Lesson 2.1: Human Resource Planning (PPT)

Planning

Doing something in order; Devising a plan or schedule to do things in order step-by-step to achieve organizational goals

Human Resource Planning (HRP)

• The process of systematically forecasting the future human resource needs of an organization, ensuring that the necessary skills and talent are available when needed.

• It identifies current and future workforce needs in line with strategic goals by forecasting labor demand and supply, so the right number of employees with the right skills are available at the right time.

Concerned with how people are employed and developed in order to improve organizational effectiveness

Armstrong’s View of HRP

Organizational Effectiveness

How people are employed and developed in order to improve organizational effectiveness

Ensures that the right number of people with the right skills are in place to meet business objectives

HRP as a key function

Right number of people, right skills, right place, right time

4 ‘Rights’ of HRP

Number, Types, Attraction/Retention, Utilization, Environment/Development

5 Questions of HRP (Grant, 1991)

Integral to Business Planning, Interprets People Requirements, Influences Business Strategy

Link Between Workforce & Business Planning

Defines projected changes in activity & scale; Identifies core competencies

How is workforce planning integral to business planning?

It translates business plans into actionable workforce needs.

How does workforce planning interpret people requirements?

Develop/Deploy, Source/Supply

How does workforce planning influence business strategy?

Michael Armstrong (1992)

Author of Workforce Planning Model

Business Plan, Forecast of Activity Levels, Scenario Planning, Data Collection, Analysis, Demand Forecasting, Supply Forecasting, Forecast of Future Requirements, Action Planning, Implementation, Monitoring & Evaluation

11 Steps in the HRP Process (Workforce Planning Model)

Business Plan (1)

• Clarifies organizational goals, priorities and future activities.

• the roadmap of the org.’s goals

• t is the basis for the workforce plan and outlines the organization's intended activities and the scale of those activities

Business Planning

• process of defining an organization's goals, strategies and actions for achieving them.

• It includes analyzing the current business environment, setting long-term objectives, and developing plans for operations, finance, marketing and human resources

Executive Summary, Business Description, Market Analysis, Organizational Structure, Marketing and Sales Strategies, Financial Projections, Operational Plan

7 Parts of a Business Plan

Executive Summary

An overview of the business, its mission and its primary objectives

Business Description

Information about the company, its products or services, and its target market

Market Analysis

A detailed examination of the industry, competitors and market trends

Organizational Structure

A description of the business's management team and internal organization

Marketing and Sales Strategies

Plans on how the company will attract and retain customers

Financial Projections

Forecasts of revenue, expenses and profitability

Operational Plan

Details about day-to-day operations, including production, logistics and supply chain management

Forecasting Activity Level (2)

• Estimating how much work, output or service demand is likely to arise

• It stems from the business plan and affects the demand for people.

• Activity levels are influenced by external factors (e.g., demographic, political trend)

Scenario Planning (3)

• Assessing potential environmental changes affecting the organization, including possible external changes, risks and opportunities that may affect staffing.

• It involves creating and evaluating potential future scenarios to prepare for market or environmental change and helps organizations make flexible long-term plans

PESTLE Analysis (Political, Economic, Social, Technological, Legal, Economic)

Tool used for Scenario Planning; examines key external factors that may impact the workforce

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)

• helps in understanding internal capabilities and external opportunities or risks that might impact strategic planning and decision-making

Data Collection (4)

Gathering the internal and external workforce information needed for planning

Product/market changes, skillsets, performance

Internal Qualitative Data

Workforce turnover, absenteeism, demographics

Internal Quantitative Data

PESTLE Factors

External Qualitative Data

Labor market demographics and skill availability

External Quantitative Data

Analysis (5)

Combines data from business plans, activity forecasts and internal/external sources to analyze the evidence and estimate how many employees and skills will be required

Demand Forecasting

• process of estimating the future number of employees needed by an organization.

• It involves predicting the number of people required to meet organizational goals, based on business plans, anticipated activity levels, organizational changes and market trends

Managerial Judgement, Bottom-up/Top-Down Approach, Ratio-Trend Analysis

Demand Forecasting Methods

Managerial Judgement

Managers estimate staff needs based on future workloads.

Bottom-Up/Top-Down Approach

Combination of departmental (bottom-up) & company-wide (top-down) forecasting

Ratio-Trend Analysis

Uses historical ratios between activity levels and staff numbers to project future staffing needs based on anticipated activity levels and productivity changes

Supply Forecasting (6)

contains internal supply analysis and external supply analysis

Internal Supply Analysis

Looks at current staff numbers, turnover, promotions and productivity

External Supply Analysis

Looks at local and national labor market availability and environmental changes

Forecasting Future Requirements (7)

Balancing supply and demand by comparing them to forecast future employee needs and identify gaps, deficits (shortages) or surpluses

Action Planning

• Deciding what HR actions are needed, such as recruitment, training, redeployment, retention or succession planning.

• Plans are short-term and flexible because of unpredictability

Recruitment, Retention, Succession, Talent Management, Flexible Working, Learning & Development, Productivity, Downsizing

8 Focus Areas of Action Planning

Downsizing

Reducing the workforce, ideally avoiding redundancies through hiring freezes or other means

Implementation, Monitoring & Evaluation

Putting the plan into action, tracking progress, evaluating outcomes and adjusting plans where necessary

Implementation

Requires flexibility and quick responses to changes in workforce needs

Monitoring

Tracking progress, evaluating outcomes and adjusting plans as necessary

Optimal use of human resources; Manage labor shortages/surpluses; Aligns HR strategy with business objectives; Supports organizational growth and flexibility

Core Definitions & Importance of HRP

Right people, right skills, right time; Supports business goals and growth; Anticipates labor shortages/surpluses; Cost control & productivity; Succession, development, & retention; Flexibility during change and uncertainty

6 Importance of HRP

Right people, right skills, right time

HRP ensures the organization has the right number of people with the right skills in the right roles at the right time

Supports business goals & growth

Aligns workforce planning with the organization's strategic objectives, helping it grow and remain competitive

Anticipates labor shortages/surpluses

Uses analysis and forecasting to predict future workforce needs, reducing the risk of skill gaps or excess staff

Cost control & productivity

Helps manage labor costs by matching staffing levels with actual needs, leading to higher productivity and better resource use

Successions, development, & retention

Identifies future talent needs, supports career development and helps retain key employees through planned succession

Flexibility during change and uncertainty

Helps the organization prepare for changes such as new technology, market shifts or economic uncertainty by building a flexible and adaptable workforce

Impact of change, Trying to predict the future in a dynamic, globalized business environment

Workforce Planning Issues/Main Difficulties in Quantitative Workforce Planning

More an art

Workforce Planning - Art or Science?