Labor mobility Government policies Government policies Unemployment rate Unemployment rate FORECASTING SUPPLY BALANCING SUPPLY AND DEMAND (Shortage) Recruitment Full-time Full-time Part-time Part-time Recalls Recalls (Shortage) Recruitment Full-time Full-time Part-time Part-time Recalls Recalls (Surplus) Reductions Layoffs Layoffs Terminations Terminations Demotions Demotions Retirements Retirements (Surplus) Reductions Layoffs Layoffs Terminations Terminations Demotions Demotions Retirements Retirements

Manpower Flows (Workforce Analysis) Transfers In Recruits In Promotions In Current Staffing Level Transfers Out Retirement VRS Discharge or Dismissal Terminations Resignations Promotions Out Current Staffing Level Projected Outflows this year Projected Inflows this year Firm’s internal supply this time next year

Manpower Gap (Budget Preparation) 1Number Required at the beginning of the year 2Changes to requirements forecast last year 3Total Requirements at the end of the year (1+2)Demand 4Number available at the beginning of the year 5Additions (Transfers, Promotions) 6Separations (retirements, wastages, promotions out etc) 7Total available at the end of the year (4+5-6)Supply 8Deficit or Surplus (3-7) 9Losses of those recruited during the year 10Additional Numbers needed during the year

Forecasting Demand for Employees Quantitative Methods Qualitative Methods Forecasting Demand

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).

Example of Trend Analysis of HR Demand Example of Trend Analysis of HR Demand 20102, , , , , , , *4, *4, *4, BUSINESS  LABOR = HUMAN RESOURCES FACTORPRODUCTIVITYDEMAND YEAR (SALES IN THOUSANDS INR)(SALES/EMPLOYEE)(NUMBER OF EMPLOYEES) *Projected figures

Determining the Relationship Between Hospital Size and Number of Nurses Note: After fitting the line, you can project how many employees you’ll need, given your projected volume. Size of Hospital (Number of Beds) Number of Registered Nurses Multiple Regression can also be used

Qualitative Approaches   Management Forecasts   The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organization’s 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 the Supply of Employees: Internal Labor Supply   Staffing Tables   Markov Analysis   Skill Inventories   Replacement Charts   Succession Planning

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.

Transitional Matrix (1)(2)(3)(4)(5)(6)(7)(8) (1) Sales Manager (2) Sales Representative (3) Sales Apprentice (4) Assistant Plant Manager (5) Production Manager (6) Production Assembler (7) Clerical (8) Not in Organization Row: Where did people in this category in go by Column: Where did these people in come from (where were they in ?)

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.

Management Replacement Chart Showing Development Needs of Potential Future Divisional Vice Presidents

Sophisticated Computer Programmes   Computerized Forecasts   Software that estimates future staffing needs by:   Projecting sales, volume of production, and personnel required to maintain different volumes of output.   Forecasting staffing levels for direct labor, indirect staff.   Creating metrics for direct labor hours and three sales projection scenarios—minimum, maximum, and probable.

Drawbacks to Traditional Forecasting Techniques   They focus on projections and historical relationships.   They do not consider the impact of strategic initiatives on future staffing levels.   They support compensation plans that reward managers for managing ever-larger staffs.   They make us believe the idea that staff increases are inevitable.   They validate and institutionalize present planning processes and the usual ways of doing things.

Steps in Recruitment and Selection Process The recruitment and selection process is a series of hurdles aimed at selecting the best candidate for the job.

Effective Recruiting Recruiting: Finding/attracting candidates for open positionsRecruiting: Finding/attracting candidates for open positions Create choice, qualified, hirable pool Educated and employable Many new sectors opening up Recruitment, a challenge……ask any of the new economy organizationg

The Recruitment Function Recruiting: Finding/attracting candidates for open positionsRecruiting: Finding/attracting candidates for open positions Centralized vs decentralized Independent Recruitment Function Line & Staff cooperation

Advantages of Centralizing Recruitment   Strengthens employment brand   Facilitates applying strategic priorities   Reduces duplication of HR activities   Reduces cost of new HR technologies   Builds teams of HR experts   Provides better measurement of HR performance   Allows for sharing of applicant pools

Measuring Recruiting Effectiveness What to Measure (not just numbers) How to Measure (pre- screening) Evaluating Recruiting Effectiveness

5–30 Selection Devices that Could be Used to Initially Screen Applicants Selection Device Validity for Predicting Job Performance* Construct General mental ability tests0.51 Conscientiousness tests0.31 Integrity tests0.41 Method Work sample tests0.54 Job knowledge tests0.48 Structured interviews0.51 Biographical data0.35 Grade point average0.23 Ratings of training and experience0.11 Note: *Higher is better. Source: Kevin Carlson et al., “Recruitment Evaluation: The Case for Assessing the Quality of Applicants Attracted,” Personnel Psychology 55 (2002), p. 470.

Recruiting Yield Pyramid

Internal Candidates: Hiring from Within   Foreknowledge of candidates’ strengths and weaknesses   More accurate view of candidate’s skills   Candidates have a stronger commitment to the company   Increases employee morale   Less training and orientation required   Failed applicants become discontented   Time wasted interviewing inside candidates who will not be considered   Inbreeding strengthens tendency to maintain the status quo AdvantagesDisadvantages

Finding Internal Candidates Hiring from Within Job Posting Succession Planning (HRIS) Rehiring Former Employees

Outside Sources of Candidates Advertising Recruiting via the Internet Employment Exchange Temp Agencies and Alternative Staffing Outsourcing Direct Applications Executive Recruiters Campus Recruiting Referrals and Walk-ins Locating Outside Candidates

Evaluation and Control  TLD (Time Lapsed Data) – Lead Time for various stages to yield results  Yield Ratio  Salaries for Recruiters  Management and Professional Time spent (JD, JS, Advt, Agency Liasion)  Cost of advertisements, subscriptions to portals  Supporting literature, if any  Overheads, travel, board and lodge  Overtime and substitute costs while position remains unfilled  Cost of selection process Cost per hire

Improved Productivity Through HRIS: An Integrated Technology Approach to Recruiting Requisition Management System Integrated Recruiting Solution Screening Services Hiring Management Integrated Employee Recruitment System

Application Forms Applicant’s education and experience Applicant’s likelihood of success Applicant’s progress and growth Uses of Application Information Applicant’s employment stability