Human Resource Planning Process - Essay Example

Introduction Human resource planning entails identifying the current and future skills gap in the organisation and identifying methods of meeting the skills requirement in the organisation. It is estimated that there are about 30 million workers in the United Kingdom from a total population of about 60 million citizens. The labour market includes the demand of labour by the firms and supply of labour by the households. In a mixed economy, the trade unions and government legislation affects the labour market unlike in free labour market where the wage rates determine both the supply and demand for labour in the economy (Mathis and Jackson 2012). Human resource planning involves identifying the forecasts of labour demand and labour supply in the market. Some of the techniques that can be utilized in forecasting the labour requirement in the organisation include sales projections, managerial estimates, simulations and analysis of employee turnover in the organisation (Briscoe 2008). The human resource managers can utilize succession charts, labour market analysis, personnel ratios and skills inventories in forecasting the labour availability (Reddy 2005). This process is geared at ensuring that there is an adequate number of qualified persons at all the time to perform the jobs that aim at meeting the organisational objectives. Kleynhans asserts that “human resource planning is depended on the labour market outlook” (2006 p 69). Organisations are currently monitoring the skills in the labour market, the skills shortage and changing trends (Briscoe 2008). Some of the objective of human resource planning process is to ensure there is enough manpower and proper utilization of manpower in the organisation (Dawra 2003). The process should forecast the future requirements of the human resources at all skills levels in the organisation and access the shortage or surplus at different periods. Another objective is to analyze the impact of changing work processes and technology on the human resource requirements and maximize the return on investment in the people resources. Since employees retire, resign or die, human resource planning process helps the organisation deal with employee turnover and meets both short term and long term people requirements in the organisation (Pattanayak 2005). Some factors that influence the process include the organisational business strategies, growth cycles, and time horizons, quality of human requirement forecasting information, environmental uncertainties and the nature of jobs in the organisation. Human resource planning will anticipate the redundancies, the recruitment levels and determine the training needs in the organisation (Dawra 2003). Some commonly used methods of labour requirement forecasting include managerial judgments, work study methods, ratio-trend analysis and mathematical models (Reddy 2005). Labour supply in the organisation can be either internal or external. Internal sources of labour supply include promotions, job rotations and training the existing employees on new roles. External sources include the external labour market whereby employees can be employed from educational institutions, referrals and outsourcing (Pattanayak, 2005). Reviewing the human resource audits and making future projections can be utilized to understand the internal human resource supply (Reddy 2005). The internal human resource requirements can be affected by temporal absences, turnovers such as dismissals and resignations and also permanent absences such as death, retirements and disability (Mathis and Jackson, 2012). The simplest method of forecasting the future human resource supply is the trend analysis that assumes that ratios of employee turnover and movements will be stable in the future. The labour patterns include retirement patterns and hiring patterns that assume the same patterns will remain stable and thus predict the future manpower requirements of the organisation. Another model of forecasting the supply is the competency models that aim at matching the skills inventories in the organisation with the competencies needed for each particular job (Dawra, 2003). According to Mathis and Jackson (2012 p 60) “Competencies encompass the knowledge, skills and behaviors together with abilities that are required to effectively accomplish a particular task in the organisation”. Replacement charts can be utilized to provide an overview of the movements of employees in the organisation like the vertical movement that involves promotions and horizontal movements that involve job rotations and job enrichment in the organisation (Reddy 2005). Analysis of the labour market is fundamental in human resource planning process and determining the supply of labour in the organisation. The human resource managers should investigate the changes in the labour market like the wage levels, unemployment and skills level in order to determine the supply of labour (Dawra 2003). The human resource managers should analyze the labour market demand and supply at the same time in order to plan for the current and future human resources needs. Some factors that influence the labour market demand for include changes in the external business operating environment such as the political, social and technological changes (Caruth, Caruth and Pane 2009). For instance, the advancement in technology may reduce the need to employ more workers in manual jobs since most of the business processes are automated. Advancements in technology and implementation of new working processes and procedures in the organisation will require organisations to either recruit people skilled in the new technology or train the internal staff on the new technology (Kearns 2012). Social changes such as changes in consumer demand due to changing tastes and preferences will require the organisation to employ more people due to increase in the work load in the organisation (Rothwell and Kazanas 2003). Changes in the internal business environment such as mergers and restricting of operations that is occasioned by harsh operating environment due to slow down in economic growth and product demand will force the organisation to downsize the workforce thus leading to layoffs and proper utilization of the available human resources (Mathis and Jackson 2012). Changes in political and legal environment of the labour market such as new employment laws and remuneration laws such as minimum wages also need to be considered in human resource planning process (Kearns 2012). National economic restricting such as changes from agricultural to industrialized economy or shifts from manufacturing to a service-based economy may also affect the future supply of labour in certain economic sectors. Economic conditions prevailing in the economy such as the level of interest rates, the exchange rate movements and unemployment will impact on the demand of the products of the organisation thus affecting the human resource planning capability (Kearns 2012). The human resource managers should monitor the demographic changes in the labour markets. These include the birth rates, the life expectancy and the retirement ages (Randhawa 2007). The labour market is dynamic thus long term demographic changes in the population will impact on the supply of labour. For instance, many of the Western countries are characterized by ageing population with many workers selecting voluntary retirement. The new entrants in the labour market in some economies have declined due to low birth rates since many families cannot afford to care for a large family (Kleynhans 2006). Another demographic trend which human resource managers should keep monitoring is the increased participation of women in white-collar jobs since many have taken leadership positions in big organisations (Rothwell and Kazanas 2003). For instance, some countries have enacted gender equality in employment laws that require both genders to be availed equally opportunities in all employment matters like recruitment, remuneration and promotions in the organisation (Dawra 2003). The organisation should monitor the gender composition of the workforce and implement human resource strategies that will cater for increased participation of dual-career couples and single parents in the organisation (Kearns 2012). The organisation should also monitor and analyse the ethnic composition of the potential workforce in the labour market. Migration of people has changed the ethnic composition of labour market and increased the broad range of experiences and skills available. Globalizations in trade, the need for travel and education in different countries have changed the cultural diversity of the labour markets (Turner 2002). Migration of people will alter the skills and knowledge in the labour market since many people migrate in search for better employment opportunities. International agreements on movement of labour such as the European Union will also increase the availability of qualified employees and diversity in the organisation. Migration will have a significant impact on the supply of labour since most of the migrants tend to be of the working age and tend to come from low income countries thus reducing the labour costs incurred by the organisations (Singh 2008). Another important factor in the labour market analyses that influences the supply of labour is the trade-off between work and leisure in the economy. The choose between work and leisure is affected by several factors such as the age of the individual, the income taxes, the number of dependants and the non-employment income of the individual. “Countries with high unemployment benefits and pensions tend to have a low labour supply due to high demand for leisure by the citizens (Mathis and Jackson 2012 p 112). Trade unions also play a critical role in the labour market. Workers unions protect the interests of workers by ensuring better working conditions and fair wages to all employees. Trade unions engage in collective bargaining agreements and labour dispute resolutions (Kleynhans 2006). Trade unions attract supply of labour since the members enjoy being part of the union since their rights and interests in employment are protected. Trade unions can also limit the supply of labour by withdrawing labour during go slows, strikes and limiting the number of working hours such as overtimes (Saiyadain 2009). The wage rates prevailing in the labour market will also affect human resource planning process and determine the supply of labour. Highly educated and skilled labour force will demand high wage rates to compensate for their skills and experience. If the wage rates are high, the organisation may face human resource shortages since the labour costs may be unaffordable depending on the economic performance of the organisation (Saiyadain 2009). Government policies in the labour markets such as employment laws also affect the supply of labour to an organisation (Williams 2006). Some countries restrict encourage employers to give priority to local citizens and limit the employment of foreigners. Government policies on education and training of workforce in the labour market will also influence the availability of qualified employees in some sectors. Some countries provide basic education and training to all citizens through free education and subsidies to organisations that train their workers (Randhawa 2007). The level of consumer incomes and social security benefits to citizens will impact on the ability to educate the population. Saiyadain, (2009 op 65) is of the view that “government economic and industrial policies may also alter the composition of skills in the economy”. For instance, some countries encourage education and skills development tin some industrial sectors like engineering courses to support the government efforts in industrialization of the manufacturing sectors (Caruth, Caruth and Pane 2009). Some factors that will determine the future demand for labour by organisations include the economic conditions prevailing in the economy. The increase in consumer incomes will lead to an increase in the demand of products and services in the economy, thus firms will have to expand in order to meeting the increased demand. The changes in technology like modern computing technologies have led to new demand of more skilled workers (Snell and Bohlander 2012). However, human resource planning process may be hindered by employee resistance to change since many are uncomfortable with new roles or training. It is also costly and time consuming process since money has to be committed in data collection on the labour market trends. Inadequate human resource planning information such as labour demand forecasts may hinder the attainment of the objectives of the process. Another hindering factor is uncertainties in the future economic conditions or changes in the labour market. The human resource managers cannot accurately predict the labour turnover or the external environmental changes such as new technology developments in the future (Williams 2006). Conclusion Proper human resource planning process will improve the staff-morale, encourage diversity, meet the seasonal fluctuations in labour needs, reduce the need for overtime, retain experienced personnel and improve the competitiveness of the organisation in the market (Snell and Bohlander 2012). Other benefits of human resource are to ensure enough pool of talented employees, improved employee productivity and compliance with government legislation on employment matters. Bibliography: Briscoe, D. 2008. International human resource management. London. Taylor & Francis. Caruth, D., Caruth, G and Pane, S. 2009. Staffing the contemporary organization: a guide to planning, recruiting, and selecting for human resource professionals. Westport, CT. Praeger Publishers. Dawra, S. 2003. Human resource development. 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