Steps in the Human Resource Planning Process

Steps in the Human Resource Planning Process Designing the Management System • A crosscutting issue in human resource planning is to ensure that a proper system is in place to handle the process. The overall aim of this system is to manage human resources in line with organizational goals. The system is in charge of human resource plans, policies, procedures and best practices. For example, the system should track emerging human resource management trends, such as outsourcing certain non-core functions, adopting flexible work practices and the increased use of information technology, and, if appropriate, implement them.

Environmental Analysis • The first step in the human resource planning process is to understand the context of human resource management. Human resource mangers should understand both internal and external environments. Data on external environments includes the following: the general status of the economy, industry, technology and competition; labor market regulations and trends; unemployment rate; skills available; and the age and sex distribution of the labor force. Internal data required include short- and long-term organizational plans and strategies and the current status of the organization’s human resources.

Forecasting Human Resource Demand • The aim of forecasting is to determine the number and type of employees needed in the future. Forecasting should consider the past and the present requirements as well as future organizational directions. Bottom-up forecasting is one of the methods used to estimate future human resource needs by gathering human resource needs of various organizational units. Analyzing Supply • Organizations can hire personnel from internal and external sources. The skill inventories method is one of the techniques used to keep track of internal supply.

Skill inventories are manual or computerized systems that keep records of employee experience, education and special skills. A forecast of the supply of employees projected to join the organization from outside sources, given current recruitment activities, is also necessary. Reconciliation and Planning • The final step in human resource planning is developing action plans based on the gathered data, analysis and available alternatives. The key issue is that the plans should be acceptable to both top management and employees.

Plans should be prioritized and their key players and barriers to success identified. Some of these plans include employee utilization plan, appraisal plan, training and management development plan and human resource supply plan. Human Resource Planning Process Human resource planning process is the foundation of an effective workforce. The development of an organization is attributable to its committed and dedicated workforce. [pic] The term human resource implies human capital that operates an organization. The word planning suggests, a course of action. And lastly, process is the method of operation.

Thus, the human resource planning process is defined as, ‘a course of action that the human capital takes up for a methodical achievement of predetermined goals’. The definition of human resource does not end here. The term includes, its management, which primarily involves issues related to the workforce. Human resource management (HRM) is the strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of the objectives of the business. A company may have all the financial resources it may need.

But what if the manpower employed to manage the finances isn’t well trained? Well, nothing more than your finances going down the drain. The recent ‘Satyam’ fraud was due to poor control of the management board. Improper human capital may gain the output, but not the desired one in terms of quality. As the earlier mentioned definition suggests, the human resource management means managing your valued assets. The term human resource management has replaced personnel management. However, the meaning is still the same. It involves, employing, developing, utilizing, managing and understanding the staff in an organization.

Importance of Human Resource Management Since the industrial revolution, the world has progressed tremendously. Be it the steel industry, IT, fashion houses or housing sectors, development in all of these is evident. However, over the ages man has indiscriminately used and abused the natural resources available to him. It has resulted in a global energy crises and depletion of resources in general. In this backdrop, what remains is an abundance of human resource, or let’s say human capital. To achieve any more goals, tapping the right kind of human resource is the key. You may have a business house worth millions of dollars.

But what if there isn’t the manpower that suits the nature of the business? Hence, developing the manpower is of utmost importance. The Process of Human Resource Management Planning The human resource planning process, demands the HR manager to first understand the business requirement. Only if he comprehends the nature and scope of the business, will he be able to employ those who will deliver the required performance. When it comes to engaging the manpower, the manager should have a keen eye for spotting the talent. It ensures that the workforce is competent enough the meet the targets.

Additionally, the existing ‘talent pool’ in the workplace should be taken into consideration, so that people with complimentary skills can be employed. The functions of the HR manager are varied, he has to assess the currently employed workforce and their shortcomings. Identifying these shortcomings goes a long way in choosing an efficient workforce. While recruiting the new employees, the HR manager must calculate the expected workload. This way the HR department can design an accurate job profile and job expectations. Once you have the decided job descriptions, looking for candidates who fit the job will be easy.

Don’t be fooled by their qualifications, it is only the relevant experience that matters more. A good HR manager is one who has the zeal and passion to motivate his prospective employees to perform to their potential. Human resource planning process, thus, can be considered as one of the strategic steps for building the strong foundation of an efficient workforce in an organization! Human Resource Planning Process In 5 Steps The human resource planning process consists of five steps, namely, demand forecasting, supply forecasting, auditing, reconciliation and control.

Demand Forecasting – The HR planning process starts with demand forecasting which essentially means forecasting both the number and the type of employees that an organisation is going to require in the medium to[pic] long term future. This obviously requires a pretty in-depth understanding of both the organisation and the market in which it operates. The aspects of the organisation that will affect the demand for employees are its future plans and strategies and how these stand in relation to the existing employee base. The aspects of the market that will affect the demand for employees are the status of the economy i. . whether or not it’s in the grip of a recession, the levels of competition faced, labour market trends and things like this. Adequately forecasting demand is important because it greatly affects the organisations profitability. If there are too many workers, the wage bill will be unnecessarily high but if there are too few workers than possible opportunities cannot be seized upon. Supply Forecasting – This step is concerned with correctly assessing the capabilities of the existing staff in[pic] order to determine whether the organisation can meet the forecasted demand as it stands. This is done hrough inventory analysis which consists of both establishing a skill inventory and forecasting future changes to it. A skill inventory is simply a detailed record of who works for the company and what they are capable of. This enables HR personnel to establish what role each employee can take in meeting the organisations future demands for labour. Forecasting future changes to the inventory is establishing likely resignations, retirements, leaves, transfers and the like and analysing the impact that they will have. Auditing – This step of the HR planning process primarily involves analysing the results of the previous two steps.

By analysing both the current supply and future demand of employees, areas of shortage or surplus can be identified. While this is the main aspect of this step, there are other activities carried out during the auditing step. It also involves establishing why resignations have taken place, how much such resignations are costing the organisation in terms of the skills and experience of employees that are leaving and how much it is costing to find replacements. If it then established that resignations are costing the organisation too much, means are established to prevent future resignations.

The effectiveness of the organisation in areas such as recruitment and training is also analysed and again future changes established if it they are seen to be lacking. Reconciliation – This step involves establishing the actions that need to be taken in response to the audit. The actions that are taken will obviously depend on the result of the audit. If a company is already performing optimally from a HR perspective then this step could be very [pic]light. If there is a large difference between forecasted supply and demand however a lot of action may need to be taken and it could take some time to rectify the situation.

There are various actions that can be taken and they include: • [pic][pic]Establishing and implementing strategies to recruit new employees • Establishing and implementing strategies to lay off existing employees in the event of a surplus • Revitalizing existing training and development plans in an effort to ensure that the organization continues to have an adequately sized and skilled workforce. • Identifying what employees are truly key to the organisation through both career analysis and planning and succession planning. Radically altering current work practices such as work schedules and overtime policies. An important aspect of this step is considering the implications of any actions that are taken. For a start, labour legislation must be followed and trade unions must be negotiated with if there are objections. Areas such as lay-offs and overtime are often heavily affected by both. There is also the question of whether the organisation currently has the resources required to make the changes that the audit has deemed necessary.

Control – The last step of the HR planning process is controlling and monitoring the implementation of the newly generated HR plan. This involves ensuring that the proposed changes do indeed come about and within the schedule that the HR plan dictates. Due to the fact that both the demand and supply of labour is constantly changing, a good HR plan will include mechanisms to ensure that necessary revisions are made well in advance of when they are needed. Part of the last step is to ensure that such mechanisms are indeed working and hence the final step is essentially ongoing.

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