Human Resources PlanningProcessDr Sorab Sadri and Prof. JayashreeSadri
The Process of Human Resource Planning• Organizations need to do human resourceplanning so they can meet business objectivesand gain a competitive advantage overcompetitors.– Human resource planning compares the present stateof the organization with its goals for the future– Then identifies what changes it must make in itshuman resources to meet those goals
Overview of the Human Resource PlanningProcess
Human Resource Forecasting• HR Forecasting attemptsto determine the supplyand demand for varioustypes of human resources,and to predict areaswithin the organizationwhere there will be laborshortages or surpluses.There are three majorsteps to forecasting:1. Forecasting the demandfor labor2. Determining laborsupply3. Determining laborsurpluses and shortages
HUMAN RESOURCE PLANNINGFORECASTING HR REQUIREMENTS (DEMAND ANALYSIS)(Trying to predict future staffing needs)Managerial EstimatesSales ProjectionsSimulationsVacancy Analysis (projected turnover)FORECASTING HR AVAILABILITY (SUPPLY ANALYSIS)(Predicting worker flows and availabilities)Succession or Replacement ChartsSkills Inventories (use of HRIS)Labor Market AnalysisMarkov Analysis (Transition Matrix)Personnel Ratios
Forecasting the Demand for LaborTrend Analysis• Constructing and applying statistical models that predictlabor demand for the next year, given relatively objectivestatistics from the previous year.Leading Indicators• Objective measures that accurately predict future labordemand.
CORRELATIONS/PROJECTIONSSIZE OF HOSPITAL NUMBER OF NURSES200 240300 260400 470500 500600 620700 660800 820900 860
SIMULATION MODEL/REGRESSION FORECASTTARGET STORES STAFFING FORECASTMODELY = 8 + .0011(X1) + .00004(X2) + .02(X3)Y = Number of employees needed to staff the storeX1 = Square feet of sales spaceX2 = Population of metropolitan areaX3 = Projected annual disposable income in millions of dollarsY = 8 + .0011(50,000sq ft) + .00004(150,000popul) + .00000002($850 million)Y = 8 + 55 + 6 + 17Y = 86 employees needed at this store
Determining Labor SupplyPredicting Worker Flows and Availabilities• Succession or Replacement ChartsWho has been groomed/developed and is ready for promotion right NOW?• Human Resource Information Systems (HRIS)An employee database that can be searched when vacancies occur.• Transition Matrices (Markov Analysis)A chart that lists job categories held in one period and shows the proportion ofemployees in each of those job categories in a future period.It answers two questions:1. “Where did people in each job category go?”2. “Where did people now in each job category come from?• Personnel / Yield RatiosHow much work will it take to recruit one new accountant?
HUMAN RESOURCE INFORMATION SYSTEMS(HRIS)PERSONAL DATAAge, Gender, Dependents, Marital status, etcEDUCATION & SKILLSDegrees earned, Licenses, CertificationsLanguages spoken, Specialty skillsAbility/knowledge to operate specific machines/equipment/softwareJOB HISTORYJob Titles held, Location in Company, Time in each position, etc.Performance appraisals, Promotions received, Training & DevelopmentMEMBERSHIPS & ACHIEVEMENTSProfessional Associations, Recognition and Notable accomplishmentsPREFERENCES & INTERESTSCareer goals, Types of positions soughtGeographic preferencesCAPACITY FOR GROWTHPotential for advancement, upward mobility and growth in the company
Transition MatrixExample for an Auto Parts Manufacturer
Determining Labor Surplus or Shortage• Based on the forecasts for labor demand andsupply, the planner can compare the figures todetermine whether there will be a shortage orsurplus of labor for each job category.• Determining expected shortages and surplusesallows the organization to plan how to addressthese challenges.
PERSONNEL / YIELD RATIOSPast experience has developed these yield ratios for recruiting a Cost Accountant:FOR EVERY 12 APPLICATIONS RECEIVED, ONLY 1 LOOKSPROMISING ENOUGH TO INVITE FOR AN INTERVIEWOF EVERY 5 PERSONS INTERVIEWED, ONLY 1 IS ACTUALLYOFFERED A POSITION IN THE ORGANIZATIONOF EVERY 3 JOB OFFERS MADE, ONLY 2 ACCEPT THE POSITIONOF EVERY 10 NEW WORKERS WHO BEGIN THE TRAININGPROGRAM, ONLY 9 SUCCESSFULLY COMPLETE THE PROGRAMTHUS: 100 APPLICATIONS MUST BE RECEIVED, so that8.33 JOB INTERVIEWS CAN BE HELD, so that1.67 JOB OFFERS CAN BE MADE, and1.11 PEOPLE MUST BE TRAINED, so that we getONE NEW COST ACCOUNTANT!!!