HR Planning

1. HR Planning

2. HR Planning (HRP) • Determining organization's HR needs. • Ensuring right number of qualified people in right jobs at right time. • System of matching supply of people with position openings anticipated. 5-2

3. HRP and Organizational Planning • HR plan must flow from the strategic and operational plans of the organization. 5-3

4. HRP and Organizational Planning • HR Demands and are derived from Strategic and operating plans, then compared with HR Availability. • Non-Integrated Approaches concentrate on short-term crises, rather than long-term strategic needs. 5-4

5. Strategy-Linked HRP • HRP is not a strictly an HR function. • Strategy-linked HRP: • Based on genuine cooperation and a working relationship between HR staff and line managers. 5-5

6. Time Frame of HRP • Organizational plans are classified as: • Short-range (0 to 2 years) • Intermediate range (2 to 5 years) • Long-range (beyond 5 years) 5-6

7. Steps in HRP Process 1. Determine impact of organization’s objectives on specific organizational units. 2. Define skills, expertise, and total number of employees (demand) required to achieve organizational and departmental objectives. 3. Determine additional (net) HR requirements based on current HRs. 4. Action plans to meet anticipated HR needs. 5-7

8. Determining Organizational Objectives • Organizational Objectives: Statements of expected results • Long-term objectives and strategies are based on organization’s mission statement: • Used to establish short-term objectives. • Short-term objectives: have a time schedule and are expressed quantitatively. • Divisional and departmental objectives are based on organization’s short-term objectives. 5-8

9. Determining Organizational Objectives • Cascade Approach: Objective-setting involves all management levels. • Ensures objectives are communicated and coordinated through all levels. • HR managers can influence objective setting by providing information about organization’s current HRs. 5-9

10. Environmental Factors Impacting HR Needs • Government influences • General Economic conditions • Competition – Emergence or departure • Changes in workforce 5-10

11. Determining Skills & Expertise Required (Demand) • Starting point: review Job Descriptions. • Translate needed skills and abilities into types and numbers of employees. 5-11

12. Methods of Forecasting HR Needs – Judgment Methods • Managerial Estimates of future staffing needs • Delphi Technique • Scenario Analysis 5-12

13. Methods of Forecasting HR Needs – Mathematically Based • Statistical Methods: • Use historical data to project demand. • Modeling Methods: • Simplified abstraction of HR demands. • Changing input data allows testing HR ramifications of different demand scenarios. 5-13

14. Benchmarking • In HRP: What are other successful organizations in the industry forecasting, and how arriving at those forecasts? • Consultants and professional organizations can assist with the benchmarking process. • Advantage: Benchmarking forces HR managers to look at other ways of doing things. 5-14

15. Skills Inventory: Information Included • Personal data • Skills – Education, experience, training • Special qualifications • Salary and job history • Company data • Individual Capacity • Special individual 5-15

16. Skills Inventory: Advantages • Quickly and accurately evaluate skills available • Helps with promotion/transfer decisions. • Information for other decisions, such as whether to bid on a new contract. • Helps in planning future employee training and management development programs. • Helps in recruiting and selecting new employees. 5-16

17. Management Inventory • Specialized, expanded form of skills inventory for an organization’s current management team. • Contains basic types of information. • Usually includes assessment of past performance and potential for advancement. 5-17

18. Anticipating Changes in Personnel • Retirements – Forecasted from skills inventory • Transfers and Promotions – Estimated via: • Age of individual in specific jobs • Requirements of organization • Need to identify Individuals with promotion potential. • Deaths, Resignations, Discharges are difficult to forecast 5-18

19. Develop Action Plans – Adding HRs • Factors include: permanency of needs, availability of qualified recruits, and union contracts. • Permanent Hires – Plans to recruit, select, orient, and train needed personnel, in given time frame. 5-19

20. Developing Action Plans – Adding HRs • Contingency Hires – Advantages: • Accommodates swings in HR demand • Lower cost – Fewer or no benefits? • Temporary agencies – can provide testing and training. • New perspectives, experiences brought to the organization. • Outsourcing: • Work contracted out at a cost savings? • Company can focus on its core business 5-20

21. Developing Action Plans – Reducing HRs • If time not an issue, natural attrition can be used • Downsizing – Reducing total # of employees: • Layoffs and Terminations • Early retirement inducements • Voluntary resignation inducements • Layoff assumes recall at a later date. 5-21

22. Reducing HRs – Other Approaches • Reclassification • Transfer • Work Sharing 5-22

23. Reviewing the HRP Process • Organizational objectives are translated into divisional and departmental objectives: • Determine HRs needed to meet objectives. • Determine additional (net) HR requirements based on available resources and anticipated changes: • Positive net requirements: Recruitment, selection, training, and development implemented. • Negative net requirements: HR costs reduced via downsizing and other means. 5-23

24. Succession Planning • Identify specific people to fill future openings in key positions: • Organizational Replacement Chart: Incumbents and potential replacements. • Succession Planning helps ensure qualified internal candidates are not overlooked. 5-24

25. Replacement Chart Terminology • PN = Promotable Now • P(3) = Promotable in 3 Years • HP = Highly Promotable • NP = Not Promotable • NBU = No Back-Up 5-25

26. Succession Planning – Drawbacks • “Crowned Prince” Syndrome • Requires Computerization 5-26

27. Ratio Analysis • Tool to measure HR vitality, indicated by presence of promotable employees and existing backups. • “Vital” organization: Employees have high potential to be promotable, and backups have been identified to replace them. • “Stagnant” organization: Employees are not promotable and no backups have been identified to replace incumbents. 5-27

28. Ratio Analysis • Organizational Vitality Index (OVI): • Index resulting from ratio analysis -- • Reflects organization’s HR vitality • Calculation based on number of promotable employees and number of existing backups 5-28

29. HR Information Systems (HRIS) • Database System containing all relevant HR information; provides facilities for maintaining and accessing these data. • Disadvantages: • Financial cost and labor requirements for implementing system – greatly reduced as a result of newer software. 5-29

30. HR Information Systems (HRIS) • Advantages: • Potential for producing more accurate and timely information for operating, controlling, and planning purposes. • Gets rid of paper personnel files! • New software packages are more user-friendly, requiring less training and time to implement. 5-30

31. Applications of HRIS • Clerical (routine) applications • Applicant Search • Risk Management • Training Management • Training Experiences • Financial Planning • Turnover Analysis • Succession Planning 5-31

32. Applications of HRIS • Flexible-Benefits Administration • Government Regulation Compliance • Attendance Reporting and Analysis • Accident Reporting and Prevention • Strategic Planning • HR Planning 5-32

33. Important HR-Related Internet Sites • SHRM: www.SHRM.org • Bureau of National Affairs: www.bna.com • Dept. of Labor, Bureau of Labor Statistics: www.bls.gov 5-33