UNIVERSITY OF EDUCATION – WINNEBA

SCHOOL OF BUSINESS

Human Resource Planning and the

Labour Market

BPS 241 - HUMAN RESOURCE MANAGEMENT

Lecture 4
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 Lecture 4 Outline
 What is the Labour Market?

 What is Human Resource Planning?

 Processes of Human Resource Planning

 Why is Human Resource Planning important?

 Objectives of Human Resource Planning

 Benefits of Demand and Supply Forecasting

 Determining Labour Surplus or Shortage

 Human Resource Planning at Different Organizational Levels

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 What is the Labour Market?
 A labour market is the mechanism through which human
labour is bought and sold as a commodity and the means
by which labour demand (the number and type of available
jobs) is matched with labour supply (the number and type of
available workers).

 The labour market constitutes the systematic relationship that

exists between workers and work organisations.

 In order to achieve its strategic objectives, a major concern for

an organisation is to ensure that it has the right people with the
right skills, knowledge and attributes in the right positions.
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 Human Resource Planning
 Human Resource Planning (HRP) is both a process and a set of
plans on how organizations assess the future supply and demand
of HRs.
 An effective HRP also provides mechanisms to eliminate any gaps
that may exist between supply and demand.
 Thus, HRP determines the members and types of employees to be
recruited into the organization or phased out of it.
 HRP process often requires periodic readjustments as labour
market conditions change.
 HRP as a process examines firms’ future HR need and it involves:
 Identifying and acquiring the right number of people with the proper
skills
 Motivating them to achieve high performance
 Creating interactive links between business objectives and resource
planning activities 4
 Human Resource Planning Process: Process I
All effective HR planning shares certain features. It is generally agreed
that HR planning involves four distinct phases or stages:

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 HR Planning Process: Process II
Strategic Planning Human Resource Demand Human Resource Supply

Technological forecasts Annual employment Existing employment

Economic forecasts requirements inventory
Market forecasts Numbers Compared After application of expected
Organizational planning Skills with loss and attrition rates
Investment planning Occupational categories
Annual operating plans

If none
Variances End

If surplus If shortage

Decisions Decisions
Action
Layoff, Overtime,
Decisions
retirement, recruitment,
etc. etc.

End End
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 What is HRP?
 HRP is a sub-system of total organizational planning.
 HRP facilitates the realization of the company’s objectives for the
future by providing the right type and number of personnel.
 HRP is also called Manpower planning, Personnel planning or
Employment planning

Why is HRP important ?

 Even an imperfect forecast is better than none at all.
 Anticipating needs – prepare for the future gives you an edge
 Address potential problems leads to avoidance of skill
deficiencies.
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 HR Planning
 In simple words, HRP is understood as the process of
forecasting an organizations future demand and supply of the
right type of people in the right number.
 After this, the HRM department can initiate the recruitment and
selection process.
 Effective HRP ensures that the organization has:
 Right Number
 Right Skills
 Right Place
 Right Time
 Right number of people with right skills at right place at right
time to implement organizational strategies in order to achieve
organizational objectives 8
 Objectives of Human Resource Planning
 Ensure optimum use of human resources currently employed;
 Avoid imbalances in the distribution and allocation of human
resources;
 Assess or forecast future skill requirements of the
organization's overall objectives;
 Provide control measure to ensure availability of necessary
resources when required;
 Control the aspect of human resources;
 Formulate transfer and promotion policies
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 Human Resource Forecasting

 HR Forecasting attempts There are three major steps to

to determine the supply and forecasting:
demand for various types of 1. Forecasting the demand for
human resources, and to labour
predict areas within the
organization where there 2. Determining labour supply
will be labour shortages or
3. Determining labour
surpluses.
surpluses and shortages

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 Human Resource Forecasting
 Demand forecasting is the process of estimating the future
quantity and quality of people required.
 Demand forecasting must consider several factors both
internal and external.
 Among external factors are competition(foreign and domestic),
economic climate, laws and regulatory bodies, changes in
technology and social factors.
 Internal factors include budget constraints, production levels,
new products and services, organizational structure and
employee separation.
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 Forecasting Human Resource Requirements
DEMAND ANALYSIS
(Trying to predict future staffing needs)
- Managerial Estimates - Sales Projections
- Simulations - Vacancy Analysis (projected turnover)
SUPPLY ANALYSIS
(Predicting Worker Flows and Availabilities)
 Succession or Replacement Charts
 Human Resource Information Systems (HRIS).
 Transition Matrices (Markov Analysis)
 Personnel / Yield Ratios - How much work will it take to recruit one
new accountant? 12
 Benefits of Demand Forecasting
Demand forecasting helps to:
 Quantify the jobs necessary for producing a given number of
goods
 Prevent shortage of people where and when they are needed
most
 Determine what staff-mix is desirable in the future
 Monitor compliance with legal requirements with regard to
reservation of jobs
 Assess appropriate staffing levels in different parts of the
organization so as to avoid unnecessary costs
 Determining Labour Supply
Predicting Worker Flows and Availabilities
 Supply forecasting measures the number of people likely to
be available from within and outside an organization.

 Supply forecasting can be effectively carried out in an

organisation after making allowance for the following
 Absenteeism
 internal movements and promotions
 wastage and changes in hours and
 Changes in other conditions of work.
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 HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)
PERSONAL DATA
Age, Gender, Dependents, Marital status, etc.
EDUCATION & SKILLS
Degrees earned, Licenses, Certifications
Languages spoken, Specialty skills
Ability/knowledge to operate specific machines/equipment/software
JOB HISTORY
Job Titles held, Location in Company, Time in each position, etc.
Performance appraisals, Promotions received, Training & Development
MEMBERSHIPS & ACHIEVEMENTS
Professional Associations, Recognition and Notable accomplishments
PREFERENCES & INTERESTS
Career goals, Types of positions sought
Geographic preferences
CAPACITY FOR GROWTH
Potential for advancement, upward mobility and growth in the company 15
 Determining Labour Surplus or Shortage
 Based on the forecasts for labour demand and supply, the
planner can compare the figures to determine whether there
will be a shortage or surplus of labour for each job category.

 Determining expected shortages and surpluses allow the

organization to plan on how to address these challenges.

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HRP at Different Organizational Levels
 HRP may broadly be carried out at Corporate, divisional
and plant levels.

 It is better for HRP to start at the lowest level and then

move upward.

 If personnel lower down in the organization start the

following process, the organization shall reach the benefits
of thinking of persons who are more familiar with the day to
day problems.
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Human Resource Planning Process Mapping

Business HR Policy HR Recruitment

Planning Planning Selection

Performance Compensation Talent Training

Management Management Management Development

HR Systems Data Employee Occupational

Management Relations Health and Safety

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 HRM GROUP ASSIGNMENT ONE
REQUIREMENTS
 Presented on Group Basis
 Write-up for each question should not exceed 2 pages.
 Thus entire assignment should not exceed 6 pages
excluding cover-page
 Type-written and comb-bound with names and index
numbers of all Group members.
 References must be duly attached and this excludes
the page document.
 Deadline for Submission is 8th July 2024 by 4.00pm
 Lateness is strictly prohibited. 19
END OF HRM LECTURE 4

ANY CONTRIBUTION OR
SUGGESTION?

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