Chapter 5 Human Resources Planning

Topics: Supply and demand, Forecasting, Employment Pages: 9 (2706 words) Published: May 17, 2015
Chapter 5 – Human Resources Planning

THE STRATEGIC IMPORTANCE OF HUMAN RESOURCES PLANNING
Human Resources Planning (HRP): forecasting future human resources requirements to ensure that the organization will have the required # of employees with necessary skills to meet its strategic objectives  proactive process that anticipates/influences future by forecasting demand /supply of workers under changing conditions Helps achieve strategic goals/objectives, achieves economies in hiring, make major labour market demands, anticipate& avoid labor shortages and surpluses, control/reduce labour costs Has become as key strategic priority for HR department and for strategic business planners Existing labour shortage in Canada is forecast to increase to 1 million workers over the next 15 years Canada is in the beginning stages of a major labour shortage (baby boomers retiring too fast) Lack of HRP can result in

1) high costs when unstaffed positions create inefficiencies and severance pay for workers being fired 2) one department lays off workers while another is hiring workers with similar skills  reduce morale and productivity  turnover 3) greater concern is that ineffective HRP can lead to an organizations inability to accomplish short-term operational plans or long-term strategic plans. The key steps in the HRP process include analyzing forecasted labour supply, forecasting labour demand, and then planning & implementing HR programs to balance supply and demand:

The Relationship between HRP and Strategic Planning
HRP must align with the overall goals of the organization& LT/ST strategic plans set by the org. Failure to integrate HRP and strategic planning can have very serious consequences.

The Importance of Environmental Scanning
Environmental scanning: assessing factors that affect the external labour market (external factors) as well as an organization’s ability to find and secure talent from outside of the organization. Critical component of HRP and strategic planning process.

External factors most frequently monitored include:
1) Economic conditions: low unemployment means organization must be more aggressive in recruiting 2) Market and competitive trends: compensation policies that lag behind competitors’ may result in higher turnover or more difficulties in attracting talent 3) New or revised laws and decisions of courts: raise in min. wage can inflate cost of labour 4) Social concerns (healthcare, childcare): trend toward securing higher education can reduce the size of available external workforce in the SR (but good in the LR because of specialized training) 5) Technological changes affecting processes, product and people 6) Demographic trends of an internal& external labour force: may lower diversity based on area.

Steps in HRP
Before embarking on an HR planning exercise, current HR levels must be assessed  understanding the internal labour force in the present = basis for many demand/supply estimates Numerous sources of info for identifying existing talent in an organization. Organization chart (macro level info) can provide planners with an understanding of the org structure, business units, career paths  then, micro level info: how many workers the company currently has at each level, what existing skill sets the employees have, demographic info, etc. Org. must forecast future HR demand (# workers and skill sets needed) and forecast HR supply (internal availability of workers)  then, identify potential labour imbalance issues  leads to development & implementation of plans to balance HR

FORECASTING THE AVAILABILITY OF CANDIDATES (SUPPLY)
How will projected job openings be filled? Two sources of supply: 1) Internal: present employees who can be trained/transferred/promoted to meet anticipated needs 2) External: people in the labour market not currently working for the organization External factors can create challenges during recruitment of candidates (ex: literacy levels...
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