Strategic Human Resource Planning: Process and Importance

HRM and Development III -
Planning
 
 
The Process of Human Resource Planning
Organizations need to do human resource planning so they can meet
business objectives and gain a competitive advantage over competitors.
 
Human resource planning compares the present state of the organization with its
goals for the future
Then identifies what changes it must make in its human resources to meet those
goals
The strategic HR planning process
 
The strategic HR planning process has four steps:
Assessing the current HR capacity
Forecasting HR requirements
Gap analysis
Developing HR strategies to support organizational strategies
First step
First step
Assessing the current HR
Assessing the current HR
capacity
capacity
 
Assessing current HR capacity
 
 The first step in the strategic HR planning process is to assess the
current HR capacity of the organization
The knowledge, skills and abilities of your current staff need to be
identified. This can be done by developing a skills inventory for each
employee
 
 
The skills inventory should go beyond the skills needed for the
particular position. List all skills each employee has demonstrated.
 For example, recreational or volunteer activities may involve special
skills that could be relevant to the organization. Education levels and
certificates or additional training should also be included.
 
 
An employee's performance assessment form can be reviewed to
determine if the person is ready and willing to take on more
responsibility and to look at the employee's current development
plans.
Second Step
Second Step
Forecasting HR requirements
Forecasting HR requirements
 
 
The next step is to forecast HR needs for the future based on the
strategic goals of the organization
HR Forecasting attempts to determine the supply and demand for
various types of human resources, and  to predict areas within the
organization where there will be labor shortages or surpluses
 
 
 
There are three major steps to forecasting:
 
Forecasting the demand for labor
Determining labor supply
Determining labor surpluses and shortages
 
 
Forecasting the demand for labor
Forecasting the demand for labor
How many people need to be working and in what jobs to implement
organizational strategies and attain organizational objectives.
Usually an organization forecasts demand for specific job categories
or skill areas.
After identifying the relevant job categories or skills, the planner
investigates the likely demand for each.
 
 
 
The planner must forecast whether the need for people with the
necessary skills and experience will increase or decrease.
Constructing and applying statistical models that predict labor
demand for the next year, given relatively objective statistics from
the previous year.
 
 
Determining labor supplyPredicting Worker Flows and Availabilities
Succession or Replacement Charts
Who has been groomed/developed and is ready for promotion right NOW?
Human Resource Information Systems  (HRIS)
An employee database that can be searched when vacancies occur.
Transition Matrices  (Markov Analysis)
A chart that lists job categories held in one period and shows the proportion of
employees in each of those job categories in a future period.
It answers two questions:
1.
“Where did people in each job category go?”
2.
“Where did people now in each job category come from?
Personnel / Yield Ratios
How much work will it take to recruit one new accountant?
 
 
Determining Labor Surplus or Shortage
 
Based on the forecasts for labor demand and supply, the planner can
compare the figures to determine whether there will be a shortage or
surplus of labor for each job category.
Determining expected shortages and surpluses allows the organization
to plan how to address these challenges.
 
When forecasting demands for HR, you must also assess the challenges
that you will have in meeting your staffing need based on the external
environment. To determine external impacts, you may want to consider
some of the following factors:
How does the current economy affect our work and our ability to attract
new employees?
How do current technological or cultural shifts impact the way we work
and the skilled labour we require?
How is our community changing or expected to change in the near
future?
Third step
Third step
Gap analysis
Gap analysis
 
The Basic Elements
of Human Resource Planning
(
5
)
 
D
e
v
e
l
o
p
A
c
t
i
o
n
 
P
l
a
n
s
 
The next step is to determine the gap between where your organization
wants to be in the future and where you are now.
 
The gap analysis includes identifying the number of staff and the skills
and abilities required in the future in comparison to the current
situation.
 
You should also look at all your organization's HR management
practices to identify practices that could be improved or new
practices needed to support the organization's capacity to move
forward
 
Questions to be answered include:
What new jobs will we need?
What new skills will be required?
Do our present employees have the required
skills?
Are employees currently in positions that use their
strengths?
Do we have enough managers/supervisors?
Are current HR management practices adequate
for future needs?
Fourth Step
Fourth Step
Developing HR strategies to
Developing HR strategies to
support organizational
support organizational
strategies
strategies
 
There are many HR strategies for meeting the
labor surplus or shortage in the future.
             
Surplus
Surplus
Restructuring strategies
Hiring freeze
Layoffs
Transfer
Reduce work time
Reduce part-time
 
                     Shortage
                     Shortage
New Hires
Transfer
Training/Retrain
Overtime
Part-time
 
 
Restructuring strategies
This strategy includes:
1.
 Reducing staff either by termination or attrition:
Termination
Termination
 is the act of making a person leave a job.
Generally, there will be costs associated with this
approach depending on your employment agreements
.
 
 
Attrition
Attrition
: 
not replacing employees when they leave.
2.
Regrouping tasks to create well designed jobs:
It will mean that jobs performed in the organization will have
to be reorganized so that essential work of the departing
employee is covered.
3. Reorganizing work units to be more efficient.
 
 
 
 
Hiring freeze: 
an employer decides to stop hiring new
employees
Layoffs
 :the act of firing employees.
Transfer
: from department to other.
Reduce work time:
Sometimes existing workers may be willing to voluntarily reduce their
hours, especially if the situation is temporary. Job sharing may be another
option.
 
Reduce part-time
 
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Human Resource Planning is crucial for organizations to align their current workforce with future goals effectively. The process involves assessing current HR capacity, forecasting future requirements, conducting gap analysis, and developing strategies. Assessing skills inventory and performance evaluations are essential steps in assessing current HR capacity. Forecasting HR needs helps in identifying potential labor shortages or surpluses. Implementing strategic HR planning ensures organizations meet objectives and gain a competitive edge.


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  1. HRM and Development III - Planning

  2. The Process of Human Resource Planning Organizations need to do human resource planning so they can meet business objectives and gain a competitive advantage over competitors. Human resource planning compares the present state of the organization with its goals for the future Then identifies what changes it must make in its human resources to meet those goals

  3. The strategic HR planning process The strategic HR planning process has four steps: Assessing the current HR capacity Forecasting HR requirements Gap analysis Developing HR strategies to support organizational strategies

  4. First step Assessing the current HR capacity

  5. Assessing current HR capacity The first step in the strategic HR planning process is to assess the current HR capacity of the organization The knowledge, skills and abilities of your current staff need to be identified. This can be done by developing a skills inventory for each employee

  6. The skills inventory should go beyond the skills needed for the particular position. List all skills each employee has demonstrated. For example, recreational or volunteer activities may involve special skills that could be relevant to the organization. Education levels and certificates or additional training should also be included.

  7. An employee's performance assessment form can be reviewed to determine if the person is ready and willing to take on more responsibility and to look at the employee's current development plans.

  8. Second Step Forecasting HR requirements

  9. The next step is to forecast HR needs for the future based on the strategic goals of the organization HR Forecasting attempts to determine the supply and demand for various types of human resources, and to predict areas within the organization where there will be labor shortages or surpluses

  10. There are three major steps to forecasting: Forecasting the demand for labor Determining labor supply Determining labor surpluses and shortages

  11. Forecasting the demand for labor How many people need to be working and in what jobs to implement organizational strategies and attain organizational objectives. Usually an organization forecasts demand for specific job categories or skill areas. After identifying the relevant job categories or skills, the planner investigates the likely demand for each.

  12. The planner must forecast whether the need for people with the necessary skills and experience will increase or decrease. Constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year.

  13. Determining labor supplyPredicting Worker Flows and Availabilities Succession or Replacement Charts Who has been groomed/developed and is ready for promotion right NOW? Human Resource Information Systems (HRIS) An employee database that can be searched when vacancies occur. Transition Matrices (Markov Analysis) A chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period. It answers two questions: 1. Where did people in each job category go? 2. Personnel / Yield Ratios Where did people now in each job category come from? How much work will it take to recruit one new accountant?

  14. Determining Labor Surplus or Shortage Based on the forecasts for labor demand and supply, the planner can compare the figures to determine whether there will be a shortage or surplus of labor for each job category. Determining expected shortages and surpluses allows the organization to plan how to address these challenges.

  15. When forecasting demands for HR, you must also assess the challenges that you will have in meeting your staffing need based on the external environment. To determine external impacts, you may want to consider some of the following factors: How does the current economy affect our work and our ability to attract new employees? How do current technological or cultural shifts impact the way we work and the skilled labour we require? How is our community changing or expected to change in the near future?

  16. Third step Gap analysis

  17. The Basic Elements of Human Resource Planning (1) Forecast Labor Requirements (5) Develop Action Plans (4) Determine Gaps Compare (2) Forecast Labor Availabilities

  18. The next step is to determine the gap between where your organization wants to be in the future and where you are now. The gap analysis includes identifying the number of staff and the skills and abilities required in the future in comparison to the current situation.

  19. You should also look at all your organization's HR management practices to identify practices that could be improved or new practices needed to support the organization's capacity to move forward

  20. Questions to be answered include: What new jobs will we need? What new skills will be required? Do our present employees have the required skills? Are employees currently in positions that use their strengths? Do we have enough managers/supervisors? Are current HR management practices adequate for future needs?

  21. Fourth Step Developing HR strategies to support organizational strategies

  22. There are many HR strategies for meeting the labor surplus or shortage in the future. Surplus Shortage Restructuring strategies Hiring freeze Layoffs Transfer Reduce work time Reduce part-time New Hires Transfer Training/Retrain Overtime Part-time

  23. Restructuring strategies This strategy includes: 1. Reducing staff either by termination or attrition: Termination is the act of making a person leave a job. Generally, there will be costs associated with this approach depending on your employment agreements. Attrition: not replacing employees when they leave. 2. Regrouping tasks to create well designed jobs: It will mean that jobs performed in the organization will have to be reorganized so that essential work of the departing employee is covered. 3. Reorganizing work units to be more efficient.

  24. Hiring freeze: an employer decides to stop hiring new employees Layoffs :the act of firing employees. Transfer: from department to other. Reduce work time: Sometimes existing workers may be willing to voluntarily reduce their hours, especially if the situation is temporary. Job sharing may be another option. Reduce part-time

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