1. Human Resources Planning 4 Human Resources Management in Canada
Dessler & Cole
Human Resources
Management in Canada
Canadian Eleventh Edition
Laurier Version 4
Human Resources
Planning

2. Strategic Importance of Human Resources Planning
Human resources planning (HRP)
The process of reviewing human resources requirements to ensure that the organization has the required number of employees, with the necessary skills, to meet its goals
Key steps in the HRP process include:
Forecasting demand for labour
Analyzing the labour supply
Planning and implementing HR programs to balance supply and demand
A proactive process; helps organization achieve its strategic goals
Essentially balancing supply and demand of labour.
Effective human resource planning determines a firm’s survival in the lung-run.
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3. Importance of Human Resources Planning
Achieve strategic goals and objectives
Achieve economies in hiring new workers
Make successful major labour market demands
Anticipate/avoid staff shortages/surpluses
Control/reduce labour costs
Cost of replacement is the salary?

4. Results of Inadequate HR Planning
Vacant positions creating costly inefficiencies
Mass layoffs requiring severance pay
Simultaneous layoffs and hiring reduces morale and productivity, creates turnover
Inability to meet operational & strategic plans

5. Strategic Importance of Human Resources Planning
Canadian employers are doing little to tackle impending labour shortage
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6. HR Planning & Recruitment
First Who …… Then What
First, Get the right people on the bus & the wrong people off
Next, Get the right people in the right seats
Then they figure out where to drive it!
People are not the most important asset.
The right people are.
Collins, Jim, Good To Great (2001), page 13

7. Figure 4.2
The Model
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8. Strategic Importance of Human Resources Planning
Figure 4.3
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9. Relationship Between HRP and Strategic Planning
Figure 4.4
Become effective when a Reciprocal, interdependent
relationship exists between them
environmental scanning
critical for both
Determining how many people will be available is a critical element of the strategic planning process
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10. The Importance of Environmental Scanning
The external environmental factors most frequently monitored include:
Economic conditions (general, regional, and local)
Market and competitive trends
New or revised laws
Social concerns related to health care, childcare, and educational priorities
Technological changes
Demographic trends*
Most successful organizations are prepared for changes before they occur
Economic conditions affect supply/demand for products and services
Today most significant environmental factor relates to the dramatic demographic changes in the labour force.
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11. Steps in HRP
3. Planning and implementing HR programs to balance supply and demand
2. Forecasting availability of internal and external candidates (supply)
1. Forecasting future HR needs (demand)
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12. STEP 1:Forecasting Future HR Needs (Demand)
Forecasting based on:
Projected turnover as a result of resignations/terminations
Quality and nature of employees relative to needs
Decisions regarding product quality and new markets
Plans for technological and administrative changes to increase productivity and reduce headcount
Financial resources available
Managers must consider various factors
Ex: In manufacturing firm sales projected first, the volume of production required to meet sales. Finally staff needed to maintain volume.
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13. Forecasting Future HR Needs (Demand)
Quantitative Approaches:
Trend analysis: review past employment levels to predict future needs
Ratio analysis: ratio of business activity (e.g. Sales) and number of employees needed
Scatter plot: used to determine whether two factors (business activity and staffing levels) are related
Regression analysis: examines the statistical relationship between business activity and employees
Computerized forecasting
In larger organizations, needs forecasting is primarily quantitative in nature and conducted by trained specialists
Trend analysis: valuable as an initial estimate only, since employment levels rarely solely depend on the passage of time. Other factors may affect needs.
Ratio Analysis: like trend analysis, assumes productivity will remain the same, if productivity increases/decreases the ratio would change and a forecast using historic ratios would not be accurate.
Scatter Plot:
Regression Analysis: statistical technique using a mathematical formula to project future demands based on the relationship between an organization’s employment level (dependent variable) and some measureable factor of output (independent variable). Several variables = multiple regression analysis.
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14. Forecasting Future HR Needs (Demand)
Qualitative Approaches:
Nominal Group Technique
Group of experts meeting face to face
Steps include independent idea generation, clarification and open discussion, and private assessment
Delphi Technique
judgmental forecasting method used to arrive at a group decision, typically involving outside experts and organizational employees
ideas are exchanged without face-to-face interaction and feedback is provided and used to fine-tune independent judgements until a consensus is reached
Managerial judgment - central to qualitative forecasting, also plays key role when quantitative techniques are used
Qualitative approaches range from sophisticated analytical models to informal expert opinions about future needs. Qualitative approaches rely on expert judgements.
NGT: steps: 1. members write down ideas on the problem, 2. each member presents on idea until all ideas have been presented (no discussion permitted during this step), 3. clarification is sought followed by discussion/evaluation 4. each member ranks ideas independently and in silence
Advantages: involvement of key decision makers, future focus, discussion is involved.
Draw-backs: subjectivity, group pressure may lead to less accurate assessment
Delphi Technique: useful for long-term forecasting and other strategic planning issues. Steps: 1. problem is identified, each member submits potential solution by completing a questionnaire. 2. Results of questionnaires are compiled at a centralized location, 3. each member given copy of results, 4. individuals use feedback from other experts to fine-tune their own assessment. 5. steps 3-4 are repeated until a consensus is reached.
Advantages: same as NGT however Delphi allows group to evaluate a wider range of views
Drawbacks: judgements may not efficiently use objective data, time/costs involved, difficulty of integrating diverse opinions.
Managerial judgment: central to qualitative forecasting, also plays key role when quantitative techniques are used
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15. Summarizing HR Requirements
Staffing Table:
a pictorial representation of all jobs within the organization, along with the number of current incumbents and future employment requirements (monthly or yearly) for each
Figure 4.6
The end result of a forecasting process is an estimate of short-term and long-term HR requirements.
Long-term plans are general statements of potential needs and often do not include specific numbers
Short-term plans often depicted in a staffing table.
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16. Forecasting Availability of Internal and External Candidates (Supply)
Markov Analysis
a method of forecasting internal labour supply that involves tracking the pattern of employee movements through various jobs and developing a transitional probability matrix
The probabilities are used to forecast human resource supply.
In addition to such quantitative data, skills and capabilities of current employees must be assessed and skills inventories prepared.
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17. Forecasting Availability of Internal and External Candidates (Supply)
Skills Inventories
manual or computerized records summarizing employees’ education, experience, interests, skills, and so on, which are used to identify internal candidates eligible for transfer and/or promotion
Management Inventories
records summarizing the qualifications, interests, and skills of management employees, along with the number and types of employees supervised, duties of such employees, total budget managed, previous managerial duties and responsibilities, and managerial training received
To be useful the inventories must be updated regularly. Failure to do so can lead to present employees being overlooks for job openings. Updating every two years is generally adequate.
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18. Forecasting Availability of Internal and External Candidates (Supply)
Replacement Charts
visual representations of who will replace whom in the event of a job opening
likely internal candidates are listed, along with their age, present performance rating, and promotability status
Replacement Summaries
lists of likely replacements for each position and their relative strengths and weaknesses, as well as information about current position, performance, promotability, age, and experience
Replacement Charts: Keep track of potential internal candidates for a firm’s most important positions. This information may be supplemented by results of psychological tests, interviews with HR and other selection techniques.
Replacement Summary: used since replacement charts contain little information
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19. Forecasting Availability of Internal and External Candidates (Supply)
Succession planning
Process of ensuring suitable supply of successors for current and future senior or key jobs so that careers of individuals can be effectively planned and managed
Includes:
Analysis of the demand for managers and professionals in the company
Audit of existing executives and projection of likely future supply
Planning of individual career paths based on objective estimates of future needs, performance appraisal data, and assessments of potential
Career counselling and performance-related training and development to prepare individuals for future roles
Accelerated promotions, with development targeted at future business needs
Planned strategic recruitment, aimed at obtaining people with the potential to meet future needs, as well as at filling current openings
For every two senior executives, there is only one job ready successor.
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20. Succession Planning
Figure 4.8
An Example
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21. Forecasting the Supply of External (Outside) Candidates
To project supply of outside candidates, employers assess:
General economic conditions
National labour market conditions
Local labour market conditions
Occupational market conditions
A key factor in determining the number of positions that must be filled externally is the effectiveness of the organization’s training and development and career-planning initiatives.
General Economic: forecast expected unemployment rate. Provides estimate of how difficult it will be to recruit new employees. Low unemployment = smaller labour supply = more difficult to recruit. High unemployment may still lead to unfilled jobs since varies by occupation and location
National Labour Market: Demographic trends have a significant impact on national labour market conditions. Baby boomers retiring; not enough young workers entering labour pool. Highly educated immigrants are the drivers of growth in the labour pool.
Local Labour Market: affected by community growth rate and attitudes.
Occupational Market: Organizations also generally want to forecast the availability of potential candidates in specific occupations for which they are recruiting.
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22. Planning and Implementing HR Programs Balancing Supply and Demand
A labour surplus (too many employees!) exists when the internal supply of employees exceeds the organization’s demand
Employers may respond with:
hiring freeze
attrition
early retirement buyout programs
job sharing
work sharing
reduced work week
layoff
supplemental unemployment benefits
termination with severance package
Hiring freeze: openings filled by reassigning current employees, no outsiders are hired.
Attrition: normal separation of employees due to resignation, retirement, death. Takes a long time and company has no control over who stays/leaves.
Early retirement buyout: Used to accelerate attrition by offering attractive buyout packages or opportunity to retire on full pension. Often require money upfront.
Job sharing: dividing duties of a single position between two or more employees. Reducing full-time positions to part-time may be more effective. Either way lay-offs can be avoided.
Work sharing: employees work 3-4 days a week and receive EI benefits on their off-days
Reduced work-week: similar to work sharing except no formal arrangement with government regarding EI; work fewer hours and receive less pay.
Layoff: temporary withdrawal of employment to workers for economic/business reasons. May be short or long.
supplemental unemployment benefits: a top-up of EI benefits to bring income levels of temporarily laid off workers closer to what an employee would receive if on the job. Usually negotiated through collective bargaining.
Termination: permanent separation from the organization.
Severance package: offered to those being terminated.
Golden parachute clause: executives may have a specified severance outlined in contracts.
Out-placement assistance: can assist terminated employees in finding new jobs, often offered by outside agencies.
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23. Planning and Implementing HR Programs Balancing Supply and Demand
A labour shortage exists when the internal supply of human resources cannot meet the organization’s needs
Employers may respond with:
overtime
hiring temporary employees
transfer
promotion
Overtime, hiring temps = short term
Transfer: movement of an employee from one job to another that is relatively equal in pay, responsibility, and organizational level
Promotion: movement of an employee to a new job that is higher in pay, responsibility, and organizational level, usually based on merit and/or seniority.
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24. Balancing Supply and Demand
Canada’s Looming Labour Shortage
Over the next 20 years, the vast majority of baby boomers will transition from working life to retirement, creating a critical undersupply of labour
Strategies to deal with Canada’s looming labour shortage:
Increase the workforce participation of older Canadians
Increase the number of aboriginal employees
Increase the number of visible minority employees
Increase the number of female employees
Access largely untapped pool of talent from people with disabilities
Offer flexible work arrangements
SOLUTION: HIRE THOSE THAT ARE DISCRIMINATED: FEMALE/ABORIGINAL/MINIORITIES/DISABLED
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25. Flexible Work Arrangements
Flextime
employees build their workday around a core of midday hours
Compressed Work Week
an arrangement that most commonly allows employees to work four ten hour days instead of the more usual five eight-hour days
Flexyear
a work arrangement under which employees can choose (at six-month intervals) the number of hours that they want to work each month over the next year
Telecommuting
there are many benefits to the worker, the employer, and to society
Telecommuting: reduces travel time for employees and permits them to work whenever they are most productive. Organizations report improvements in saving, productivity, and morale. Managers fear loss of control.
Job sharing may be used or reduced work week.
Compressed work week: advantages: productivity increase due to fewer start-ups/shut-downs, effective in reducing overtime pay absenteeism and improving efficiency. Fatigue may be a problem.
Flexyear:
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26. Planning and Implementing HR Programs Balance Supply and Demand
When the labour supply matches the labour demand, organizations replace employees who leave the firm with individuals transferred or promoted from inside or hired from outside
As in shortage situations, performance management, training, and career development play crucial roles
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