Internal Planning Factors
These are the factors that relate to what is already happening inside the business. This includes how the organisation is changing to cope with new methods of working or new demands made on it, such as the introduction of technology or new products or services. It is also a way of considering the new skills that will be needed in the future and those that the existing staffs already have. The gap between the skills already present and those that are needed can be measured.
Organisational needs - The workforce needs to be able to adapt to changes. Demand for products and services will affect the number of people needed in certain roles. Businesses can look to move into new markets - this could mean abroad and staff needing new skills such as languages. More staff may be needed in distribution if the business grows. Technological change can also affect the internal working arrangements - machinery leads to redundancies, new training may be needed etc. (Internet shopping and self-scan checkouts) Outsourcing production to cheaper countries.
Skills requirements - Assessing the skills of the current workforce is an essential part of human resources planning as it enables a business to build up a profile of the training, experience and qualifications that employees already have. This is very important whether the business is capital intensive or labour intensive. As the nature and type of work changes within an organisation, so do the skills requirements. An organisation must measure the skills levels of its workforce in order to plan for the future - appraisals, awards, certificates etc. Workforce profiles - This means that a manager can view and monitor the types of employee working for the business. They usually include details such as age, gender, ethnicity and availability. Knowing ages can help you plan for the future and also ensures that you fulfill any legislation requirements. Large gaps in ages can cause problems so this allows you to combat this. Profiling the qualifications and training of your workforce allows a business to make use of any special skills staff members have. Planning Factors
External Planning Factors
These are the factors that influence the business from outside its direct control.
Supply of labour - What are the trends of the area the business is in? Is there any particular type of trade in that area? Nationally, the supply of labour is dependent on trends in unemployment and the types of skills that are needed by employers. What is the effect of Britain's membership of the EU?
Labour costs - The cost of labour, as a percentage of the other costs within a business, will depend on whether the business is capital or labour intensive, as well as the extent to which the skills needed by that organisation are available and accessible. In the UK, labour costs are also governed by the national minimum wage.
Workforce skills - Using published national statistics, organisations can see the types of skills that are available in their local area or region. Businesses need to consider their future needs and those of their competitors in order to make sure they attract the right people - this may mean extra incentives being offered.
Government policy - Government policy and changes to education policies can lead to gaps in skills, or gaps in skills being addressed.
Labour market competition - As a business plans its workforce needs for the future, so do other businesses within the same industry. There may not be enough skilled employees for each business, so you may need to offer more money to attract the right staff, however, you need to manage your funds well to make a profit.
Changing nature of work - 'A job for life' used to be a standard idea in the workplace, but now employees need a wider range of skills and be willing to change employer and job role in order to stay in work. Overnight working, flexible working hours and working...
References: 1. Resources at Humanresourcesabout.com (2012) Available at: http://humanresources.about.com/od/glossaryh/f/hr_management.htm (Accessed: 05/03/2013).
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