The central purpose is to match knowledge and skill supply to the organisation’s knowledge and skill demand as selection of the wrong candidate can lead to serious inefficiencies and possible business failure.
Managers analyse business plans and consult other personnel to obtain information about their human resource needs. They make decisions about what is required and identify appropriate sources of supply. It is essential that they understand company’s objectives so that they complement their own plans with an overall strategy that is clearly defined. Managers, however, need to appreciate that both the business and human resource plans are interdependent entities that are continuously changing.
At the best of times planning is difficult and in periods of economic uncertainty like at present in Ireland, it is even more challenging. In certain cases, organisations do not even know if they will be in business four months down the line which inevitably makes planning almost impossible. On the other hand the principle of not planning at all is not realistic.
Walker (2000) argues that human resource planning facilitates the reduction of human resource costs through the anticipation of shortages or surpluses as they can be amended before they become unmanageable and expensive. That it provides a basis for planning employee development activities and improves the planning process as well as providing equal opportunities to employees and promoting greater awareness of policies and activities throughout the company.
Human resource planning process
As human resource is deemed to be the most important resource in a company, this means that human resource planning is one of the most important processes. The bridging of gaps between demand for and supply of human resource leads to development of plans that are produced by those who understand these objectives. It is therefore essential that human resource plans complement the overall business plan.
The four stages identified by Sisson and Storey (2000) are stocktaking, forecasting, planning and implementation. These four stages are described in the following paragraphs. (Annex A)
Stocktaking
The first step is to understand the context of human resource management and the internal and external environments where a range of variables influence organisational operations. According to (Sisson & Timperley) (1994), it is possible to develop an accurate human resource profile by analysing and investigating these variable factors.
Data on external environments include general status of economy, changes in government policies including legislation or new plans on education and training developments. The labour market trends are also analysed in relation to employment and unemployment, demographic trends, diversity in the workforce and even changes in population. Globalisation and advancement in technology are also explored.
The workforce is evaluated and classified according to factors such as age, experience, knowledge, skills and abilities. Sales targets, production or profits and the human resource systems are also analysed. New flexible work practices and employment development in other organisations are researched including issues such as cultural changes and employee relation climate that would impact on future employment patterns.
Stocktaking provides information on human resource capabilities and according to Holden (1994), the analysis of human resources leads to development of recruitment plans to avoid unexpected shortages, identification of training needs and management of development plans.
The Forecasting Stage
Forecasting involves predicting the future demand for and supply of labour. Predicting the number and type of employees require in-depth understanding of both the organisation and how the market operates. It is thus necessary to understand the internal and external environments.
Forecasting resignations, recruitment and understanding the impact on skill inventory levels give the company a competitive advantage. The supporting role of human resource management is very important at this stage and the company’s overall strategy should be flexible enough to allow for changing circumstances. Although this stage is difficult, forecasting is required so that the organisation can make informed decisions
Mayo (1993) suggests that knowledge in the following aspects will facilitate forecasting:
- Changes in requirements of management
- New subsets that may be required and those that are not required any more
- Changes in the number of particular types of jobs
- The knowledge, skills, attitudes and experience
- Changes in career structures
The ability to predict a rate of labour turnover is an important aspect as it can facilitate the creation of policies that can improve retention rates, particular those employees that companies want to retain. Annex 2 shows how labour turnover and wastage can be calculated.
Past trends are observed and by using statistical techniques forecasters estimate future workloads and decide how many people they will need. In addition to quantitative methods of calculating turnover and stability, data from qualitative methods can also be gathered.
Two major methods of forecasting are known as the Delphi technique or managerial estimates. Other methods include the time series, personnel and productivity ratios and regression analysis.
Any changes in strategies may involve recruitment, redundancies or even the offer of early retirement. An organisation planning to launch a new product requires additional marketing personnel and another organisation closing down might look to retrench its workers. Similarly technological developments might prompt the company to shift its reliance on fewer numbers of technically skilled workers.
Planning
The next step in HR Planning is developing action plans to bridge the gap between forecast and supply. The various alternatives include:
- Strategy to recruit new employees
- Retrenchment of downsizing strategy to shed excess workforce
- Training and Development plans to right-size the workforce
- Career Planning and Succession Planning to identify key personnel
- Changes in work regulations such as timings, overtime policy
This stage can also trigger a skills audit of the current workforce. It takes numerous factors into account which includes future developments, work patterns and structure and other policies and procedures as those for managing reward and diversity.
Action plans can include training/retraining, recruiting, contracting or outsourcing, succession planning, organizational restructuring and technological enhancements. The company may develop its staffing plan in-house or engage the services of a consultant.
Implementation
The implementation stage ensures that resources are in place and roles have been clearly communicated. All relevant stakeholders must work together to execute the human resource plan. Since both internal and external environments are subject to change over time, it is advisable that plans are constantly monitored and reviewed and amended as and when required.
Challenges and issues facing this process in Ireland
The rapidly transforming business landscape means that there are many challenges that will continue to evolve for years to come. In Ireland, changes in labour market trends, demographic, globalisation and technology have all impacted on the success of the human resource planning process activities and will continue to do so in the next few years. Labour markets differ in various ways; managers have to consider geographical differences when analysing plans as differences in pay, conditions of employment, and even differences in skills and educational profiles of the potential workforce have to be considered.
Whilst globalization has resulted in an increase in the supply of workers who can be accessed, it has not kept pace with the increased demand for skilled workers in the global economy.
Challenges in recruitment and selection of employees are already being felt by organisations. As annex A shows, there is a link between each stages of the planning process hence challenges in any part of the link will affect the process. Organisations need to be aware of what’s transpiring in the external labour market as well as knowing their own existing workforce before defining their human resource plans.
Major factors affect the labour market in Ireland at present time. The unemployment rate has risen to 14.3% as at July 2011 and as at June 2011, 1.4million people were not in the labour force. Due to the fact that a large percentage of employees were in the construction industry prior to the recession, there is now a need to up-skill and re-skill a large number of people since high technology and service sectors are expected to grow over the coming years.
Migration of labour has also brought dramatic changes. Overall emigration is estimated to have reached 76,400 in the year to April 2011 with Irish nationals accounting for 42% of that figure. The number of immigrants from other countries has decreased but a high number of diverse nationalities are still employed in the workforce. The number of older workers in the workforce will increase as the age group of 50 to 64 is the only group growing and will possibly increase by 25%.
The ability of Irish companies to meet their skills requirements is also likely to be tested in the coming years due to the declining contribution of the baby-boom generation. Furthermore, female participation is unlikely to increase much further as many women currently in the workforce are in their early to mid-thirties, increasing the likelihood that there will be an increase in the rate of maternity leave. While immigration can continue to make up any shortfall in the Irish labour supply, the high cost of living will make it increasingly difficult for Irish recruiters to woo talent.
In Ireland, work-life balance issues are becoming increasingly important due to the long commuting times and low provision of childcare. Hence, companies that offer flexible working arrangements, flexible working hours and part-time options are likely to be the most attractive to the modern worker.
Globalisation, technology and social changes all contribute to tomorrow’s context for both private and public sector organisations. The increasing professionalism of jobs is likely to affect participation and education and training as people are challenged to up-skill for future employment. Whatever the economic climate, having the right number of people at the right time with the right skills to deliver changing business needs has become increasingly challenging.
Conclusion
Human Resource planning is a process where an organisation ensure that it has the right number and kind of people at the right place, at the right time, capable of effectively and efficiently completing those tasks to achieve its overall objectives.
Over the last 20 years, the workplace has changed in many ways, resulting from various factors. According to Patrick Gunnigle et al (2011, Page 130) ‘the effects of recession are apparent in Ireland, as organisations surveyed have reported that the number of people being employed have decreased’.
The next decade will bring even greater changes that will impact on each and every facet of the organisation. In order to respond to these demands, human resource planning process will need to factor in requirement of new skills and competencies that relate to culture, technology capabilities and methods to measure and quantify effectiveness as well as taking in all the variables factors in the environment.
Different human resource activities should be integrated in order to enhance the value of human resources. Planning should help with the balance of all human resource activities in the organisations, mainly based on the recruitment and selection of the right candidates. Effective recruitment and selection can only be successful if the human resource plans drawn by managers take into context the company’s overall strategy, vision and goals.
Personnel & Human Resource management – Theory and practice in Ireland – Patrick Gunnigle et al., Page 40
Human Resource Management – Derek Torrington et al., - 8th Edition – Page 6
Human Resource Management – A contemporary perspective – Ian Beardwell & Len Holden – Page 120
Introduction to Human Resource Management – A guide to personnel in practice – Donald Currie – Page 56
Introduction to Human Resource Management – A guide to personnel in practice – Donald Currie – Page 58
Introduction to Human Resource Management – A guide to personnel in practice – Donald Currie – Page 57
Introduction to Human Resource Management – A guide to personnel in practice – Donald Currie – Page 58
IPA Manual – Human Resource Planning – Page 35
Introduction to Human Resource Management – A guide to personnel in practice – Donald Curie – Page 60
Personnel & Human Resource management – Theory and practice in Ireland – Patrick Gunnigle et al., Page 66
Human Resource Management in Ireland – Patrick Gunnigle et al – Fourth Edition – Page 104
Human Resource Management – Derek Torrington et al., - 8th Edition – Page 110
Introduction to Human Resource Management – A guide to personnel in practice – Donald Curie – Page 66
Personnel & Human Resource management – Theory and practice in Ireland – Patrick Gunnigle et al., Page 67
http://www.brighthub.com/office/human-resources/articles/88391.aspx
IPA Manual – Human Resource Management – Page 40
Personnel & Human Resource management – Theory and practice in Ireland – Patrick Gunnigle et al., Page 104
IPA Manual – Human Resource Management – Page 40
Human Resource Management in Ireland – Patrick Gunnigle et al – Fourth Edition – Page 106
IPA Manual – Human Resource Planning Process – Page 40
Annex 3 – explanation of Delphi Technique
Introduction to Human Resource Management – A guide to personnel in practice – Donald Curie – Page 70
IPA Manual – Human Resource Planning – Page 36
Manual – IPA – Human Resource Planning – Page 37
IPA Manual – Human Resource Planning – Page 37
http://www.cso.ie/statistics/empandunempilo.htm
Human Resource Management in Ireland – Patrick Gunnigle et al – 4th edition – Page 95
- Migration & Population change
Organisation for Economic Cooperation and Development - Annex 4
Manual - Employee Resourcing, Development and Performance Management – Page 17
Human Resource Management in Ireland – Patrick Gunnigle et al - 4th edition – Page 95
by
mariemarjorie (student)
