Chapter 2: Human

resource planning

Presentation prepared by
Troy Fuller
Edith Cowan University

© John Wiley and Sons Australia

 Learning objectives

1. On successful completion of this slide set, you will

be able to:
a) Explain the relationship between strategic
HRM planning and operational HR planning
b) Explain the importance of HR planning
c) Identify key environmental influences on HR
planning
d) Outline the basic approaches to HR planning
e) Describe ways of forecasting HR requirements
f) Describe requirements for effective HR
planning.
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 Human resource planning (HRP)

1. HR planning is best described as ‘employment planning’.

2. The process of systematically reviewing human resource

requirements to ensure that the required number of
employees with the appropriate knowledge, talent, skills
and abilities are available when needed.

3. HR planning depends on overall strategies of company:

a) Retrenchment (reduce workforce)
b) Stability (do not hire more employees)
c) Growth (Hire more employees).

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Organisational strategy and HR planning

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 Class Discussion 1: Importance of HR
planning

Group Discussion
Question:
Why is it important for organisation to do
HR Planning?
List the advantages of engaging in HR
Planning.

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 Importance of HR planning

1. HR planning = systematically identifies what must be done

to guarantee the availability of the human resources
required by an organisation to meet business objectives.

2. HR manager should know the demand and supply side of

employee.

3. ensures that:
a) available talent is correctly allocated
b) labour costs are controlled
c) the number of staff is appropriate
d) talented employees are retained.
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 Current HR planning issues

1. Supply side-Scarcity of talent

2. Balancing short and long-term needs of employees

3. Globalisation- labour market is changing

a) Movement of labour internationally (labour mobility)eg
migrant workers (Fiji people going to Aust & NZ),
Seasonal workers
b) The ‘brain drain’
4. More Women in the workforce
a) Flexible work practices and family support
b) Declining birth rates – Western countries. Eg Japan
(need to understand demographic issues) © John Wiley and Sons Australia
 Forecasting future HR requirements

1. Three forecasts are needed:

a) demand for human resources within the
organisation;
b) supply of external human resources to the
organisation;
c) supply of internal human resources (within the
within the organisation).

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Class Discussion 2: Internal vs ExternaI
Hiring

Question:
(a)What the advantages of hiring people internally
from organisation?
(b)What the disadvantages of hiring people internally
from organisation?
(c)What the advantages of hiring people externally
from organisation?
(d)What the disadvantages of hiring people externally
from organisation?

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 Approaches to HR planning

1. Quantitative methods
i. Use statistical and mathematical techniques
ii. Mainly used by theoreticians and professional
HR planners in large organisations.
2. Qualitative methods
i. Use expert opinion (usually a line manager) to
predict future needs and actions
ii. Focus on evaluations of employee
performance, promotability, Succession plan. .

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 HR planning and HR forecasting
relating to internal supply and demand

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Qualitative forecasting – internal demand

1. Expert opinion- Usually gather information from line

manager.
2. Skill Inventory
– Consolidates information about all employees to identify
those suitable for opportunities and assess short and
long-term organisational requirements.
3. Replacement charts
– Visual representations of present incumbents and
potential replacements for given positions.
4. Succession planning
– Plan to promote people to take jobs when incumbents
retire akes a long-term view of organisational needs.
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Qualitative forecasting – internal supply

1. Skills inventory
– Consolidates information about all employees to
identify those suitable for opportunities and
assess short and long-term organisational
requirements.
2. Replacement charts
– Visual representations of present incumbents
and potential replacements (or lack thereof) for
given positions. See next slide.
3. Succession planning

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Example Replacement Chart

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Quantitative forecasting – internal demand

1. Trend analysis
– Also called Time Series Analysis. Makes
predictions by projecting past and present
trends into the future.
2. Econometric modelling and multiple predictive
techniques
– Complex computer models which simulate
future events based on probabilities and
multiple assumptions.

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Quantitative forecasting – internal supply

1. Turnover analysis
– Detailed examination as to why people leave an
organisation (for example: retirement,
resignation, illness, retrenchment, termination).
2. Markov analysis
– A mathematical technique used to forecast the
availability of internal job applicants. A matrix is
developed to show the likelihood of employee
movement (internally or by leaving the
organisation).
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Factors affecting the external supply of
human resources

1. The HR manager must be constantly alert to

external trends, including:
a) The ageing population
i. Eg 2 million Australians aged 65 or older;
this will double in twenty years
b) Increase in female participation rates
c) Increase in school retention rates
d) Immigration changes
e) Casualisation of the workforce
i. Contingent worker = temporary or part-
time
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 Outsourcing

• Outsourcing
– Subcontracting work within the country - to an outside
company specialises in and is more efficient at doing
that kind of work.eg SCC- grass cutting
– International outsourcing is called offshoring.- eg Call
centres – mind pearl, etc.
– Head Hunting

Class Discussion 3.
1. What is the advantage of Subcontracting / or
Offshoring work ?
2. What is the disadvantage of Subcontracting / or
Offshoring work
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Some advantages are:
a) To free up resources
b) To increase workplace flexibility
c) To access additional capital
d) To promote entry to new markets.

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 Successful HRP – the role of HR

1. Human resource planning must be understood

and utilised.
2. Top management must be supportive.
3. Don’t use too complex a system, too soon.
4. Regular and healthy communication between
stakeholders is needed.
5. Strike a balance between qualitative and
quantitative approaches.

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 Summary

1. Effective human resource planning supports

organisational effectiveness.
2. A measure of success is whether the right people
are available in the right place at the right time.
3. Human resource planning must be fully integrated
with the organisation’s business planning.
4. HR managers must be willing and able to
demonstrate the success of human resource
planning.
THE END
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