Resourcing strategy mpp 5


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Resourcing strategy mpp 5

  1. 1. Resourcing StrategyBy dr. desai.
  2. 2. Introduction: HRM re sourcing strategy is a process to obtain the right basis material in the form of a workforce endowed with the appropriate qualities, skills, knowledge & potential for future training. The selection & recruitment of workers best suited to meet the needs of the organization ought to form a core activity upon which most HRM policies geared towards development & motivation could be built.
  3. 3. Contd. The concept that the strategic capability of a firm depends on its resource capability in the shape of people provides the rationale for re sourcing strategy. The aim of this strategy is to ensure that a firm achieves competitive advantage by employing more capable people than its rivals.
  4. 4. Contd. These people will have a wider & deeper range of skills, & behave in ways that maximize their contribution. The organization attracts such people by being the employer of choice. It retains them by providing better opportunities & rewards than others & by developing a positive psychological contract which increases commitment & creates mutual trust.
  5. 5. Components of Re sourcing Strategy: Components/;1] Re sourcing plans2] Flexibility plans,3] Retention plans. Re sourcing strategy provides the basis for plans within the framework of business needs.
  6. 6. Scenario Planning: It is a formal strategic planning technique. It is also considered as an informal approach to thinking about the future in broad terms, based upon an analysis of likely changes in internal & external environment.
  7. 7. Contd. A scenario can be defined as an imagined sequence of future events. Scenario planning is a simple, more or less formalized process for establishing a view about any changes that can be foreseen to the scale & type of activities in the organization & to the structure, & for identifying any external environment changes that are likely to affect it.
  8. 8. Contd.The creation of a scenario involves making broadassessments of likely internal developments in thedirection in which the organization is going & theimplications this has on people requirements.The assessments may have to be made in theabsence of any articulated business plan, & thus seethe future, & asking them to interpret what this meansin terms of their HR needs.
  9. 9. Contd. Assessments also have to be made on likely changes in the external environment as it may affect the labor market.
  10. 10. Estimating future HRrequirements: Scenario planning is in some situations as far as it is possible to go in estimating future people requirements, but where it is feasible & appropriate, attempts can be made to produce demand & supply forecasts, & to determine what action needs to be taken if the forecasts indicate the possibility of a HR deficit or surplus.
  11. 11. Contd. Demand Forecasting: is the process of estimating the future numbers of people required & the likely skills & competences they will need. The ideal basis of the forecast is an annual budget & longer term business plan, translated into activity levels for each function & department, or decisions on downsizing. In a manufacturing company the sales budget would be translated into a manufacturing plan giving the numbers & types of products to be made in each period. From this information the number of hours to be worked by each skill category to make the quota for each period would be computed.
  12. 12. Contd. The demand forecasting techniques that can be used to produce quantitative estimates of future requirements are: Managerial/ expert judgment: is the most typical method of forecasting & may be linked to some form of scenario planning. It simply requires managers/specialists to sit down, think about future workloads, & decide how many people are needed. This is reliable only if reliable evidence is available of forecast increases in activity levels /new demands for skills.
  13. 13. Contd. Ratio trend analysis: Here the past ratio between the number of direct workers & indirect workers in a manufacturing plant, & forecasting future ratios, having made some allowance for changes in organization/ methods are studied. Activity level forecasts are then used to determine direct labor requirements & the forecasts ratio of indirect to direct is used to calculate the number of indirect workers needed.
  14. 14. Contd. Work study techniques: can be used when it is possible to apply work measurement to calculate how long operations should take & the number of people required. Work study techniques for direct workers can be combined with ratio trend analysis to calculate the number of indirect workers needed.
  15. 15. Contd. Forecasting skill & competence requirements: Forecasting skill requirements is largely a matter of managerial judgment. This judgment is exercised on the basis of a careful analysis of the impact of projected product market development & the introduction of new technology or computerized manufacturing.
  16. 16. Contd. Supply forecasting: it measures the number of people likely to be available from within & outside the organization having allowed for attrition[ labor wastages & retirements], absenteeism, internal movements & promotions, & changes in hours & other conditions of work.
  17. 17. Contd. The forecasting can be based on: an analysis of existing HR in terms of numbers in each occupation, skills & potential. forecast losses to existing resource thru’ attrition. forecasts changing to existing resources thru’ internal promotions. sources of supply from within the organization & from outside in the national & local labor markets.
  18. 18. Contd. Mathematical modeling techniques aided by computers can help in the preparation of supply forecasts in situations where comprehensive & reliable data on stocks can be provided. These methods are seldom used.
  19. 19. Analyzing demand & supplyforecasts: The demand & supply forecasts can then be analyzed to determine whether there are any deicits/ surpluses. This provides the basis for recruitment, retention & downsizing plans when needed. Computerized planning models can be used for this purpose. The basic forecasting calculations can be carried out on a spreadsheet that sets out & calculates the number required for each occupation where plans need to be made.
  20. 20. Contd. Example: No. currently employed 70 Annual wastage rate based on past records 10 %Expected losses during the year 7 Balance @the end of the year 63Number required@ the end ofthe year 75 Number to be obtained during the years [5-4] 12
  21. 21. Action Planning Action plans are derived from broad re sourcing strategies & more detailed analysis of demand & supply factors. These are short termed & flexible because of the difficulty of making firm predictions about HR requirements in times of rapid changes. Plans need to be prepared in the areas of re sourcing, flexibility & downsizing.
  22. 22. Contd. The re sourcing plan: this needs to consider approaches to obtain people from within the organization, to recruiting them externally, & to attract high quality candidates [ employer of choice]. Internal re sourcing: the first step is to analyze the availability of suitable people from within the organization by reference to assessments of potential & skills database . The latter should contain a regularly updated list of employees with the sort of skills needed by organization.
  23. 23. Contd. Decisions are then made on what steps should be taken to promote, redeploy, & as necessary, provide additional experience & training to eligible staff. Plans can also be made to make better use of existing employees, which may include flexibility arrangement.
  24. 24. Contd. The recruitment plan: this incorporates the numbers & types of employees required to make up any deficits, when they are needed. The likely sources of candidates- schools, colleges of further education, universities, advertising, the internet… Plans for tapping alternative sources such as part-timers or widening the recruitment net to include-more women re-entering the labor market.
  25. 25. Contd. Flexibility plan: should provide for greater operational flexibility, improve the utilization of employees ‘skills & capacities, reduce employment costs & help to achieve downsizing smoothly & in a way which avoids the need for compulsory redundacies.
  26. 26. Contd. Increase Productivity: the plan can be based on a radical look at traditional employment patterns. This means identifying the scope for using alternatives to full-time permanent staff, which could include increasing the number of part-timers, job- sharing the expansion of home-working/ tele-working or employing more temps. Consideration can also be given to make more use of sub-contractors /outsourcing work, & to the introduction of more flexible working arrangements.
  27. 27. Contd. Use of part-time workers: The advantages of using part-time workers: more scope for flexible hours worked, better utilization of plant & equipment by the introduction of a twilight shift, lower unit labor costs because overtime levels for full- time workers are reduced, higher productivity on repetitive work because part- time workers can give more attention to their work during their shorter working day.
  28. 28. Contd. Disadvantages: part-timers are generally less willing to undertake afternoon/ evening work, may find it more difficult to vary their hours of work, & may be less mobile, rates of labor turnover may be higher, commitment is less.
  29. 29. Contd. Job sharing: is an arrangement whereby two employees share the work of one full-time position, dividing pay & benefits between them according to the work done by each. Job sharing can involve splitting days/weeks or they may work alternate weeks. The advantage is , it reduces employee turnover & absenteeism because it suits the needs of the individuals. There is greater continuity in work schedule. Also, it generates more employment. The disadvantages are the administrative costs involved are high & the risk of the responsibility is divided.
  30. 30. Contd. Home- working/ tele-working: Home based employees can be employed in jobs like consultants, analysts, designers, programmers or various administrative work. Advantages :flexibility to respond to fluctuations in demands, reduced overheads, lower employment costs if the home-workers are self- employed.
  31. 31. Contd. Tele-working involves people working at home with a terminal which is linked to the main company or networked with other outworkers. Its aim is to achieve greater flexibility, rapid access to skills & the retention of skilled employees who would otherwise be lost to the company. Tele-workers can be used in a number of functions such as marketing, finance & IT.
  32. 32. Contd. Sub-contracting: it enables resources to be concentrated on core business activities, employment costs are reduced, flexibility & productivity can be increased, job security for core employees can be enhanced. The disadvantages are the legal status of the employees, negative reactions from employees & unions who prefer work to be kept within the company.
  33. 33. Contd. The down–sizing plan: If there is decline in business, if nothing works, then it may be necessary to deal with unacceptable employment costs or surplus numbers of employees,. This is downsizing. This plan should be based on the timing of reductions & forecasts of the extent to which these can be achieved by natural wastage or voluntary redundancy.
  34. 34. Contd. The plan: the total no. of people who have to go, & when & where this needs to take place, arrangements for informing & consulting with employees & their trade unions, a forecast of the number of losses that can be taken up by natural wastage,any financial or other inducements to encourage voluntary redundancy, a forecast of the likely numbers who will want to leave, a forecast of the balance of employees, who will have to be made redundant.
  35. 35. Contd. The redundancy terms: any arrangements for retraining employees & finding them work elsewhere in the organization. This can be done by counseling, contacting other employers or offering the services of outplacement consultants.
  36. 36. The contribution of HR todevelop the ResourceCapability: HRP, in the broader meaning of the term, is one of the fundamental strategic roles of the HR function. HR can make a major contribution to developing the resource capability of the firm & therefore its strategic capability by systematically reviewing the firm’s strategic objectives & by ensuring that plans are made that will ensure that the HR are available to meet those objectives.