Human Resource Planning

Human Resource Planning

• HR planning anticipates an organization's future employee needs
• HR planning aligns employee supply with demand
• The HR department ensures proper staffing levels
• HR planning aligns with different organizational strategies
• Proactive responses are facilitated through HR planning
• HR plans support successful tactical plans
• HR planning ranges from basic data collection to predictive analytics

HR Planning Sophistication

• Some companies have no formal HR planning, instead of using reactionary measures for HR activities
• Other companies plan for HR activities, using both proactive and reactionary planning in the short term (1-2 years)
• Advanced planning directly links strategy and HR, anticipating needs 3-5 years in advance
• Sophisticated planning integrates senior HR professionals into strategic processes, planning for 5+ years with strong expertise and technology

The Workforce Planning Process

• Step 1: Forecast Demand for Resources
• Step 2: Assess Supply of Resources
• Step 3: Develop HR Objectives
• Step 4: Design and Implement Workforce Systems to Balance Demand and Supply
• Step 5: Establish and Conduct Evaluation

Causes that Drive Demand

• Strategic Plan
• Demographic Impacts
• Turnover
• Legal Changes
• Technological Changes
• Competitors
• Budgets and Revenue Forecasts
• New Ventures
• Organizational and Job Design

Forecasting Techniques

• Expert: Informal and instant decisions, Formal expert survey, Delphi technique
• Trend: Extrapolation, Indexation, Statistical analysis
• Other: Budget and planning analysis, New-venture analysis, Simulation models

Expert Projection Forecasts

• Informal and Instant Decisions: Expert forecasts of future HR needs
• Nominal Group Technique: Managers make forecasts, discussed and ranked by the group
• Delphi Technique: Experts are surveyed, summaries are shared with individuals until opinions converge

Trend Projection Forecasts

• Extrapolation: Extends past rates of change into the future
• Indexation: Matches employment growth with an index (e.g. ratio of production employees to sales)
• Statistical Analysis: Allows for changes in the underlying causes of demand

Other Forecasting Methods

• Budget and Planning Analysis: Organizations needing HR planning generally have detailed budgets and long-range plans
• New Venture Analysis: Planners estimate human resource needs by making comparisons with similar operations
• Simulation and Predictive Models: Use more sophisticated approaches

HR Tools

• Internal Supply Indicators: Human Resource Audits, Skill inventories, Management inventories, Replacement charts/summaries, Transition matrices & Markov analysis
• External Supply Indicators: Labour market analysis, Community attitudes, Demographic trends

HR Audits

• Skills Inventories: Summary of worker skills and abilities
• Management and Leadership Inventories: Reports of management capabilities
• Replacement Charts: Lists of likely replacements for each job
• Replacement Summaries: Lists of likely replacements for each job and their relative strengths and weaknesses

Transition Matrices & Markov Analysis

• Both help describe the probability matrix and expected employee movements.

Labour Market Analysis

• Aims to evaluate the present or future availability of workers.

Community Attitudes

• Affects the nature of the labour market

Demographic Trends

• Affects the availability of external supply
• ESDC publishes labour force projections
• Statistics Canada publishes reports
• Canadian Occupational Projection System (COPS)

Oversupply Management Strategies

• Headcount reduction via layoffs, leave without pay, incentives for voluntary separation, and termination
• Attrition via hiring freeze and early/phased retirement options
• Alternative Work Arrangements: Job sharing and using part-time employees

Managing a Shortage of Employees

• Hire Employees: Full-time, Part-time, Temporary
• Source Service Providers: Independent contractor, Third party, Outsource, Crowdsource
• Develop Employees Internally: Replacement charts, Succession planning, Career development, Float and transfer
• Existing Work Arrangements: Overtime, Flexible schedules, Flexible time and location, Flex policies

Hire Full-Time Employees

• In cases where internal transfer or promotion isn't feasible, hiring full-time employees may be necessary.
• Results in additional fixed costs

Hire Part-Time Workers

• This is a popular strategy for meeting human resource needs.

Source Service Providers

• Independent contractor: freelancer (self-employed)
• Consultants: hired to provide expert advice and counsel in a particular area
• Outsource: contracting tasks to outside agencies or persons
• Crowdsource: takes a function once performed by employees and outsources it to an undefined network of people as an open call
• Co-source: a form of contracting that brings an external team to support and work with an internal team

Develop Employees Internally

• Promotions: Movement of an employee from one job to another that is higher in pay, responsibility, and/or organizational level
• Leverage succession and career plans.
• Training and development.

Creating Flexible Work Arrangements

• Overtime: Employees work beyond the normal hours
• Flexible retirement: Target those employees close to retirement to extend their contributions (e.g., retiree return)
• Float and transfer: Movement of an employee from one job to another that is relatively equal in pay, responsibility, and organizational level

Program Measurement and Evaluation

• Evaluate workforce planning activities against organizational goals
• Examples include vacancies in key roles being reduced, and targets of internal or external recruits being achieved
• Improvement ought to be measured year over year

Human Resource Information Systems (HRIS)

• A HRIS collects, records, stores, analyses, and retrieves data concerning an organization’s human resources
• HR professionals, managers, and employees are the major stakeholders from a HRIS

HRIS Functions

• Size
• Information that needs to be captured
• Volume of information transmitted
• Firm’s objectives
• Technical capabilities
• Reporting capabilities

Access to HRIS Information

• Access to HRIS Information: Determines who can access and change data with privacy considerations
• Security: Addresses concerns about unauthorized disclosure, viruses, etc.

HRIS - An Important Tool for Strategic HRM

• Increased efficiency via enhanced service delivery
• Increased effectiveness by helping stakeholders make better decisions
• Increased contribution to organizational sustainability via talent management
• Increased visibility with enhanced HR competencies

Human Resource Accounting (HRA)

• This is a process to measure the present cost and value of human resources as well as their future worth to the organization.