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Employee Resourcing – LLC 4124 UNIT 2 HUMAN RESOURCE PLANNING Unit Structure 2.0 Overview 2.1 Learning Outcomes 2.2 Introduction 2.3 Definition of Human Resource Planning 2.4 The Process of Human Resource Planning 2.5 Aims of Human Resource Planning 2.6 Forecasting Human Resource Requirement 2.6.1 Demand Forecasting 2.6.2 Supply Forecasting 2.6.3 Analysis 2.6.4 Action Plan 2.7 Cost 2.8 Human Resource Forecasting Techniques 2.8.1 Zero Based Forecasting 2.8.2 Bottom Up approach 2.8.3 Use of Mathematical Models 2.8.4 Simulation 2.9 Adapting Traditional Human Resource Planning 2.9.1 Contingency Planning 2.9.2 Succession Planning 2.9.3 Skills Planning 2.9.4 Soft Human Resource Planning 2.10 Summary Unit 2 1 Employee Resourcing – LLC 4124 2.0 OVERVIEW This Unit will give you an insight of the concepts of Human Resource Planning. The aims, process and forecasting techniques will be explained. 2.1 LEARNING OUTCOMES By the end of this Unit, you should be able to do the following: 1. Explain the concept of Human Resource Planning. 2. Critically discuss the process of Human Resource Planning. 3. State the aims of Human Resource Planning. 4. Explain the forecasting of Human Resource. 5. Describe the Human Resource Forecasting Techniques. 2.2 INTRODUCTION Organisations are presently operating in a rapidly changing and turbulent environment and managers have to optimise the use of the available employees in order to be competitive. Human Resource Planning (HRP) attempts to reconcile an organisation’s need for human resources with the available supply of labour. HRP also results in matching people to the job, that is, the right people doing the right thing. HRP can help management in making decisions in areas as hereunder: • Recruitment. • Avoidance of redundancies. • Training of staff. • Management development. Unit 2 2 Employee Resourcing – LLC 4124 • Estimates of costs. HRP needs continuous re-adjustment because the goals and objectives of an organisation are not stable due to uncertainties in the environment. Also, many independent variables are involved namely, consumer demand, new legislations, population changes, competition from rival firms and foreign competition. 2.3 DEFINITION OF HUMAN RESOURCE PLANNING Human Resource Planning refers to an attempt to estimate the numbers and kinds of employees the organisation will need in the future in order to realise its strategic goals and the extent to which the demand is likely to be met. According to Snell and Bohlander (2007:48), Human Resource Planning is “the process of anticipating and providing for the movement of people into, within and out of an organisation”. Nel et al (2008:216) maintains that HR Planning “ensures that a predetermined amount of employees with appropriate skills, knowledge and abilities are available at a specified time in the future ... HR planning therefore systematically identifies what is needed to be able to guarantee their availability”. 2.4 THE PROCESS OF HUMAN RESOURCE PLANNING Organisations engage in the process of Human Resource Planning (HRP) to determine the demand and supply of human resources so as to gain or maintain. In short, HRP is the process of identifying the HR needs and the ways of meeting those needs. Unit 2 3 Employee Resourcing – LLC 4124 It is important to note that needs are unlimited and scarce, therefore, the planning process is very much concerned with prioritising the needs. EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Strategic Planning Human Resource Planning Forecasting Human Comparing Requirements Forecasting Human Resource Requirements and Availability Resource Availability Demand = Supply Surplus of Workers Shortage of Workers Recruitment No Restricted Hiring, Reduced Hours, Early Retirement, Action Layoffs, Downsizing Selection Figure 1: The Human Resource Planning Process As we have seen above, the Human Resource Plan will depend on certain factors namely;  The Strategic Planning Strategic planning refers to the process of determining the overall organisational purposes and objectives and how these can be achieved through Human Resource Planning, which is the Unit 2 4 Employee Resourcing – LLC 4124 process of systematically reviewing human resource requirements to ensure that the required number of employees, with the required skills are available in the organisation.  Comparing requirement and availability This phase of the HR planning process involves matching the forecasted Human Resource (in terms of future requirements) with the existing HR (the available employees).  Determining the surplus or shortage of employees Once the assessment has been made, there is a need to determine whether the organisation has a shortage or surplus of employees or the demand is just equal to the supply. In case of a surplus in the number of employees, appropriate action should be taken, namely; restricted hiring/recruitment, reduced hours, early retirement, layoffs. In case of a shortage of employees, a proper recruitment and selection process is required to obtain the right quantity and quality of new employees.  The Internal and External Environment Conditions in the internal and external environment can change quickly and, hence, the human resource planning process must be continuous. Changing conditions may affect the entire organisation thereby requiring extensive modification of forecasts. HR planning enables managers to anticipate and prepare for changing conditions and also allows flexibility in the area of human resource management. Unit 2 5 Employee Resourcing – LLC 4124 Activity 1 (i) Explain your understanding of Human Resource Planning. (ii) What factors would you like to take into consideration while devising the HR plan in your organisation? Unit 2 6 Employee Resourcing – LLC 4124 2.5 AIMS OF HUMAN RESOURCE PLANNING Planning of Human Resources is very important as it enables the optimum use of the most valuable asset of an organisation in the attainment of its objectives and goals. The aims of HR planning has been summarised below:- • Attract and retain the right quantity and quality of employees (in term of qualification, knowledge, skills, expertise and attitude). • Optimising the use of the available HR (matching people with the job and adopting flexible systems of work). • Anticipation of potential problems of surpluses or deficits of employees (e.g., the world economic recession). • Develop a well trained and flexible workforce, making employees become multi-skilled and multifunctional. Thus, the organisation has a greater ability to adapt to the fast and constantly changing environment. It enhances the use of key skills within the organisation thus reducing the dependence on external recruitment and formulating retention HR development strategies. 2.6 FORECASTING HUMAN RESOURCE REQUIREMENTS 2.6.1 Demand Forecasting Demand forecasting is an estimate of the numbers and kinds of employees the organisation will need at future dates in order to realise its stated objectives. Unit 2 7 Employee Resourcing – LLC 4124 2.6.2 Supply Forecasting The determination of whether a firm is able to secure employees with the necessary skills, and from what sources. Before starting a new business, management study the demand side of human resources. It is equally important to study the supply side of HR as well, specially when very skilled workers are needed for the job. Supply forecasting measures the quantity and quality of employees likely to be available inside and outside the organisation after allowing for labour wastage, retirement, absenteeism, promotion and internal transfer. 2.6.3 Analysis The demand and supply forecasts are analysed to identify and surpluses or deficits. This analysis which provides the basis for recruitment, retention and, if unavoidable, downsizing plans, may be done by using specialised s
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