Human Resource Planning Concept Clarification

Published Date: 02 Nov 2017

Abstract

Human Resource Planning is a multifaceted subject, particularly at the time of increasingly turbulent business environments delivering far morediscontinuities, which increases the tensions between the greater need forplanning and the greater difficulties of estimation. Though it is a difficult subject, the basic purpose is forthright; HRP is apprehensive having the right people at the right places and the skills and the right time too.

The purpose of this study is to investigate the nature of, and to what extentcompanies are able to manage this complexity. For this study, eight case studycompanies from different industries have been used in order to identify if thereare any industry-specific differences or trends regarding HRP aspects.

Out of all the results of every research of the companies that were analyzed shows that the HRP influences the degree of stability in terms of employee turnover and economic fluctuations in their respective industries.

Contents

Introduction

It includes the background of the subject and an overviewof the research problem. And alsoathe objectives of the study, delimitations are discussed in this report.

Research Background

Organizations are underqincreasing pressure to findaways to implement theirhstrategies in a rapidlyachanging business environment,qin which planningolifecycles tend to shrink toareduce the ‘time-to-market’qintervals. At the sameatime, organizations are puttingamore and more emphasis on aligning theyorganization and people in theiraattempt to achieve business goals. HRP isausually seen as anqessential feature ofathe ideal-type modelaof human resource management,qeven if it does not alwaysqappear to be given high priorityain practice.

The issue ofaeffective planning for peopleqwas brought up longabefore the advent of humanaresource management. Theadeveloping businessaenvironment forces organizationsqto plan effectivelyafor their human resources,qthe rapid changes in theebusiness environment also makesait increasingly difficultqfor organizations toqplan with accuracy. Inuthe light of this I want toainvestigate to what extentqorganizations plan for HR inqtoday’s business environment.

Objectives of the Study

The aim of the study specifically focuses on the progressively turbulent business atmosphere inflicting new conditions for companies’ ability to plan for an hour. What is more, we have a tendency to aim at analyzing the underlying reasons and motives among our corporations of study with regard to HRP.

When these new conditions for designing area unit place into contrast with the explanations and motives behind HRP, equilibrium between what's desired and what is possible can ultimately commit to what extent HRP is possible within the specific organization.

Delimitations

To limit the scope of our investigation was of great concern to us at the beginning of our work in order to get to a point of departure, that we were able to build a realistic and feasible study. We have limited our study to include long term HRP. Our definition of long-term corresponds with have definition in the literature, referring to plans that extend over a period in the future, or more. This study therefore is not covering the activities in the departments of human resources on shorter time aspects, such as the daily work with questions about salaries etc.

The study is based on empirical data, due to constraints of time specified factors; It was not realistic to design our research to include visits to organizations outside of Sweden. However, more evidence of the organizations are collected with operations around the world, representing other markets.

Methodology

The aim ofathis section is toqgive the reader an insightqinto how the researchwasadone. This section starts out by explainingswhat research strategy Iahave used, followed by researchamethod. Thereafter follows a descriptionqof data collection and dataqanalysis. Finally, the credibility of findings is discussed.

Research Strategy

The strategiesathat are of interestqto my study areasurveys and a multiple caseqstudies. As one intentionais to investigate eachaorganization’s reality by usingqthe interviewees as toolsaof information, butqsurveys may notareveal a clear andqhonest enough picture,aas the respondents willqbe too much guidedqby our questions. Caseastudies are suitable for practicalqproblems and theyqare often thought ofaas being problem-centered,qsmall-scaled, and entrepreneurial. Moreover,qone of the strengths of theacase study is its unique abilityqto use a lot of differentaempirical evidence. So the main focus is toqexamine to what extent organizationsaplan for humanaresources. It is therefore not enoughqto study the case of a singleaorganization. The strategyathat is best suitable toaresearch is therefore a multiple-caseastudy.

Research Method

Study is designedain such a way that thearesearch findings will representacomparative cases. Theyoare comparative inathe sense that the interviewsaare semi-structured, thusainviting the interviewees toaenlighten additional areasaof importance. The cases areaalso comparative in the senseqthat all the intervieweesapossess equivalent positions. But, the intentionawith the design of theqstudy is at the sameatime to use contrastingacases, i.e. organizations fromadifferent industries andaof a different size. Thebpurpose of such a designais to arrive at a basisqon which I couldadraw comparisons and/oracontrasts between organizationsqoperating in differentaindustries with varying levelsaof turbulence in theirqsurrounding business environments. Researchaincludes cases from theqfollowing industries: aviation, restaurant,qmanufacturing, etc.

Research methodais clearly qualitative, becauseqof the in-depth interviews fromarelatively small sample ofqorganizations. Qualitative approach enablesqus to gain an extensive understandingaof each case thatqI have studied, which Iafeel is necessary in our attempt toafind answers to researchqproblems.

Data Collection

The dataqcollection involves several differentqstrategies such as conductingainterviews and identifyingqcomparable theories through variousabooks and journals. Moreover,qannual reports from theqvarious cases are reviewed inaorder to have a more detailed understandingqof the case studyacompanies. There is no singleqsource of information that canaprovide a comprehensive and completeaperspective on the study. Itqis therefore important foracase study research toquse multiple sourcesaof data to get as broad a viewqas possible about each specificacase.

By collectingaprimary data we ensureaour information to be relevantafromatime and real-life perspective. The secondaryqdata provides us with a deeperunderstanding of the subjectqas well as the subject’sahistory and development. Byagathering internal secondary data, i.e.aannual reports, we learnedqhow each organization wasastructured etc., which in turn providedqus with a soundplatform for each case thatqwe built our interviewsqupon.

Interviews

Conducting interviews represents one in all the essential sources of gathering data for a case study that is true in our case study yet. The sort of interviews that were used are semi-structured interviews, i.e. a mixture of additional or less structured queries wherever the interviews radio-controlled by a collection of queries and problems to be explored.

Aware of a number of the pitfalls of conducting interviews during this manner, like response bias and reflexivity, we have a tendency to have neither planned the precise queries nor the order of the queries. We have a tendency to have a collection of topics to be explored common for every interview so as to be able to cross-analyze the answers. However, the interviews were designed in order that the respondents were liberated to say different problems they felt were of interest to the topic. This created a "discussion-friendly" atmosphere during which follow-up queries were asked.

Main intention with the interviews was to explore factual information, ascertained by the individuals interviewed, concerning however their organization works with long run HRP, each within the gift and traditionally. To explore reality inside every organization, United Nations possess the foremost factual information potential and other people who have an honest insight into the topic of interest were interviewed. The goal was so to interview the VP of the time unit performs in every case company.

Data Analysis

The first step is to prepare the information in topical or chronological order thus it may be bestowed in a very descriptive manner. The next step is to classify the information into classes, themes, or types. The ultimate step involves creating conclusions, developing models, or generating a theory.

The classification of the empirical findings implanted consecutive step that was conjointly supported the queries found within the interviews conducted. This actually increased ability to cross-analyze the eight cases, since the comparable knowledge were organized and classified prior to. Within the final step, was to enlighten factors that square measure general across the eight cases. However, individual findings that felt were of interest and of importance to check were stressed additionally.

Research Credibility

The focus is put on industry prerequisites that have not emphasized the issue of finding representative companies for their respective industries, as each company is affected by its industry’s prerequisites no matter how they differ compared to its competitors.

The time aspect of study forced to delimit in the research. Not only the time aspect of the study but also the difficulties for potential interviewees to find time. Aim with the interviews was to interview persons whose opinion, no matter how subjective it may be, has the main influence on the ways in which their organization conducts HRP. Rather early in the interviewing process, we learned that the higher the position possessed by the interviewee the better the ability to answer the questions. The best potential interviewees therefore narrow down to only one person in each organization, namely the person responsible for the HR function. In the other cases, the person interviewed was with the main responsibility for the HR function. We considered them to be the only persons with enough in-depth knowledge and hence, most appropriate for answering the questions regarding HRP. However, it was soon realized that it was of no augmenting value for our study since there are so few people within the organization with overall knowledge to sufficiently answer our questions.

Theoretical Framework

This chapteraconstitutes the theoreticalqframework which has focused mainly on research. The firstathree sections dealqwith defining the conceptaHRP, as well as explaining itsqorigins. These sections are theqfoundation necessary forexaminingaHRP in depth. Without aqprofound understanding of theaconcept, there was aagreat risk of losing the problemqfocus. Since HRP isqa relatively vast andqcomplex concept, theapurpose of the remaining sectionsqis to break the conceptadown in order toqget a more detailedqinsight of the differentqparts that constituteaHRP.

Human Resource Planning – Concept Clarification

As in such a big amount of areas of personnel management, there's some confusion concerning the precise meanings of the terms wont to describe the human resource planning function. Here, as elsewhere, developments in word have rapt on at totally different speeds and in several directions than developments within the activities themselves, resulting in one thing of a twin between the ideas and the labels wont to describe them. during this section we would like to clarify what we tend to mean by the construct HRP.

The main distinction is between those that see the term ‘human resource designing’ as having generally an equivalent that means as the longer established terms ‘workforce planning’ and ‘manpower planning,’ and people World Health Organization believe ‘human resource planning’ to represent one thing rather totally different.

The ‘manpower planning’ is actually quantitative in nature and is bothered with prediction the demand and provide of labour, whereas ‘human resource planning’ contains a so much wider that means, as well as plans created across the total vary of personnel and development activity. These activities embody soft problems like motivation, worker attitudes and structure culture. the alternative opinion is that, the term ‘human resource designing ’is merely a a lot of fashionable and gender-neutral term with primarily an equivalent that means as ‘manpower planning.’ each area unit involved with trying ahead and mistreatment systematic techniques to assess the extent to that a corporation are ready to meet its necessities for labour within the future. they're so undertaken so as to assess whether or not a corporation is probably going to have ‘the right individuals, with the proper skills, within the right places at the proper time’. in step with this definition, human resource designing could be a comparatively specialized sub-discipline among the final activity undertaken by personnel managers.

There area unit totally different views of the precise that means of HRP. It’s over a quantitative approach, that problems like worker retention, attitudes and motivation area unit essential options for having the proper individuals, with the proper skills, within the right places at the proper time. HRP contains a wider that means, encompassing "soft" HR problems and it's the one that's accepted for the aim of this text.

The Evolution of HRP

The Contemporary Purpose of HRP

HRP in contemporary contexts can be a complex issue, especially in times of rapid changes in the business environment, which increases tensions between the need for greater planning and the difficulty of forecasting. It seems relevant to investigate what are the underlying organizational purposes to human resources planning, and also, what are the expected results of this planning.

The effective HRP can help to anticipate possible future difficulties, while there is still a choice of action. Forward planning should allow the Organization to develop an effective personal strategies related to activities such as recruitment and selection, training and retraining, career progression and development of the management, transfer and redistribution, retirement, wage levels, anticipated layoffs and accommodation requirements.

The first objective and an important purpose behind the use of HRP is to give an organization a wide vision, vision of the future not only the number of employees, but also type, skills, and attributes of the people who will be needed in the future. HRP provides information about activities which recruiters base their and reveals what gaps there between the demand and the supply of people with particular skills.

The second target tries to reveal what activities of formation and development need to realize to make sure that the existing personnel and new recruits possess the necessary skills in the opportune moment. The longest and more specializing is the training, the most significant precise HRP is an effective functioning (operation) of the organization. 

Labor costs it is catalogued like the third target and tells how HRP helps in cost reduction with the target to prepare operations of the organization in advance how they can they will incorporate more actively. This is even more important when there are considered to be new companies or projects since it provide information on which (whom) to base vital decisions.

The fourth target is a redundancy. HRP is an important tool in the anticipation of future dismissals and therefore it allows correctional policies to be adopted, like the freezing of the hiring, training, and pensions anticipated in order to reduce the number of implied.

Another advantage associated with HRP, like the fifth target, is the collective bargaining. In organizations with strong trade union presence, HRP provides important information for its use in the negotiation process. It is particularly important when long-term agreements are negotiated to improve the productivity and efficiency. In these cases, the information provided by the forecasts of HR allows calculations to realize as for big an increase in the payment or how big can be a reduction of the time of concede in exchange for the processes and the most productive methods of work.

The sixth and last target presented like a target of HRP treats with the planning of accommodations, like the future need for office space, parking of cars and other facilities of the place of work. Such considerations are of big importance, especially organizations that wait for the rapid extension or the operations contraction fix. As with others five targets described above, HRP also here points at the expenses control on the long term predicting the future.

Techniques for Managing Supply and Demand of Competence

As HRP to aqgreat extent isaconcerned with theqplanning of competence, this sectionqwill examine someqaspects on the supply andqdemand issue of competence thatqare brought upain theory.

An ideal type featureqof HR management is theaassumption of a developmentalqapproach to employees, whichqappears to imply some formaof systematic management ofqthe assessment and augmentation ofqtheir ability, in relation toabusiness needs. Moreover, theqother major feature or outputqof the HR management model isathe emphasis on commitmentqto the goals of the organization,ain which techniques of rewardqand career development mayqplay a significant part, andafor which HRP may beqimportant.

HRP is principally concerned with assessing an organization’s position in relation to its labour markets and forecasting its likely situation in years to come. Estimates of supply usually start from a scan of the external environment. Either to get a feel for the likely trends and changing patterns of skill availability for the established company, or to serve as a more precise guide for a start-up firm or one seeking a new location. It can also be of assistance when recruiting a particular type of employee where more detailed information is needed. The details of education, skill and experience, though not always easy to acquire, are more straightforward than those of attitude, which may be more important in human resource terms. Information on this may derive largely from stereotyped hearsay, but can be more accurately assessed through appropriate recruitment techniques.

The data on the internal supply of labour are much more readily available, in terms of age, job history, pay and conditions, qualifications, sex, race, etc. Information on attendance, discipline and performance may also be available, where relevant, and as the result of other forms of assessment. From these data, predictions can be made of likely staffing levels and of retirement patterns by projecting forward current age profiles by three years, five years, or ten years, to see if they match a normal distribution curve, external population trends, or any other preferred pattern. Although this represents the simplest planning technique and can help to indicate likely forthcoming shortages, cost savings, or succession problems, such projections are neglected surprisingly often.

The unknown aspect of internal supply is the weakness of all human asset accounting, the fact that people choose to leave. Certain patterns are generally known, such as that young people are more likely to leave than older, and people in low-level rather than responsible jobs. Increased levels of absenteeism may be a sign of impending dissatisfaction and intention to leave, but may also demonstrate patterns of workplace culture or managerial control systems.

Estimation of internal labour demand, although apparently easier, is frequently the more difficult aspect, in view of many uncertainties of recession and the rapid changes that are taking place. Turbulence in the product or market environment may be the norm now, even for public sector organizations, which are increasingly subject to privatization and market testing, as well as in many smaller businesses where once apparently stable markets were found.

The ability of HR managers to predict accurately how many people will be required and with what skills depends on a number of factors. First, there is the time-scale that the forecast is intended to cover. Except in the most turbulent of environments, it is possible to look forward one or two years and make reasonable assumptions about what staffing requirements will be. It gets far harder when time-scales of three, five or ten years are contemplated. This is because relevant technological or economic developments that will have a profound effect on the level and kind of activity carried out by the organization may not yet even have been contemplated.

The other major variable is the nature of the activities carried out by the organization. Organizations in relatively stable environments are able to forecast their needs with far greater confidence than organizations operating in inherently unstable conditions.

There are different approaches to forecasting demand; most mathematical and statistical techniques used in demand forecasting are concerned with estimating future requirements from an analysis of past and current experience. A number of distinct approaches are identified in the literature; including time series analysis, work study and productivity trends. Time series or ratio-trend analyses look at past business patterns and the numbers of people employed in different roles to make judgments about how many will be required to meet business targets in the future. Such an approach is straightforward and thus only suitable in relatively stable business environments. The work study approach has a different basis. Here, instead of assuming that the ratio of business to staff will remain broadly constant, special studies are undertaken of individual tasks or processes carried out by the organization in order to establish the numbers required to complete them most effectively and efficiently. The method is thus suitable in situations where there are no clear trends in the past to examine.

External and Internal Influences on HRP

The increasingly turbulent and more fast-changing business environment is affecting the ways in which today’s organizations conduct HRP. It is therefore of interest to investigate more specifically what not only the external factors are but also the internal factors influencing HRP.

External Influences on HRP

Today’s dynamic environment, filled with global competition and business discontinuities, define the arena in which HRP must flourish. The need for analysis of changing scenarios, therefore, has to be an integral part of the HRP process.

The first step in HRP is usually the "environmental" scan. If this review has not already been carried out in some depth as part of the formulation of corporate strategy, consideration of critical trends may be a major contribution, which the HRM function can make to the organization.

The growing internationalization of business in the face of changing patterns of world trade, the emergence of new competitors and new markets and changes in the older industrialized countries, all have some impact on the labour markets of even the smallest firm trading in national market.

Most larger and medium-sized companies are, however, likely to be trading internationally in some way and will need to understand the labour markets in those countries, if they are to recruit staff abroad or if they expect to send their own staff to work there. The whole issue of international management development has major implications for strategic planning and for human resource forecasting and implementation. Evidence so far suggests that there are many inadequacies in both planning and implementation of management mobility, and that there is a widespread reliance on ad hoc use of expatriate managers.

An awareness of population trends is critical in understanding labour markets, and national population statistics are readily available. The planning to take account of demographic trends is not often done early enough. Also, a lack of advance planning tends to increase labour costs, as firms have to increase wages and salaries in order to retain staff or poach them from other firms.

Public policy emphasis on training, the co-ordination of a plethora of national vocational qualifications, and the setting of national education training targets all mean that some aspects of estimating external competence supply will be improved. Data on graduate qualifications are readily available, but interpreting likely trends in supply and demand is complex.

Demand-side factors stem mainly from business strategy, but need to take account of other skills that may be needed; for example in physical environmental awareness and the implications for products or processes and energy use; or in marketing, in concepts of relational marketing, customer education and general supply chain management. If mergers or acquisitions are expected, is new expertise needed to handle that? Or if organization structures are changing to create flatter organizations or new internationalized business market divisions, are there skills available in managing networks, managing projects or managing cross-culturally? Firms that use competence-mapping techniques may be able to provide data relevant to HRP, but where these activities are done by different people and/or at different locations, such linkage cannot be made.

Consumer attitudes tend to be surveyed more regularly than those of employees, but shifts in employee preferences are perceptible, often on a generation basis. The attitudes are found particularly among "knowledge-workers", and may be modified over-time by experience of recession and widespread white-collar unemployment. If a major difference between HRP and manpower planning lies in its emphasis on motivating people, understanding the starting point and changing the direction of employee attitudes could become more important.

The incorporation of both individual and organizational needs is therefore the major challenge for HR planners and should be reflected in the application of the planning process to the ways in which people are employed.

Internal Influences on HRP

In the context of the supply-demand equation, a range of internal factors require consideration for the purpose of evaluating existing or expected supply from within the organization. The supply side issues that HRP should address include the organization’s policy on growth from within or by means of outside recruitment; the policy on pay and remuneration, and the organization’s view on employee development. In this context, the conventional human resource plans take into consideration a series of supply side statistics, such as company growth, the age distribution of employees, skill levels, turnover ratios and the overall profile/distribution of employment across job categories. Among all these, age and retirement are emerging as important considerations in workforce planning in the current socio-economic climate. These factors (i.e. age and retirement) are strongly related in the sense that retirement takes place on the attainment of a certain age. Additionally, HRP has to take into consideration the total corporate plan, which would incorporate, set out or anticipated productivity standards.

The more contemporary approaches to HRP need to consider current or expected changes in the make-up and aspirations of the workforce. Long-term macro-level forecasts seem to suggest that people in the future will have even greater desire for self-development and discovery. These aspirations may trigger requirements for changes in existing corporate structures and management systems. As a result, human resource professionals and their organizations may capitalize on the advantage of potential employees who may be creative and self-motivated, but they will also face the problem of developing an environment that will attract and hold such individuals.

Different Types of Human Resource Planning

In the light of different aspects concerning supply and demand of competence as well as different factors influencing HRP, this section will present various methods for carrying out HRP.

Succession Planning

One adaptation of traditional HRP that takes place mostly in larger organizations is the development of a succession planning function. The chief executives often see this function as the major rational for any form of HRP. While in some organizations it may be focused mainly on the few top positions, the need to consider at least a five-year-period can mean that it becomes a more significant operation, and eventually drives a whole Management recruitment and development programme. Succession planners are mainly interested in ensuring that their employer has enough individuals with the right abilities, skills and experience to promote into key senior jobs, as they become vacant. Succession planning differs from traditional HRP in the sense that the succession planning process covers a narrower group of employees but does so with a higher degree of intensity. As succession plans concern relatively few employees, they can be considerably more sophisticated. The time span is also longer than that of traditional HRP. Succession plans often involve forecasting and planning the progress of individuals 20 years ahead or more.

Career Planning

This type of HRP is by some viewed as a more fashionable term to use than succession planning and ostensibly is more individually focused. Furthermore, like succession planning, broadly interpreted, it requires an understanding of processes that can integrate an individual’s characteristics and preferences with the implications of: organizational culture, values and style, business strategy and direction, organizational structure and change, reward systems, training and development system, appraisal and promotion systems. Career planning emphasizes much more on the individual’s responsibility for his/her own career development. ‘Mentoring’ and ‘coaching’ systems, whether formal or informal, may be introduced to assist in this. The common problems associated with this kind of planning are related to key people leaving, or to managers’ lack of broad experience. The requirements of different types of organizations (static; fast growing; international etc.) for detailed planning clearly vary. Storey further states that the need for creating ‘bridges’ between different occupations and for the identification of ‘development positions’, are both significant techniques in career planning. The predominant influence of this type of planning is that of the organization’s needs, as interpreted by particular managers, at certain phases of its development and it is said that career planning may be interpreted very differently by those who experience it.

Contingency Planning

Contingency planning involves planning possible responses to a variety of potential environmental scenarios, and the result is that HRP effectively switches from being a reactive process undertaken in order to assist the organization in achieving its aims. It becomes a proactive process undertaken prior to the formulation of wider organizational objectives and strategies. The main purpose of contingency planning in the HR field is the provision of information on which decisions about the future directions the organization takes are made.

Competency Planning

The basic principle of this method is to shift away from a focus on planning for people and instead concentrate mainly on skills. Instead of forecasting the future supply of and demand for employees, skills planning involves predicting what competencies will be needed one to five years ahead, hence, leaving open the question of the form in which these will be obtained. Further, skills-based plans incorporate the possibility that skills needs are to be met either wholly or partially through the employment of short-term employees, outside consultants, as well as by permanent members of staff.

Soft Human Resource Planning

Soft HRP can thus be seen as a broadening of the objectives associated with the traditional approaches of HRP. Soft HRP accepts that for organizations to succeed in the current environment they need more than the right people in the right place at the right time. In order to contribute to the creation of a successful organizational culture, they also need to make sure that people have an appropriate outlook and set of attitudes. Systematic soft HRP organizations will be alert to long-term shifts in attitudes to work among the labour force in general, allowing them to build these considerations into their general planning processes.