HUMAN RESOURCE PLANNING

HUMAN RESOURCE PLANNING

Human resource planning is a process of forecasting and preparing for human movement into, within and out of an organisation. The aim of human resource planning is to utilise human resource effectively so that the organisation’s goals can be achieved. Human resource planning also ensures the organisation has the correct total and type of employees.

1.1 Importance of Human Resource Planning

(a) Recruitment

Changes in the employee environment and composition require the manager to be more involved in human resource planning. The manager must plan a more effective recruitment method so that the aim to hire capable employees will be achieved.

(b) Reducing non-visible costs

Human resource requirements that are effectively planned will reduce an organisation’s losses. For example, a job vacancy that is immediately filled will not disrupt organisation’s operations. Quality of products or services will be maintained and organisation’s losses can be avoided.

(c) Employee career planning and development

Any weaknesses in human resource planning will give a negative effect to an employee’s career. Employees’ opportunities to further themselves in a job and position are limited.

(d) Effectiveness of human resource management programmes

Human resource planning is a basis to standardise human resource management functions. For example, an employee from Section B has resigned, but an employee is being hired to work in Section A even though Section A does not need a new employee. This shows that the human resource management functions are not performed effectively.

1.2 Human Resource Planning and Strategic Planning

For the purpose of future organisational planning, a human resource manager must combine human resource planning with the organisation’s strategic planning. There are three methods on how human resource planning and strategic planning can be related

(a) Relating the Strategising and Execution Process

Human resource planning is related to strategic planning at the beginning and final stages. In the beginning, human resource planning is the input in the strategising process. Human resource planning will address what can be done. In the final stage, strategic planning and human resource planning is related in terms of their implementation. When the strategies are set, the management must decide on the division of source, including matters involving structure, process and human resource.

The combination of human resource planning and strategic planning is effective when both plans assist each other. In this matter, the top management must understand that decisions made in strategic planning will affect human resource planning, and vice versa. The human resource manager is seen as part of the management team planning the organisation’s strategic planning.

(b) Determines the Types of Human Resource Present in the Organisation

The strategies planned can be related to the human resource in terms of employee’s basic efficiency. This is because aside from the basic efficiencies, each organisation has its own employee skills and human resource.

Therefore, in every organisation, there are a few categories of employees that help an organisation to be more competitive. These employees can be divided into four categories based on their skills and the strategic values given to them by the organisation.

(i) Employees with Core Knowledge

This refers to employees with special skills and high strategic values. An organisation needs to give a high commitment to these employees by giving them training and opportunities to develop. Examples of employees with core knowledge are accountants and computer programmers.

(ii) Employees with Traditional Tasks

This refers to employees who have skills, but not unique. Usually an organisation does not give much training and opportunities for the employees to develop career wise. Examples of these employees are salespeople and drivers.

(iii) Contract Labourers

This refers to employees that are readily available and with limited tasks, for example, clerks and furniture restorers.

(iv) Affiliates

Affiliates have unique skills but are not related to the organisation’s basic strategies. An organisation tries to promote a good relationship with their affiliates and invests in the exchange of information and knowledge. Examples of affiliates are lawyers, consultants and lab researchers.

(c) Ensures the Suitability and Flexibility of the Human Resource Planning Practices

Another way of relating human resource planning and strategic planning is to suit the policies, programmes and practices of human resource planning to the organisation’s strategic requirements.

Human resource planning policies and practices must achieve to types of adaptation, i.e. external adaptability and internal adaptability.

(i) External adaptability focuses on the relationship between business objectives and the main human resource efforts. For example, to achieve a low operational cost, the human resource planning policies and practices must support the direction of low operational costs.

(ii) Internal adaptability is a human resource planning practice that is suited between one another to produce a symbiosis relationship. For example, job design and training focus on the same behavioural target, such as efficiency and creativity in work.

When changes taken place in the working environment, human resource planning must be flexible and able to withstand the change. This will increase an organisation’s ability to act and change in the efforts to maintain the organisation’s competitive advantage. Flexibility can be achieved in two ways, i.e. coordination flexibility and source flexibility.

(i) Coordination flexibility happens through a swift resource change to fulfil new or changed requirements. For example, through human resource planning, the manager can predict economic trends and competitor’s pace.

(ii) Source flexibility happens when employees are able to perform many different tasks in many different ways. For example, an employee can work as a team, or switch tasks, and is flexible in nature, in terms of manpower.

1.3 Human Resource Planning Process

Through human resource planning, an organisation can forecast and prepare for

human movement into, within and out of the organisation. Therefore, the steps

involved in human resource planning:

• environmental scanning;

• predicting manpower needs;

• predicting manpower provision; and

• balancing human resource supply and requirement.

(a) Environmental Scanning

Environmental scanning systematically detects the external forces that influence the organisation. The external forces or factors often scanned are:

(i) Economic factors, including local and global economy.

(ii) Competitive trends, including processes, services and new innovations.

(iii) Technological changes, including robotic technology and office automation.

(iv) Political and legal issues, including laws and administration.

(v) Social matters, including childcare and education

(vi) Demographic trends, including age, composition and literates.

Aside from scanning the external environment, internal scanning is also carried out. A cultural audit is the scanning of the organisation’s culture and work life quality in an organisation.

(b) Predicting Manpower Needs

Based on the human resource planning model as shown in Figure 2.5, there are two types of approach to predict manpower needs in an organisation.

The approaches are quantitative approach and qualitative approach.

(i) Quantitative Approach

Quantitative approach involves the use of statistical and mathematical techniques. This approach is often used by professional planners. One of the examples of the quantitative method is trend analysis.

Trend analysis is a quantitative approach to predict labour needs based on an index. Other quantitative methods that can be used to predict human resource needs are regression analysis, ratio analysis and timeline analysis.

ii) Qualitative Approach

A qualitative is an approach that does not involve much statistics but takes into consideration employees’ interests, abilities and aspirations in fulfilling future staffing requirements. In this method, the human resource manager predicts manpower needs through considerations.

Among the qualitative methods often used are management forecasting and the Delphi Technique.

Management forecasting is opinions, considerations or proposals from supervisors, department managers, experts or those with knowledge in human resource requirements for the organisation in the future.

The Delphi Technique is a technique of obtaining and summarising proposals or considerations from chosen experts on manpower needs in an organisation. This technique reduces biasness as the final prediction is a combination of experts’ predictions.

(c) Predicting Manpower Provision

After an organisation predicts employee needs, it has to determine whether the number and types of current employees will be sufficient for the future.

This process involves detecting the level of current and future supply, whether inside or outside the organisation.

There are various methods to detect and predict the total number of internal manpower. Among these methods are:

(i) Staffing Schedule

A staffing schedule gives a graphic display on all jobs in an organisation, including existing number of employees involved in the jobs. It also contains employees’ needs for the future.

(ii) Markov Analysis

This analysis detects the pattern of employee movement through various types of jobs. It shows the percentage and actual figure of employees who still remain in a particular job, employees who are promoted, demoted, transferred or removed from the organisation.

Through the Markov Analysis, employee movement matrix can be developed and the supply of internal human resource can be predicted.

(iii) Skill Inventory

Skill inventory consist of employee’s personal files that contain information on education, experience, interests, skills and others. Skill inventory enables the manager to promptly match the suitable positions with employee’s background.

(iv) Replacement Chart

A replacement chart consists of a list of current position holders, and those who have the probability to replace a position, should the position be vacant. This chart gives information on employee’s or the Manager’s current performance and the probability of a promotion.

(v) Succession Planning

Succession planning identifies, develops and detects important individuals for executive positions.

When an organisation experiences a shortage of internal sources for promotion, or for new positions at the beginning or lower level, a manager must look at external work source or labour provision from outside the organisation.

There are a few external factors that influence the labour market. Among them are demographic changes, economy, manpower level of education, requirements for certain skills, population movement and government policies. The unemployment rate at the national and state level often becomes the benchmark to detect the labour force or employee supply.

(d) Balancing Human Resource Supply and Requirement

Through human resource planning, an organisation balances between employee need and provision. The demands towards employees are based on trend forecasting in an organisation’s business activities.

Offer involves determining where and how potential employees can be found in order to fill expected vacancies. Matters become difficult if a particular job needs specific training, and this will require a more thorough planning.

If there is a job vacancy, whether aiming at replacing an employee who has resigned or the existence of a new position, an organisation must employ a new worker. The organisation can recruit a full time or part time employee, depending on its requirements.

An organisation can also re-hire employees who have resigned if the organisation feels that it is appropriate. For short-term and temporary actions, the organisation can encourage its employees to work overtime in order to fulfil the organisation’s current requirements.

When an organisation experiences a surplus of manpower, there are a few actions that can be taken to reduce the existing number of employees, such as:

(i) Limiting the intake of new employees, unless really necessary.

(ii) Replacement of employees who have resigned or retired, or died, will not be exercised.

(iii) Employees can be asked to share a job or task, demoted, advised to retire, terminated from service or laid off if really necessary.

However, all organisations’ actions must follow the existing regulations and laws.