Human Resource Planning Process: A Comprehensive Guide

Posted on Aug 27, 2024 in Other subjects

ITEM 5: Stages of the Human Resource Planning Process

Stage 1: Data Collection and Analysis

1. Analysis

A. – This analysis starts with an inventory of the current workforce and jobs within the organization. It considers the skills, abilities, interests, and preferences of the current workforce, as well as the characteristics of jobs and the organizational skills required to fill them.

HRIS (Human Resource Information System): This system gathers data related to the history of individuals, including age, education, training, work experience (both inside and outside the organization), responsibilities, and wage developments.

Applications:

  • Supports decision-making in areas like succession planning and wage/productivity analysis.
  • Improves the scheduling of equal employment opportunities and ensures compliance with non-discrimination policies.
  • Provides a basis for anticipating the effects of alternative scenarios, such as foreseen deficiencies or excesses of skills in the future, and for creating career paths.
  • Can be used to track the effects of training and productivity improvement initiatives.

B. – Analysis of the current and future labor market, based on wage groups, occupational categories, and sectors. These historical data are used to project future HR needs.

C. – Determining the current productivity of labor and its likely evolution in the future. Turnover and absenteeism affect productivity levels and, therefore, future HR needs. An appropriate degree of rotation is desirable.

D. – Studying the organizational structure provides information on the likely size of different levels within the organization and potential changes in HR needs. As organizations become more technologically complex, they tend to develop more complex structures. The trend of flattening hierarchies, with the disappearance of intermediate levels, changes aspects of HR management (e.g., internal mobility channels).

2. Projected Demand for HR

This can be predicted using various forecasting techniques. These approaches tend to be more accurate with shorter time perspectives.

Informed Forecasting Techniques:

  • Made by experts, usually starting with management estimates that are communicated downwards to various levels. This initiates a review process, culminating in the consideration of suggestions and attempts to improve the forecast.
  • Delphi Technique: This technique involves group stages where each expert presents a forecasting report that is reviewed by others. Ultimately, decisions are made by consensus.
  • Individual/Group Technique: Similar to the Delphi Technique, individuals write their ideas on a sheet of paper, which are then displayed in turn. The ideas are written on larger sheets of paper for everyone to see and refer to later. This technique is used to detect organizational problems and potential solutions.

Statistical Techniques:

  • Simple Linear Regression Analysis: The projection of future demand is based on a past relationship between employment levels in the organization and a related variable (e.g., sales). If a relationship exists between the two variables, predictions of future sales can be used to estimate future employment needs.
  • This relationship is influenced by the phenomenon of organizational learning. The learning curve can be determined through logarithmic calculations. Once the learning curve is estimated, fairly accurate projections of future employment levels can be made.
  • It can also be used to relate the learning curve of production volume to the time spent on it and, from there, determine HR needs. Example of a mathematical learning curve expression: Y = A * X-b
    Where Y = average number of labor hours to produce X units; A = number of labor hours to produce the first unit; X = number of units produced; and -b = learning rate.
  • Multiple Linear Regression Analysis: This involves several variables, making the forecast more accurate. It is often used in large organizations.
  • Productivity Rates: Historical data are used.
  • HR Indices: Based on the HR data mentioned above, historical relationships between employees holding different positions are established. Regression analysis is then used to project needs.
  • Time Series Analysis: Past levels are used to project future hiring needs, taking into account seasonal variations, trends, and random movements.
  • Probabilistic Analysis: Hiring needs are estimated by combining the probability of obtaining a series of contracts with the HR needs for each contract.

3. Projected Supply of HR

  • Analysis of both domestic and foreign markets is required.
  • External Market Analysis: Attention must be paid to the qualitative composition of the labor market, migration patterns, and competitor demands.
  • Internal Market Analysis: Information on the current composition of the staff is necessary to determine the population dynamics within the company (voluntary and involuntary departures determine staffing levels).

Indicators to Determine Turnover:

1. Considering Inputs and Outputs:

(E + S) / 2 / Em * 100 = R

Where: E = inputs, S = outputs; Em = average workforce size

2. Considering Only Outputs:

R = S / Em

2. Considering Internal Movements Within the Organization:

[(E + S) / 2 + R + T] / Em = R

Where: R = resource inflows from other units; T = outflows to other units.

DISADVANTAGES: DOES NOT PROVIDE INFORMATION ON THE CHARACTERISTICS OF THE POPULATION. SOLUTION: USE OF SURVIVAL TABLES.

4. Reconciling the Budget

The staff forecast should be expressed in monetary terms, and the resulting figure must be compatible with the objectives in terms of organizational performance and budgetary constraints.

Stage 2: Setting Objectives and Policies for Human Resources

Once the supply and demand are known, a comparison is made to detect misalignments and design HR policies consistent with the organization’s objectives.

Stage 3: HR Programming

Need for New Resources

If the planning process reveals a mismatch between HR needs in the coming years and available resources, due to factors such as increased presence in international markets, the decision to launch a new product, or the incorporation of new technologies, the company will develop new personnel policies on recruitment, selection, training, and internal movements.

Workforce Reductions

Strong competition or reduced demand can lead to a labor surplus. Many companies have adjusted their productive capacities and incorporated new technologies and forms of work organization. The information identified through HR planning will enable the company to devise a plan to manage departures and potential internal movements required by the incorporation of new technologies.

Stage 4: Monitoring and Evaluation of HR Planning

Activities in this area aim to quantify the value of HR and recognize it as a valuable organizational asset. The HR management system facilitates the monitoring and evaluation of the program, and data is collected to support the forecast. Data collection should be done at fixed intervals throughout the planning process to detect deviations.

Criteria for Evaluating HR Planning:

  • Existing staff levels versus hiring needs.
  • Productivity levels versus stated objectives.
  • Programs implemented versus action plans.
  • Labor costs and programs versus established budgets.
  • Relationship between results (benefits) and program costs.

Obstacles in Human Resource Planning

  • Lack of support from top management.
  • Difficulty integrating all HR activities necessary for planning operations.
  • Lack of involvement of line managers.