Course Title: Human resources planning

Lecturer: Mr. Akum Oben T.

Introduction

Human resource management can be defined as a system of activities and strategies that
focus on successfully managing employees at all levels of an organization to achieve
organizational goals. Successful organizations set employee productivity as a major goal
in their agenda and apply techniques and methods to attract, acquire, develop and retain
employees in order to derive maximum benefits. Employees are human resources of an
organization and the most valuable asset through which the mission and vision of an
organization are being realized. The productivity of employees is a function of their
skills level which is depends on education and training and the level of job satisfaction.

To develop a high-performance and effective work force, organizations should use

human resource management techniques in the following areas:

- Human resource planning

- Job analysis and job design
- Recruitment and selection
- Training
- Distribution of employee benefits
- Negotiation with organized labour unions
- Employee motivation
- Performance appraisals
- Establishment of legal and ethical management systems
- Termination
HUMAN RESOURCE PLANNING

Human resource Planning is the process of forecasting the future human resource
requirements of an organization and determining the extent to which the existing human
resource capacity of the organization can be utilized to fulfill these requirements.
Planning is the process which helps the management in meeting the future demand of
HR in the organization with the supply of the right people, in required numbers at the
correct time and place. It focuses on the basic economic concepts of human resource
demand and Supply of the organization.

Human resource planning can also be regarded the process of anticipating an

organization’s future staffing needs, and identifying the steps needed to fulfill the need.
It is proper planning that initiates the process of recruitment & Selection by the
management.
Human resource planning consists of the following steps:

1. Analyzing the organization

2. Forecasting the future human resource demand

3. Estimating the human resource supply

4. Determining human resource gaps

5. Generating alternatives in filling the gaps

6. Developing the implementation plan

7. Reviewing of human resource plan annually

Step 1: Analyzing the organization

The analysis of the organization is done on two aspects;

i) The existing workforce Analysis:

Information about the existing work force will be collected by reviewing the persons
holding current positions in the organization (current human resource availability). This
review should be conducted in terms of number of available workers in respect to
qualifications, skills, knowledge, abilities, experiences, specialized expertise, age,
gender, Team and leadership potentialities, etc.
ii) The organizational plans and objectives

Human resource requirement depends on the overall plan of the organization. Plans
concerning technology, production, marketing, finance, expansion, diversification, etc.
will project the volume of future work activity. Changes in the organizations structure
will also determine the future man power requirements.

Step2: forecasting your future human resource demand

Human resource demand is the future workforce requirements of the organization in

terms of the number and type of workers the organization will need in the future at
different levels and in different departments. These requirements could be in terms of
skills, age, gender, specialized expertise, qualification etc.

To forecast Labour demand, consideration has to be given to:

• The organizational plans and objectives;
• The number of employees that will be retiring;
• Turnover rate;
• Potential to fill vacancies from within (promotions);
• Pre-set transfers;
• Foreseeable vacancies;
• Attrition;
Step 3: Estimating the human resource supply
Supply of human resource means the availability of workers with the required skills to
meet the company’s human resource demand. It may come from the internal labour
market (inside the company) or from the external labour market (outside the company).

Many companies keep track of the internal supply of talent by generating a human
resource inventory called a “Skills inventory” (that is a human resource inventory that
keep track of the firm internal supply of talents by listing employees’ education, training,
experience and language abilities).
This information aids in the identification of those eligible for promotion or transfer
before trying to fill the position from the external market, the need for training and
development, the need for succession planning. Such a process can reduce recruitment
cost and increase employee commitment to the company.

In the process of estimating the human resource supply of the organization consider the
possibilities of appointments based on promotions and transfers, possible external
recruitments, resignations, retirements, lay-offs, demotions, etc.

Planning of human resource should ensure that available manpower is put to full use (in
terms of work-load) to ensure smooth functioning of all departments in an organization.

Step 4: Determining human resource gaps

Human resource gaps are determined by comparing human resource demand and human
resource supply forecasts. This will portray either deficits (shortages; understaffing) or
surpluses (overstaffing) of human resource in future both in kind and in number.

Gaps may also exist in terms of knowledge, skills, aptitudes, specialized expertise,
gender, age, qualification, etc.

Step 5: Closing of Human Resource Gap (reconciling human resource demand and
supply)

To close identified gaps of the human resource, the methods to be used will depend on
the scenario: whether there exist a surplus of a deficit in the human resource requirement
of the organization.

a) The Case of a surplus in the human resource requirement (overstaffing)

This is the scenario when labour supply exceeds labour demand. The possible methods
of reconciling this situation are:

- Pay cuts

- Reduced working hours

- Initiation of voluntary or early retirement

- Inducement to quit (e.g. stop of bonuses)

- Layoffs

b) The Case of a deficit in the human resource requirement (understaffing of

shortage)

This is the scenario when the existing human resource is less than the required that is
demand exceeds supply. The possible methods of reconciling this situation are:

- Training or retraining

- Promotion from (within the organization)

- Succession planning

- Recruitment (from outside the organization)

- Sub-contracting of certain tasks

- Use of part-time workers

- Use of overtime

c) The Case of an equilibrium in the human resource requirement (Balance)

This is the scenario when no gap exists in the human resource requirement that is human
resource demand equals human resource supply. The decision of management in this
scenario will be:

- Internal transfer and redeployment

- Replacement of any quits from outside.

In situations where an existing human resource gap has to be filled by hiring of

employees, it is very important to know the Cost-Per-Hire by adding together all costs
involved such as: cost of advertising, employees’ referral rewards, administrative costs
of recruitment (internal & external), recruitment technology, travel expenses,
background check, potential relocation, etc. The average cost of the recruitment can be
determined by dividing the Total cost by the number of individuals hired. This can be
useful in many ways including;
- Comparing hiring methods
- Determining whether or not to outsource recruitment
- Assessing the cost of employee turnover rate.
Step 6: Developing the implementation plan
The plan will guide management to know exactly when an activity will be done and
should include the following:
1. Timetable for filling open and anticipated positions.
2. Design time to finalize job description and recruitment advertising
3. Separation agreement if applicable.
Step 7: Reviewing of human resource plan annually
Several changes are likely to occur therefore, the plan must be reviewed in response to
the following factors:
- Staffing changes due to growth and contraction of the business
- Management changes
- Economic changes
- Physical location changes
- Development of new products or services which require employees with
specialized skills.

APPLICATION

ie
The New Deal C social balance sheet gives the following information
 No of workers as at Executive Middle Skilled Unskilled Total
31st/12/2020 Management workers workers

21 27 65 122 235

The established hypothesis about the components of demographic evolution conduct to

look ahead 15 cases of retirement (2 Executive Staff, 3 Middle management, 4 Skilled
Workers and 6 Unskilled Workers); 5 cases of resignation (1 Middle management, 1
Skilled Workers and 3 Unskilled Workers); and 45 cases of recruitment (1 Executive
Staff, 2 Middle management, 3 Skilled Workers and 39 Unskilled Workers)

Within 5 years, 20 promotions of Unskilled Workers to Skilled Workers are possible, 10

promotions of Skilled Workers to Middle management, and 5 promotions of Middle
management to Executive Staff.

In 2025, the integration of investment program and economics forecasting (prevision),

permit to evaluate the needs at 5 years thus: 25 Executive Staff, 30 Middle management,
65 Skilled Workers and 150 Unskilled Workers.

Question :
Cie
 Underline the problems of employment of New Deal in 2025 (Use the
human resources planning steps).
 This enterprise has various correcting act to resolve these employment
problems. List the possible policies and give the implications of the one
that encourage internal mobility.

Solution:

No of workers as at Executive Middle Skilled Unskilled Total

31st/12/2020 Management workers workers

21 27 65 122 235
Retirement -2 -3 -4 -6 -15
Resignation 0 -1 -1 -3 -5
Recruitment +1 +2 +3 +39 +45
Promotion +5 +10 +20 -20 0
-5 -10
Total H/R supply as at 25 30 73 132 260
2025
Total H/R demand as 25 30 65 150 270
at 2025
Total H/R Gap 0 0 +8 -18 -10

By setting up a human resource plan, management is able to establish the human

resource gap in 2025 showing an excess of 8 skilled workers and a shortage of 18
unskilled workers. The excess 8 skilled workers will possibly the result of the projected
promotion of extra 8 workers from unskilled to skilled level. Management can therefore
best handle this problem if the promotion of the extra 8 workers is delayed till when
the work load or other changes in the human resource so warrant such a promotion.
However, delaying the promotion of workers will cause a disincentive at work
especially when those who are duly eligible are held behind. To this effect, a fair
approach should be adopted based on performance appraisal.
If this is done, then, the deficit in the unskilled workers will be reduced to just 10 and
can therefore be outsourced.
It is clear through this illustration that, recruitment needs of an organization can best be
determined by establishing a human resource plan that considers several factors
including growth or contraction, economic changes, management changes etc.