The business would have to look into this carefully before they make any decisions as they may over or underestimate the number of staff that they may need to complete a particular task. If a business did not do its research then this could end up in not employing enough staff to complete a job or employing too many, so that many workers may not have anything to do.
Using business and management knowledge
This would mean the business asking more experience members of their workforce such as managers their views of the amount of employees that they may need to employ in the future. An example of this would be they may say that they think that more employees may be needed to work part-time rather than full time as there may be a lack of demand for their products and feel that they can produce adequate output whilst cutting the amount of full time staff and therefore making more profit at the same time.
Or a manager of a restaurant may feel that they are loosing customers or maybe business meals, and therefore do not need as many staff as they have employed in previous years. This may also fall the other way round and they may feel that they need to employ more staff rather than less.
Calculating Staff Loss
There are various reasons why people may leave their job such as promotion or retirement or they may go on maternity leave. If this is the case and an employee leaves their job, then this means there is a space and will need to be filled and this is called a vacancy. There is an indication of people leaving a business and this is called percentage wastage rate or labour turnover index. This will give the business an indication of the number of people leaving by a percentage of the people that could have left. E.g.
Last year Argos employed 70 staff and of those 70, 18 left, this means that Argos’ labour turnover is;
Number of staff leaving in a set period x 100 = 18
Average number of staff in post during 70 = 25.7%
A period
This is one way that could be used to predict the number of employees that may leave their business in the next year although this is not usually reliable. If it was close to what the business predicted then they could employ near enough the right amount of staff using this method of prediction.
There are many reasons why a business may need more workers and this is things like; the demand of a business product increases then they may need to increase the number of employees that they need to meet the demand with what they supply in order to efficiently optimise their workers and make more profit.
There are also reasons why a business may need less workers such as advances in ore technology i.e. workers are not needed as robots and machine can do the same job more efficiently as they do not need dinner hours, they do not fall sick etc.
Analysing current employee supply
After the business has forecasted and identified the amount of workers that they need, the nest step is to analyse the current employee supply.
This would involve calculating the amount of employees working in particular jobs and identifying their category and function. This would also mean collecting information such as the employee’s length of service, and age etc. This would mean if a company wanted to reduce the amount of people leaving via retirement they may want to look at the amount of graduates that the have on their staff.
From the analysis of future demand and current workforce, a business can decide upon how many and the type of workers that they want to recruit internally and externally in future to achieve future targets. It can also decide how it might reduce its existing workforce if necessary.
Planning internal employee supply
A business may plan to meet future changes in demand from workers from inside the organisation. The business may also decide to reduce its workforce. Whether a business can meet its future workforce requirements may depend on the following points;
- Promotion – A business may decide to promote employees from inside their business. This has the advantage that they already know the businesses culture. They will also adapt easily to the environment. Promotion would therefore leave a vacancy further down in he hierarchy.
- Staff development and training – It will be more likely to find a person that is suitable for a job if they train and develop their staff on a regular basis. This may provide an employee with the skills to be able to do a different job.
- Staff loss and retirement – A business should take into account the rate of retirement within their business, High rates of labour turnover create vacancies. This may also mean that the more experienced and skilled people within the organisation have left and there are very little skilled workers left in the organisation. This may make it difficult for the businesses in internally recruit. This may leave problems when trying to fill a vacancy which is more senior within the business, Sometimes if people would like to reduce their workforce they may not recruit after somebody has retired, or sometimes they may encourage people to take an early retirement with a financial incentive.
- Flexibility – By this I mean may be able to change its workforce in order to meet its labour supply requirements. This means they may say an employee will need to work so many hours a year rather than so many a week, this means that the person can exceed 40 hours a week one week and then maybe only do 3 hours the next week, as long as they do a set amount of hours each year. This can also mean they can make people part-time or sharing jobs,
- Legal factors – A business may decide to make people redundant if they feel that the demand for their product will drop. They may be obliged to pay out redundancy or severance payments.
Planning external employee supply
This refers to a business recruiting from outside of the organisation. There are various factors which will have to be taken into account such as local and national, when recruiting from outside of the organisations.
- The availability and price of housing in an area.
Some people may not be able to afford houses in a highly priced area; the availability of housing in a particular area may influence people to move there.
- The ease and availability of public transport.
If a person who worked in a remote factory in an area which is not used often by the public may find it difficult to reach their work if they have not got a car. An area with a rail line or a bus route may prove to be popular with workers as they will find that they do not have difficulty reaching their work every morning.
This means the closing or opening of businesses nearby of the same nature may affect the sales of the business, i.e. if there was a JD sports shop opening right next to a JJB. This would affect the sales of JD, and then when the JJB shuts they may find that their sales increase again.
If there was an area with a high rate of unemployment this may increase the choice that they have for people to work for them so they might have more of a chance of finding the right person for the job.
This means that specific skills may be found in certain areas of the country.
- Availability of flexible workers
This is a constant use for businesses wanting to use teleworkers as they are very flexible. The also work from home which reduce business costs
- Government training and subsides
This may mean that the government may fund training schemes so then this will give a young person to get a job, this will give a trial period for any possible worker.
- Population and demographic trends
This may mean that in the UK at the moment there is a growing number of people from the older generation who are available for work. This is likely to effect the supply plans from outside the organisation.
There are restrictions on the nature of advertisement that the business can use when they are recruiting from outside of the business environment. There are also laws that protect the rights of employees, such as their pay and conditions of the workers when the are employed.
There are 4 main reasons for Human Resources planning and these are shown below;
- It encourages employers to develop clear links between their business plans and their HR plans so that they can integrate the 2 more effectively. This will help them to see were the business is going, and how many people they will need to help the business achieve its goals.
- Organisations will be able to control staff costs more effectively as only the necessary number of staff should be employed, as over crowding the workplace will result in disaster.
- Employers can build up a skill profile for each of their employees. This will make it easier for the business to use staffs that has the right skills in different areas of the business.
- It creates a profile of staff (related to gender, race, disability etc) which is necessary for the operation of an equal opportunities Policy
The organisation has to plan effectively and for this to be taken part efficiently, the organisation must take into account the following options.
- Stock taking
This includes;
- Taking account of what you have got
- See how many people are employed in the business
- See if employees are skilled at something in particular
- Helps the business to make sure that all employees skills are being used to their full potential and none are being wasted
- Skills audit
- Forecasting the demand for employees
This includes;
- Orders for the future – may need to take more people on as the business expands etc.
- If there is a high demand for an organisations product they will need to take this into account and employ the required amount of workforce so then they can meet this demand.
- Forecasting the supply of labour
This includes
- Labour turnover rate
- People leaving school or other jobs, have they got the necessary skills?
- Internal supply – train existing employees up for promotion
- Implementation and review
This includes;
- Constantly plan ahead
- Improve planning techniques
- Review- looks at previous planning and improves this next time.
External Labour market
This is specific information about the people who influence the business, but they are outside the business;
This will be information such as;
- Information on the number of people currently looking for a job. This information would be accessed from unemployment figures
- Information on recent businesses who have made staff redundant
- Figures on the number of people who have just left university
- Number of school leavers (apprentices)
Internal Labour market
This is specific information about the staff that is already employed within the organisation.
Information that would be kept is shown below;
- Can existing staff be trained?
- Do existing staff have the right skills for the job?
- Are existing staff likely to retire?
- Are Existing employees likely to leave?
- The terms and conditions of employment
- Does the business have too many or too little staff?
- Are existing staff appropriate for the future of the business
- What is the current employment rate?
This also means that the company can recruit from different departments within the business, and train and promote existing employees so that they are able to do the job.
Internal influences on human resources
Below is an example of an internal influence on the human resources department;
An influence may be things like people inside the business getting a promotion, will influence the business as the business do not have to further recruit. If they already have the staff they need to fill a job, they will use these although a small amount of training may be needed.
Another internal influence would be if improvements were made within the business environment this would make employees less like to leave or change to another job because their current job did not have what they wanted,
External influences on Human resources
The external influences on the business would be things like new recruits. This would affect the business as they would need to be trained and will take time for them to fit into the business and complete the job to their best potential.
A company may use external agencies or sources to find the right people for the job instead of the business having to do it themselves. i.e. finding someone completely new to fill a vacancy.
I feel it would be a lot easier and cheaper for the organisation if they could find and existing employee who can leave their department to do a job without having to be replaced.
