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By Dr. Debashish SenguptaHuman Resource Management

Human Resource Planning3CHAPTER

Human Resource Management3Key Terms

Human Resource FunctionMarkov AnalysisSupply ForecastingInternational labor Organization (ILO)Qualitative MethodsThe Macro Environmental Factors

Human Resource ManagementIn leading firms today, the role of the human resource function is growing with the realization that people and their costs are critical to organizational success. If the planning and development of human resources is guided by strategic plans, shaped by organizational needs, and closely integrated with both shortterm and long-range company objectives, the importance of the human resource function to corporate success will be demonstrable, and recognized by top management (Manzini, Gridley).

4Human Resource Function

Human Resource Management5 Management must be able to guarantee that the organization will have the right number and the right kind of people at the right place and time (Alpander, 1980). Acute social and economic strains are liable to occur whenever plans do not pay enough attention to the need for jobs, and popular support, which is so necessary in carrying out a plan, is not forthcoming as a result (Mouly). Human Resource Planning has been defined as the management process of analyzing an organizations human resource needs under changing conditions and developing the activities necessary to satisfy these needs (Walker, 1980).

Human Resource ManagementPlanning for the corporation so as to have the right numbers of people at the right time, at the right place and with the right skills. It is a simple definition, but not so simple to put into practice as many human resource and business planners know (Burack, 1985). Viewed broadly, human resource planning can be defined as the function that coordinates the identification of the organizations future human resource requirements, oversees the development of plans and programs to fulfill those requirements, and evaluates the results (Hestwood, 1984).

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Human Resource Management7Human Resource Planning is much broader and more profound than its predecessor, manpower planning. First, a human resource plan includes all employees. Second, it must encompass consideration of both casual and end-result variables that describe and define the state of an organizations human resources. The casual variable consists of factors over which management has control. The end-result variable consists of the effects of these factors on people, which lead to the achievement of organization goals (Lopez, 1981). Human Resource Planning

Human Resource Management8Planning for the right numbers at the right place and time will continue to be important; however, human resource planning will become more concerned with training potential job applicants, attracting them, and managing a workforce that is highly diverse in terms of backgrounds, needs, sex, age, country of origin and values (Schuler). Human resource planning is directly tied to strategic business planning. Strategic business plans define steps that the organization will take to meet the demands of the future. Human resource plans assure that the right number and the right kind of people become available at the right time and place so that organizational needs can be met (Alpander, 1980).

Human Resource ManagementKey Elements of HR Planning

9A good human resource plan shall be derived from the strategic plan of organization. There are three key elements of human resource planning:

Forecasting labor demand.Forecasting labor supply (both external and internal).Analyzing the gap and developing HRP programs to fill these gaps.

Human Resource ManagementImplications of HR Planning on Organisation

10Human Resource Planning programs have primarily three implications on any organization

a. Cost implicationsb. Talent implicationsc. Organizational Readiness

Human Resource ManagementFactors Affecting Human Resource Planning

11Multiple factors affect human resource planning of a company. Broadly these factors can be grouped under three heads:

1. The macro environmental factors,2. The micro environmental (industry specific) factors, and 3. Company specific factors.

Human Resource ManagementThe Macro Environmental Factors

12The macro environmental factors could have impact in the way a company does its human resource planning.

Human Resource Management13The Micro (Industry Specific ) FactorsThe Micro (Industry specific) factors affecting human resource planning of a company could be identified as primarily four

a. Industry growthb. Industry attractivenessc. Technologyd. Competitive climate

Human Resource ManagementFactors Affecting HR planning14

Human Resource Management15Industry Size of the AutomobileAnd Auto Components Sector

Human Resource ManagementIndustry Size of the Electronics & ITHardware Sector

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Human Resource ManagementIndustry Size of the Building, ConstructionIndustry & Real Estate Services Sector

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Human Resource ManagementExports of Leather and Leather Productsfrom India (US $million)

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Human Resource ManagementIndustry Growth & Size of Organized Retail

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Human Resource ManagementInsurance Segment- Growth in insurancepremium (2002-2008)

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Human Resource ManagementThe Company Specific Factors

21The company-specific factors affecting the Human Resource Planing of a Company include:

a. Strategyb. Human Resource InventoryC. Human Resource Mobility

Human Resource ManagementDemand Forecasting

22Workforce demand forecasting is done by companies and they employ different methods ranging from qualitative to quantitative methods. The choice of method generally depends upon the size and complexity of the firm. Smaller firms usually have more informal form of human resource planning and hence many times rely on more qualitative methods. Whereas, larger firms usually having multiple departments, levels and higher mobility of workforce both within and outside the firm, generally use more quantitative methods.

Human Resource Management

Manpower Requirement (Auto &Auto Components Industry)

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Human Resource ManagementManpower Requirement(Electronics & IT Hardware Industry)

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Human Resource ManagementManpower Requirement(IT & ITES Industry)

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Human Resource ManagementManpower Requirement (Gems & Jewellery Industry)

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Human Resource ManagementManpower Requirement (Building, Construction Industry & Real Estate Service)

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Human Resource ManagementManpower Requirement (Leather & Leather Goods Industry)

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Human Resource ManagementManpower Requirement (Banking, Financial Services &Insurance Industry)

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Human Resource ManagementManpower Requirement (Textile & Clothing Industry)

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Human Resource ManagementManpower Requirement(Organized Retail Industry)

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Human Resource ManagementDemand & Gap Analysis of HumanResource in 9 Selected Industries

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Human Resource Management33A. Qualitative Methodsa. Judgemental Methods: Employee and anagerial judgement are used to forecast the demand of labour. The approach could differ from choosing to employ only managerial judgment (more of a top to down driven forecasting) to something like using a combination of employee and managerial judgement (more of a down-up driven approach).b. Delphi Technique: The Delphi technique employs the judgement of the experts. Generally a panel of experts is chosen. They are then polled for their forecasts. The average of such forecasts is then taken as the demand of workforce in that firm.

Human Resource Management34B. Quantitative MethodsQualitative methods have their own limitations and hence reliance is more on more hard-data driven forecasts. Two commonly used quantitative techniques are:

a. Trend Analysis: In trend analysis first a business factor relevant to human resource needs is chosen, for example sales, production etc. After this a historical trend of the business factor in relation to number of employees is plotted.

Human Resource Management35b. Workload Analysis: In workload analysis, after considering the workload, the planned man-hours are calculated. Then the productive hours per worker is estimated. The total planned-man-hours is divided by the productive hours per worker to forecast the demand of workers.

Human Resource ManagementSupply Forecasting

36The internal supply forecast essentially draws upon the number of outflows and number of inflows of human resources. Such outflows & inflows have to mapped for individual jobs. The most commonly supply of labor is Markov Analysis.

Human Resource ManagementMarkov Analysis

37Markov Analysis, also known transition probability matrix or renewal/ replacement analysis is a very useful way to forecast the internal supply of labor. No workforce is ever static. Employees are hired, they retire, they are promoted, they resign or are terminated etc. Markov Analysis attempts to project how the current workforce of a firm would look like if the current process of mobility continues.

Human Resource Management