STRATEGIC HUMAN RESOURCE MANAGEMENT

PRESENTATION ONHUMAN RESOURCE PLANNING

GROUP I

BETTY MATHEW SHRADHA GARG VISHAL VATS PREMLATA TUTI DAKSH AGRAWAL ASHUTOSH SHARMA NEHA MARWAH MANSI SHARMA RAVI ROSHAN DUNGDUNG JUDE SINGH PREETI ABHILASHA MINZ ANKITA KEVIN NATAL PARIMAL PARAG

GROUP MEMBERS

INTRODUCTION

Human Resource Planning is the process of forecasting a firm’s future demand for, and supply of, the right type of people in the right number.

HRP is the process by which management determines how the organization should move from its current manpower position to its desired manpower position.

ACTIVITIES REQUIRED FOR HRP

Manpower planning consists of a series of activities:

• Forecasting future manpower requirements• Preparing an inventory of present manpower• Anticipating problems of manpower• Meeting manpower requirements

FACTORS AFFECTING HRP

HRP

Organizational growth cycles and planning.

Environmental

uncertainties

OutsourcingType and

strategy of organization

Labor marketTime horizons

Prevent Overstaffing and Understaffing Ensure the organization has the right

employees with the right skills in the right place at the right times.

Ensure the organization is responsive to changes in its environment.

Provide direction and coherence to all HR activities and systems.

Unite the perspectives of line and staff managers

Key Objectives of HRP

OBJECTIVES OF HRP

MACRO HRPMICRO HRP

To forecast economic and business environment

To estimate future demand of numbers and types of skills by various industries

To ensure more effective utilization of HR

To make labor supply projections for the future

To ensure effective labor supply to different industries through activities such as interacting with educational institutions.

To prevent overstaffing and understaffing

To ensure employee availability

To ensure that the firm is responsive to the environment

To provide direction to al HR activities

To build line and staff partnerships

STRATEGIC MANPOWER PLANNING

It Assists Human Resource Managers to Strategies Development Plans.

Its Importance.

It captures different talent pools.

It captures career plans and grooms right number of individuals.

STRATEGIC MANPOWER PLANNING

HRP and the Changing Environment

Factors that enhance significance of HRP

Significance of HRP

Growth of

services economy

Technological

Advancement

Knowledge

economy and

knowledge workers

Increase in

Productivity

Labour Market

changes

Government

Legislations and

Regulations

Competitive Business Environme

nt

Pressure to increase revenue and cut down costs.

Firms starting to become lean. Poaching increasingly challenges employee

retention. Increased attrition and employee turnover

in industries. E.g. Increased contractual or part time

hiring.

1. Competitive Business Environment

Jobs increasing in service sector than in manufacturing.

For e.g. shifting focus from production, chemical or civil industry to IT, Telecom or banking.

Shift of focus from Employee skills to employee competency and talent.

Occupational shift from manufacturing sector to knowledge sector.

2. Manufacturing Economy to Service Economy

Technologies are rapidly changing and so are their production processes and other supporting functions.

Result is changing job specifications and descriptions.

Increased need to recruit suitable human resource at the right time.

3. Technological Advancements

4. Knowledge Economy and KnowledgeWorkers

• Several industrial sectors including manufacturing , are becoming knowledge and skill intensive, with new innovation resulting in quality improvements and cost reductions.• The numbers of jobs in manual and skilled categories are going down in the knowledge economy.

Competition has contributed to rising productivity. Labour productivity in Indian industries has increased steadily since the mid –nineties and number of workers has been declining steadily.

5. Productivity Increases:

The transformation of the labour market in recent years is another factor that has implications for HRP.

A labour market is a geographical region where the supply and demand of labour interact.

6. Labour Market Changes

Government policies and regulations relating to employment influence HRP.

Affirmative action requires firms to hire women, members of minority groups, and disabled people. The reservation of jobs and seats in educational institutions limits both supply and demand.

7. Government Legislations and Regulations

Strategic Planning

Human Resource Planning

Comparing Requiremen

ts and Availability

Forecasting Human

Resource Requirement

s

Forecasting Human

Resource Availability

Demand = Supply

Surplus of workers

Shortage of workers

No Action Restricted hiring,

Reduced hours, Early retirement,

layoff, downsizing

Recruitment

Selection

Internal Environment

External Environment

Estimating the future quantity & quality of people required. The basis of forecast depends upon the sales plan & the annual budget.

HR demand forecasting considers 2 factors:◦ Internal ◦ external

HR Demand forecasting

o Demand forecasting helps in :a) Quantifying the jobs necessary for producing a

given number of goods & providing necessary services.

b) It helps to determine what staff mix is desirable in future.

c) Assess appropriate staffing levels to avoid unnecessary cost.

d) Prevent shortages of people where & when they are needed most.

e) Helps the company to monitor legal compliance with regard to reservation of jobs.

HR Demand forecasting

• Qualitative methodsa) Estimation-people in position estimate the number of people

the firm will require in the next year.b) Expert opinion-panel of experts forecast HR requirements for

particular future business scenarios. Delphi-experts go through several rounds of estimates. No

face-face meetings. Group brain storming-face-to-face discussion based on

multiple assumptions about future business direction. Nominal group technique-face-to-face discussion Simple averaging-simple averaging of viewpointsc) Sales force estimates-used when new products are

introduced by a firm. Sales personnel estimates the number of employees needed based on their estimate of demand of product.

Demand forecasting techniques

• Quantitative methods. Trend analysis and projection-based on past relationship

between a business factor related to employment and employment level itself

a) Simple long run trend analysis-extrapolates past relationship between volume of business activity and the employment levels into the future.

b) Regression analysis-regresses employment needs onto key variables.

Simulation models-uses probabilities of future events to estimate future employment levels

Workload analysis-based on actual content of work Markov analysis-probabilistic based on past relationship

between business factor related to employment and employment level itself.

Demand forecasting techniques

Supply forecasting – measures the number of people likely to be available from within & outside the organization.

Reasons for supply forecasting:• Helps to quantify number of people & positions expected

to be available in future to help the organization realize its plans

• Helps to clarify staff mixes that will exist in the future.• Prevents shortage of people where & when they are most

needed.• Assess existing staffing levels in different parts of the

organization.• Monitors expected future compliance with legal

requirements of job reservations.

HR Supply Forecasting

Supply forecasting can be done through :Existing human resources Internal sources External sources

HR Supply forecasting

Present employees- Analysis is facilitated by HR Audits. The audits of non managers are called skill inventories & those of the management are called management inventories.

With technological advancements HR inventories have become computerized. The Human Resource Information System(HRIS) is a computerized inventory.

Supply Forecasting Techniques

Name : A.K . Sen Date printed : 1-4-2004

Number : 429 D epartm ent : 41

K ey w o rds W ork ex pe rienc e

W ord D escr ip tion Activ ity F ro m To

Accounting Tax Supervision 1998 2000 Tax clerk ABC Company

and analysis

Book Keeping Ledger Supervision 2000 2002 Accoun tan t XYZ Co.

Auditing Computer Analys is 2002 2003 C hief Accounts TT Bank

reco rds O ff ice r

Education Special Qualifications M e m b e r s h ip s

Degree Major Yea r Course Date 1. AIMA

MBA Finance 1998 DBF 1996 2. ISTD

B.Com A ccoun ts 1995 Risk Management 1999 3. ICA

C o m p u te r La ng uag es P os it ion Loca t ion H obb ies

L ite racy p r e fe r e n c e cho ice

Tally French Accounting Kolkata Chess

Banking Auditing Delhi Football

Software Bangalore Boating

Employees Signature __________ HR Department________

Date _______________________ Date ________________

Skills inventory: an example

Turnover rate- number of separations during the year/ average number of employees during the year*100

Condition of work & absenteeism- Number of persons – days lost *

100 avg no. of persons * no. of working days Productivity level Movement among jobs Inflows & outflows- Determination of the

number of losses & gains is made.

Techniques for Internal Supply

The FirmSources of In flows

Transfe rs

Promotions

New Recruits

Recalls

Promotions

Quits

Terminations

Retirements

Deaths

Layoffs

Employees In Employees Out

Currents ta ffinglevel

Projectedou tf low sthis year

Projectedin f low sthis year

Firm’s internalsupply for thistime next year

– + =

Projected Outflows

Current S taffingLevel

Estimated Internal Labour Supply for a given firm

External hires need to be contacted when suitable internal replacements are not available. A growing number of firms are now using computerized Human Resource Information Systems to track the qualifications of hundreds or thousands of employees.

Several agencies make projections of external labor market conditions & estimates of the supply of labor to be available in different skill categories.

The Institute of Applied Manpower Research(IAMR) publishes the Manpower Profile- India Yearbook.

External supply

STRATEGIC HUMAN RESOURCE IMPLEMENTATION

Why 80- 90% organizations fail to achieve their organizational long term objectives ?Ans. Wrong implementation of strategies.

STRATEGIC HUMAN RESOURCE IMPLEMENTATION

MANAGING SHORTAGES MANAGING SURPLUS

Recruit new permanent employees

Rehire retirees part time

Work current staff overtime

Subcontract work out Hire temporary

employees Redesign Job

processes so that fewer employees are needed.

Hiring Freezes Do not replace those

who leave Offer early retirement

incentives Reduce work hours

layoffs Reduce outsourced

work Employee Training Expand Operations

Link between Business Strategy and HRP

Business Strategy is the determination of the long term goals and objectives of an organization, and allocation of resources necessary for carrying out these goals.

HR strategy should be aligned to business strategy to bring about competitive advantage for the firm. The attributes, motivation, development, priorities and performance should directly support the company’s strategic goals. It can be done by:

People recognized as critical to business Strategic Human Capital Management such as

innovative approaches to every link in the HR Value Chain- Recruitment, Development, Motivation, Performance Management and Reward.

Prepare business and its people to meet future demand for talent and competition for best human resource.

Business Strategy Focus

HR Strategy HRP Activities

Cost Leadership • Cost Control• Stable Business Environment• Efficiency and Quality

• Job and Employee specializations• Employee efficiency• Long HR planning horizon

• Internal Promotions• Emphasis on Training • Hiring and Training for specific capabilities

Differentiation• Long term focus• Growth• Creative Job behavior• Decentralization

• Shorter HR Planning Horizon• Hire the HR capabilities required • Flexible jobs and employees

• External Staffing• Hire and Train for broad competencies

Classification by Porter(1985)

Business Strategy HR Strategy HRP

Defender• Finds change threatening • Favors strategies which encourage continuity and security

• Bureaucratic Approach• Planned and regularly maintained policies to provide for lean HR

• Build HR• Likely to emphasize Training Programs and Promotion

Prospector• Thrives on change• Favors Strategies of product and/or market development

• Creative and flexible management style• Have high quality HR• Emphasize redeployment and flexibility of HR• Little opportunity for long term HRP

• Acquire HR • Likely to emphasize recruitment, selection and performance based compensation

Analyser• Seeks to match new ventures with the present business set-up• Launches ventures new to the firm but not new to the market

• Emphasize HR planning

• ‘Buy’ as well as ‘make’ key human resources

Classification by Miles and Snow (1984)

Involves identifying key management positions that the organization cannot afford to have vacant.

PURPOSE

Facilitates transition when an employee leaves.

Identifies development needs of high potential employees and assists with their career planning

.

SUCCESSION PLANNING

Identify key positions and possible successors for each of these positions . For Example :-

Replacement Chart

J. Smith V.P Marketing

R.Jones Sales Director

Ready now

C.Williams Productions Manager

15 months

S. Anderson Director Marketing

Research1 year

1. To ensure that key positions remain filled.

2. To identify critical training and development needs of both individual managers and the organization as a whole .

Succession planning helps

Disadvantages Advantages

Do not tell

Tell

Pros and Cons of Disclosing Succession Planning

High performers may leave the organization , unsure of their future.

Allows flexibility as business needs change

Unrealistic expectations and implied contracts

Retention Strategy

It is a part of planning process which anticipate the need for groups of employees in specific , usually lower level jobs( for ex., number of customer service representatives needed) and the general skills employees need to ensure sustained high performance.

Aggregate planning

Forecasting the demand for employees

i. Unit forecasting ( Bottom up planning)

ii. Top down forecasting

Plan for an adequate supply of employees to meet the current demand.

Steps involved

In unit forecasting ,each individual unit, department, or branch of the organization estimates its future needs of the employees. For example, each branch of a bank might prepare its own forecast based on the goals and objectives each branch manager has for the particular office. These estimates are then presented to subsequent layers of the management, who combine and sum the totals and present them to senior management for approval. This technique has the potential for being the most responsive to the needs of the marketplace because it places responsibility for estimating employees needs at the “point of contact” in service provision or product production.

Unit Forecasting

This involves senior managers allocating a budgeted amount for employees payroll expenditures and then dividing the pool at subsequent levels down the hierarchy. Each manager receives budget from her/his supervisor and then decides how to allocate these funds down to the next group of managers, this technique is similar to sales and profit plans in many organization whereby each unit is assigned a budgeted amount and then required to make decisions on developing those resources in the manner most consistent with business objectives. Although this technique may be efficient , as senior management allocates HR costs within a strict organization wise budget, there is no guarantee that it will be responsive to the needs of the market place, Allocations are based solely on what organization can afford, without regard to input concerning demand and market place.

Top down forecasting

Markov Analysis – It describes the probability of employees staying with the job category, moving to another job, or leaving the organization over a given period usually one year. It uses a transition probability matrix that is established based on historical trends of mobility.

For example, we will assume that there are three job classifications in the restaurant: servers, hosts and buspersons.

Estimating the existing supply of human resource

One year from Now Servers Hosts Buspersons Exits Servers .80 .10 0 .10

Current year Hosts .10 .70 0 .20

Buspersons .15 .05 .40 .40

Analysis of Matrix Retention levels Servers 80%

Hosts 70%

Buspersons 40%

Forecasting levels Incumbents Servers Hosts Buspersons Exits 60 Servers 48 6 6 10 Hosts 1 7 2 20 Buspersons 3 1 8 8

Totals 52 14 8 16

Transition probability matrix for a restaurant

• OUTSOURCING – Serves as a source of HR for a firm.

• Serves as a way for filling the gaps that exist in the HR plan, or shortage in the workforce

• Decision may be driven by business objectives

CHALLENGES IN HRP

There are 4 stages of the outsourcing process1. Analysis and Evaluation2. Contracting and Negotiation3. Initiation and Transition4. Stabilization and maintenance of

outsourced relationship

OUTSOURCING PROCESS

Stage 1 – Analysis and EvaluationRetain HR talentDo not outsource HRPConsider alternatives to outsourcing Stage 2 – Contracting and NegotiationEvaluate Vendor organizationDesign internal organization

OUTSOURCING PROCESS – DETAIL

Stage 3 – Transition Employ a phased approach to transition Build a transition team Stage 4 – Stabilization and Improvement Build in continuous improvement and

flexibility at the vendor

Contd……

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