Human Resource Management 1

HR Planning

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HR Planning Learning
By the end of this unit you should be able to:
1. Define HR planning and explain its purpose
2. Describe the HR Planning process namely;
Stocktaking, Forecasting, Planning and
Implementing
3. Define and calculate labour turnover and explain
its relevance to HR planning
4. Define and calculate absenteeism and explain its
relevance to HR planning
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General Comments on HR Planning
Key aspect of HR
Should link Business Strategy and HR
Arguments for and against HRP
Use of computers
Started in the 60s as Manpower Planning
Manpower Planning versus HR Planning
HR Planning varies greatly across
companies
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of HR Planning?
The process by which an organisation ensures that
it has the right number and kinds of people, at
the right place, at the right time, and capable of
effectively & efficiently completing those tasks
that will help the organisation achieve its overall
strategic objectives
Human Resource Management, DeCenzo & Robbins, 1999
Forecasting the HR needs and
planning the steps necessary to meet them
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Aims of HR Planning
1. Obtain & retain the
quantity and quality of
manpower needed
2. Make the best use of
manpower resources
3. Anticipate potential
surpluses/deficits
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Why is it important for an organisation
to conduct HR Planning?
1. ..
2. ..
3. ..
4. ..
Marchington & Wilkinson, Core Personnel & Development 2000
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Benefits of HR Planning
1. Reduced costs
2. Improved planning of employee
development
3. Improved business planning
4. Equality improvements
5. Promotion of HR planning
6. Useful tool for measuring HR success
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Human Resource Management, De Cenzo & Robbins1999
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HR Planning Process
1. Stocktaking / Analysing
2. Forecasting
3. Planning
4. Implementation
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Personnel & HR Management, Gunnigle et al, 1997
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Stocktaking Internal; HR
Workforce profile (age, experience, skills, ability)
Age, experience, qualifications inventory
Skills inventory
Personnel replacement charts
Training and development plans
Performance reviews
Job analysis (what skills,knowledge, abilities are required)
Job descriptions
Skill audit


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Forecasting
Demand Forecasting
How many employees will be required for the
future

Supply Forecasting
Where future employees are going to be found
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Demand Forecasting
INTERNAL
organisational objectives
operational plans
product demand
technology and administrative changes
Capital investment plans
Managerial judgement
EXTERNAL
economic climate, legislation, flexibility
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Supply Forecasting
Classify manpower
resources/Age analysis
Labour
turnover/Wastage
analysis
Promotions/Transfers
Changes in
hours/patterns of work
Absence analysis
Sources of supply
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Wastage analysis
Measuring turnover
number of employees who leave in one year x 100
average number employed in the past year

Labour Stability Index
number of employees with more than one years service x
100
total number employed one year ago
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Personnel & HR Management, Gunnigle et al, 1997
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Personnel & HR Management, Gunnigle et al, 1997
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How to calculate absenteeism
Total absence (days/hours) in a particular period x 100
Total possible time (day/hours)

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Exercise: Age Analysis
1. What do we mean by age analysis?
2. Why would you conduct an age analysis?
3. What are the following statements saying about age in
the organisation
This organisation has a mature age profile
This organisation has a middle age profile
This organisation has a young age profile
4. List some advantages and disadvantages of each the
above profiles?

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Sources of External Supply
In establishing the sources of external labour supply
one needs to be mindful of the following:
Unemployment levels
Employment trends
Local market conditions
Occupational market conditions
Legislation e.g. equality,
Social Partnership
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Sources of supply - Local
Level of unemployment
Open & closure of new workplaces
Nos. and qualifications of school and
college leavers
Housing & transport developments
Employer reputation
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Exercise: Supply of labour local to organisations
List factors that influence the supply of employees in the area
LOCAL to an organisation?

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Stage 3: Planning


By going through stages 1,2,3 an organisation
establishes whether it is going to have a
labour shortage or surplus. From this it will
then need to PLAN how it is going to
address this shortage or surplus. This is
called the planning stage.

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Exercise: Planning


List actions that an organisation can take if it identifies that it
will have a labour SHORTAGE
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Exercise: Planning


List actions that an organisation can take if it identifies that it
will have a labour SURPLUS
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Stage 4: Implementation
The implmentation stage involves
Putting the plan into action, setting the
cycle set in motion
Monitoring, Reviewing, Altering and
Evaluating that Plan regularly.

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But do organisations conduct HR Planning in
Practice?
U.K.: Cowling & Waters(1990)
IPD survey, late 80s
Major uses of HRP were for
Identifying t&d needs
Analysing labour costs & productivity
Assessing need for structural change
HR Planning takes place on Ad hoc basis
Public Sector is behind the Private Sector
Kinnie & Arthurs (1993)
of organisations had computer systems, 1/3 using
them for strategic purposes
Marchington & Wilkinson, Core Personnel & Development 2000

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HR Planning in Practice cont..
U.S.A. Greer, Jackson & Fiorito (1989)
USA is not much better than the UK
137 organisations in mid 80s
Qualitative techniques (such as replacement charts, personnel
inventories, supervisor estimates)are more common than
quantitative techniques
Major uses of HR planning include; career planning, hrd,
affirmative action, avoiding shortages of key personnel
Huselid (1993)
Use of HR planning varies a great deal
Employers most likely to use HRP are large, r&d intensive orgs
with sophisticated planning systems and HR managers who are
actively involved at a strategic level
Marchington & Wilkinson, Core Personnel & Development 2000

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Why do so few organisations avoid HR
planning?
1. Models & techniques not really rooted in the
real world
2. Data is not held in user friendly form
3. The is no clear links between HR & Business
plans
4. Senior Line Managers have little interest in or
commitment to HR planning

Marchington & Wilkinson, Core Personnel & Development 2000

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Summary
HR Planning has a long way to go
HR Planning is not a substitute for
managerial judgement but an aid to decision
making
Changing nature of organisations is going to
influence HR Planning
Extra Reading all in Moodle!
Chapter 5 (pg 92 103) in core text book
CIPD Factsheet: Absence Management
CIPD Factsheet: Employee Turnover
Crown Hotel HR Planning Exercise
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Sample exam questions
1. Describe the four stages in the HR planning process.
2. Describe 3 actions you could take to fill a labour shortage in a
company?
3. Describe 3 actions you could take to resolve a labour surplus in a
company?
4. Why is it important to know what the organisation mission and
objectives are before you commence HR planning?
5. Explain the term labour turnover. Discuss the reasons why
employees leave organisations. Discuss the actions organisations
can take to improve employee retention.
6. According to the CIPD (2004) employee turnover is much higher in
retailing, hotels & restaurants & call centres than among civil
servants, fire fighter and the police. Discuss at least three
reasons why this is so and describe at least 5 actions that
organisations with unacceptably high turnover may take to reduce
attrition rates
7. Imagine that you have just been given the task of devising a human
resource plan for Next clothing retail in Sligo. What information
would you need in order to put this plan together.

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