Human Resource Planning

After formulation of HR strategy the organizations conduct HR planning as means of implementation of strategy. HR planning process is always fully integrated with the strategy. Hr planning may be identified as competitive advantage of organizational human resource and may be used to assess feasibility of different strategic alternatives in terms of human resource capabilities.

Strategic Role of HR Planning Developmental planning for Strategic Leadership. –Stress on succession planning- to have qualified replacements for high executive turn over. Assessment of strategic alternatives- forecast regarding availability of candidates for required knowledge and skills- future critical roles, tasks, skills etc. Adding Value- difficult to quantify value of HR planning- HR planning becoming more important for organizations day by day and HR planning do add value for effective planning of the organizations

Strategic Role of HR Planning Contribution to strategic HR management. –A survey indicated three major components of HR planning: For developing human resource. For avoiding personnel shortages. For budgetary purpose and To obtain information for decisions. Strategic Salary Planning.- salary planning significantly impacts organizational goals. Strategic salary planning ensures compatibility and draws on the rationale of the essence of organizational strategy.

Human Resource Planning Steps Human resource planning encompasses following steps: –Interfacing with strategic planning and scanning environment. –Taking an inventory of the company’s current human resources. –Forecasting demand of human resource. –Forecasting supply situation of human resource within and out of organizations. –Comparing forecast of demand & supply. – Planning the action needed to deal with anticipated shortages. –Feeding back such information into the strategic planning process.

Overview of HR Planning Planning in a context of change. –Strategies and planning are forward looking activities to deal with changing phenomena, which warrant flexibility for accommodating changes in the environment. Responsibility for Human Resource Planning. –Mostly it’s responsibility of HR specialist but the process needs to have input from functional areas based on their future plans / needs/ challenges. –Line management involvement in HR planning makes these plans more realistic and practical. Failure to plan for Human Resources. –Since the labour cost is most important cost in operating therefore failure to effectively plan for human resources adversely impacts business plan of the organizations.

Managerial Issues in Planning. Personal implication. –The HR planning process warrants HR professionals to extensively interact with other line managers / functional heads about future human resources environment and associated staffing issues. –One of benefit of effective hr planning is that the senior management will be more comfortable with the knowledge that the manager has thought over implication of potential demand and supply relationship. Changing Receptivity towards planning. –To meet the challenges of constantly changing environment, HR planning has gained more importance in the organization’s business plans. keeping centralized planning arrangements, trend of forecasting techniques on a decentralized basis by line managers is also evident. –HR direct role in HR planning is now shifting to more indirect or shared involvement by involving line / functional managers into the process. Implications of the European Experiences. –Restrictions on lay-offs make hr planning more important to avoid lay-offs. –Job security factor for employee motivation also emphasizes the need of effective planning.

Selecting Forecasting Techniques Purpose of planning. –If it is forecasting HR supply, replacement charts or markov analysis can be used. –If purpose is forecasting future age distribution to estimate healthcare etc. it is better to use some of renewal analysis in which specific numbers of employees in various individual jobs, job categories or job families would be unimportant. Organizational characteristics. –Forecasting techniques also depends on organization size, number of employees, complexity of organization etc. Industry Characteristics. –Type of industry also impacts selection of techniques for HR planning. forecasting in insurance and utilities companies has been more accurate than other industries. Environmental Turbulence. –Most of HR planning techniques used are unsophisticated which can easily be understood and used by line managers. Other Considerations. –Factors which impact selection of HR planning techniques depends upon the decision making requirements like long range or short term planning, required data, accuracy required.

Forecasting The Supply Of Human Resources –Replacement charts. Describe company’s organizational structure in terms of individuals occupying various managerial and professional positions. for each position incumbent, potential replacements are identified along with other information like individual potential for advancement, number of years of experience needed for qualifying for next higher position. Replacement charts are likely to be computerized,provides a description that how vacancies will be filled from internal resources. Used to asses employees abilities, qualifications to takeover future positions. Two organizational dimensions that guide such assessment: –Hierarchical or vertical movement to higher level of various jobs. –Horizontal movement for expanded responsibilities areas –Succession planning. Similar to replacement planning using replacement charts but succession planning is long term based on employee development focused. It involves more elaborate planning for skills development of potential replacements and their developmental needs.

Forecasting The Supply Of Human Resources –Markov analysis. The application of Markov Analysis to human resources forecasting providing a practical and versatile techniques for forecasting internal supply. It serves strategic purpose of evaluating availability of HR requirement for different strategies. It’s simple process to understand.in setting up Markov model the forecaster must account moves or flows of employees in an organization, moves from one job to another, moves across functions and levels. It starts with allocation of number of employees in different job catagories and considers possible moves of staff in a given timeline. Markov analysis can also be used in audits of human resources to find out flaws in execution of the plan. –Renewal models. This model reflect movement or flow of employees through companies as they are pulled upward to fill vacancies. This model can be used to analyze employees data like age, job classification, hiring of new employees, promotions of existing employees in different job categories. –Computer simulation. It’s most useful forecasting technique for guiding business decision. Through this process the forecaster can create number of different future scenarios by altering the values of the simulation parameters. Computer simulation allow planners and forecasters to asses the sensitivity of the simulation model’s parameters to alternative specifications.

Forecasting The Supply Of Human Resources Utilization of supply forecasting techniques. –A survey determined utilization rate for various supply forecasting techniques. The result was : Succession planning or replacement chars66.7% HR Inventories 66.7% Supervisor's estimates48.5% Rules of thumb or non statistical formulas27.3% Computer simulations12.,1% Renewal Models9.1% Regressions Analysis7.6% Markov or network Flow Models6.1% Trend Extrapolation6.1% Operations Research Techniques4.5%

Forecasting The Demand Of Human Resources Heuristics, rules of thumb and the Delphi techniques. Rules of thumb or simple guidelines that are used to predict demand for human resources. These are conceptual frameworks often expressed in diagrams to help HR forecasts organize relevant conceptual relationship and trace through the outcomes of various personnel action alternatives. Delphi technique based on the collocation of expert opinion and does not need a historical data base. Operations research and management sciences techniques. Techniques like linear programming, integer programming are generally considered as operations research or management sciences techniques. Another extension of linear programming called goal programming allows HR planners to take into consideration sequential and multiple managerial goals or constraints such as maximum headcount, budgetary limitations etc. Regression analysis. This is robust statistical technique having applicability to forecast demand for human resources. The predictor or independent variable used in this models includes operating revenues, sales, capital budgets etc.

Forecasting The Demand Of Human Resources Utilization of demand forecasting techniques. –The survey of techniques also examined the utilization rates for demand forecasting techniques. The results are : Supervisor’s estimate69.7% Succession Planning / Replacement charts65.2% Rules of thumb or non statistical formulas 37.9% Computer simulations18.2% Trend Extrapolation12.1% Regression analysis9.1% Delphi technique3.0%

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