1. In formulating strategies, which method will you take, the quantitative or the qualitative? Support your answer. 2. Identify steps a firm may take to show the relationship between supply and demand of labor. Discuss your answer. 3. Due to some undesirable effects of layoffs, what other alternatives can employers consider to deal with oversupply of personnel? 4. Identify solutions an organization may do to resolve undersupply of personnel. . . . . Corporate Strategic Plan Know the purpose of your existence Specify long-term goals Define your values and principles Opportunities and threats Environmental scanning Industry/competitor analysis Strengths and weaknesses Forecast demand for employees Resources, people, process, systems Competitive strategy Action plan Strategy alignment Design, structure, and systems, among others Allocate resources Human Resource Planning Formulate management philosophy Create a healthy company culture Outline code of conduct Demographic trends Outside supply of labor Competitor benchmarking Personality and competencies Predict HR demand Predict HR availability and suitability Effectiveness and efficiency Productivity improvement programs External fit/alignment/internal fit Analyze demand and supply gap Termination and separation Enhancement programs Leadership, communication/change B Assessment of goals B Alignment of strategies to goals B Providing feedback Measure effectiveness of initiatives Keeping track of activities Companies do not take off by themselves. Practically every strategic planning decision has to take into consideration the people issues related to it. In other words, once the company has formulated its strategies, top-level management should make a decision as to the number and type of people who will implement the strategy. Obviously then, strategic planning and human resource planning jointly set objectives in relation to the firm's processes and human resources. THE PROCESS OF HUMAN RESOURCE PLANNING Organizational mission, goals, objectives, and strategic requirements Current manpower inventory Forecasting demand and supply 339 Decide action Employee plan Manpower gaps Figure 1. Step-by-step processes of human resource planning. PART III: The Pre-Hiring Stage: Human Resource Planning and Job Analysis 27 1. -23 2. Understand the organizational mission, goals, objectives, and strategicrequire Conduct a head count of present employees. 3. Know the future demand for employees. Conduct a skills inventory 4. 5. 6. each w approximate the need for manpower for existing positions. Investigate the so of supply of human resources. The sources can come from academic institu Determine the number of employees you currently have and how many you ac and people from other organizations seeking employment. need. Study the gap between demand and supply. Estimate the possible increase or decrease in human resources. The inc may come from new hires, contingent workers, transfers, re-instated employe Decreases may come from resignation, retirement, study leaves, dismissal, lay job abandonment, death, and other factors. Decide whether to hire or to downsize. If the number of employees is more t what is needed, then there is an oversupply of personnel. The action will be downsize. If the number of employees is less than what is needed, then there s undersupply of manpower. The action will be to recruit additional manpower. FACTORS THAT AFFECT HUMAN RESOURCE PLANNING 1. Company's goals, objectives, and strategies Predictin Predi progress. needs. A c probabilit two meth will event selected, QU use of n commor Tre give the employ number count c volume 2. Time spent for planning HR needs 3. Uncertainties of business activities 4. Exactness of forecasting manpower needs 5. Structural design of the company 6. Internal and external availability of manpower 7. Busin Sales Num Preparation period of positioning talents The abovementioned consequences are essential requirements for human resource planning to be effective; otherwise, plans will become useless and meaningless. Forecasting: A Key Component to Successful Human Resource Planning resource forecasting if they want to improve organizational efficiency. Forecasting involve In the present-day competition, firms do not have the luxury of avoiding huma predicting the company's future human resource needs. This process could be challengin and complex, but definitely vital to the long-term performance of an organization. Doing this requires a serious study of the strengths and deficiencies of the HR team so the won't end up experiencing surpluses or shortages of people. Managers need to regular planning activity. They should focus on these three major considerations: (a) predicting predict their HR needs and the core competencies of the firm as part of their strateg demand for labor; (b) predicting supply of labor; and (c) reconciling the gap their human resource needs, thus improving organizational effectiveness and increasing demand and supply of labor. Being deliberately mindful to each will help managers attai profitability. between precis trend stud or 30 If the it wo curr fore nun sca ma con Wo ne ou me Th Predicting a Firm's Demand for Employees Predicting the need for labor has been an essential indicator of a company's progress. No matter the size, the company will need to conduct a forecast of its labor needs. A complete forecast should append recent data, previous experiences, and other probabilities to be able to come up with a sensible and responsive HR plan. There are two methods of predicting HR needs: quantitative and qualitative. Organizational needs will eventually determine which method to use; however, no matter which method is selected, predicting HR needs should never be ignored, even by small companies. QUANTITATIVE APPROACHES. The quantitative prediction method covers the use of numerical information or mathematical procedures in analyzing data. The most commonly used approaches are trend analysis, ratio analysis, and regression analysis. Trend analysis is based on the concept that what has happened in the past will give the HR officer an idea what will take place in the future. Trend analysis ties past employment flows to subsequent labor needs. Managers chart trends that affect the number of employees based on certain variables such as sales volume and employee count during a certain business period. Table 4 shows the connection between sales volume and number of employees as basis in determining the future HR needs. Table 4. Sample Trend Analysis Year Business Factor 2009 2010 2011 2012 2013 Sales Volume (P) 10,500,000 8,800,000 7,900,000 9,500,000 10,200,000 Number of Employees 240 200 165 215 ? Ratio analysis is the process of anticipating future HR demands by calculating the precise ratio between certain variables. This method is considered more accurate than trend analysis. In determining a student-teacher ratio, let's assume that a university has 12,000 students and 400 professors; thus, the student-teacher ratio is computed as 12,000/400 or 30:1. This ratio indicates that for every 30 students, the institution needs 1 professor. If the university anticipates student enrollment to increase by 1,500 students next year it would need to hire 50 (1500/30) additional professors (assuming that none of the 500 current professors leave prior to next year). Regression analysis is identical to both trend and ratio analyses in such a way that forecasts are based upon the relation between certain predictors like sales volume and number of employees. In this method, the organization draws lines and marks called a scatter diagram. It then calculates a regression line which goes through the middle of the marks on the scatter diagram. Proper interpretation of the regression line will enable the company to determine the number of employees needed for each predictor or variable. QUALITATIVE APPROACHES. Unlike the quantitative methods that predict the workforce size through humerical information, qualitative methods predict future HR needs based on the opinions or gut feel of some selected members of the organization outside experts or others concerned with the future labor needs of the company. This method is often seen as subjective and judgmental hence, biases are most likely to occur. The Delphi Technique is a type of qualitative forecasting method that aims to minimize Dealing with Workforce Undersupply An undersupply of personnel indicates that there are more jobs than workers. If this happens, the first move of the company should be to hire additional employees. However, the company may consider the following alternatives: 1. Encourage overtime - Create another work shift - Job re-assignment -Strengthen retention program CHAPTER SUMMARY Human resource planning (HRP) is an HRM practice that helps managers anticipate the varying HR needs of a company in terms of acquiring, positioning, and utilizing employees. The aim of HRP is to aid managers place the employees where they are most fitted (qualification-wise) for the company to achieve its strategic goals. 2 Strategic planning is an organization's process of formulating and implementing its strategies and assessing the effects to its internal and external environment. Companies do not take-off by themselves. Practically every strategic planning decision has to take into consideration the people issues associated with it. Obviously then, strategic planning and human resource planning go hand in hand. 3. Certain factors could affect human resource planning, such as the company's goals, objectives, and strategies; time spent on human resource planning, uncertainties in the business scenario, preciseness of foreseeing HR needs, and the structural design of the company. 4. There are two methods of predicting the need for labor. One is the quantitative method, which involves the use of numerical information in analyzing data. The other one is the qualitative method which predicts HR needs based on the opinions and gut feel of some members of the organization and other external experts who may be familiar with the organization's HR needs. The most commonly used approaches under the quantitative method are trend analysis, ratio analysis and regression analysis; Delphi technique is a qualitative method of forecasting. UCCION QUESTIONS