ÿþChapter 2  

HR PLANNING  

I. Introduction to HR planning  

II. Forecast HR demand  

III. Forecast labor supply  

IV. Balance labor demand and supply  

I. Overview on HR planning  

1. Definiton  

" Human resource planning is a process of evaluating, estimating HR demand to meet organization s business objectives and making labor plans to achieve these objectives.  

" Human resource planning is a process by which an organization ensures that  

" it has the right number and kinds of people  

" at the right place  

" at the right time  

" capable of effectively and efficiently completing those tasks that will help the organization achieve its overall strategic objectives  

Contents of Human Resource Planning  

" Forecast human demand  

" Forecast human supply  

" Balance human demand and supply  

2. Roles of HR planning  

" Takes central role in strategic HRM.  

" Directly affect on implementation of firm s business strategy.  

" Be base for employment, training and HR development activities.  

" Support to implement and harmonize HR activities.  

3. Types of HR planning  

" Long-term planning  

" Intermediate planning  

" Short-term planning  

" Long term planning (>=3 years)  

o Bases: Mission, vision, primes, goals, overall objective, overall strategy..  

A mission statement defines what business the organization is in, including  

Øð why it exists  

Øð who its customers are  

Øð Goals are generally defined for the next 5-20 years.  

Øð Forecast human demand for future through consider and evaluate inside and outside organization s environment.  

Øð For organization with large scale, specific activities, high skill labor requirement, HR planning may be longer (5, 10, 20& years).  

Øð Intermediate planning (1-3 years)  

Øð Base on specific objectives need to achieve: Product quantity, Revenue, market shares&  

Øð Forecast human demand for each activities, quantity of labor movement between divisions of organization, changes in human productivities.&  

Øð Short term HR planning (<= 1 year)  

Øð Base on specific objectives and operation plan  

Øð Estimates human demand for organization base on experiences, skills to meet organizational objectives and operational plans.  

4. Factors affecting HR planning  

a. External factors  

b. Operational factors  

c. Internal factors  

A. External Influences on HRM  

" Dynamic environment  

" Laws and regulations  

" Labor unions  

" Management thought  

B. OPERATIONAL FACTORS  

" Competitors  

" Input supplier  

" Potential competitors  

" Product substitution  

C. Internal factors influences HRM  

" Organizational goals/objectives  

" Business strategies  

" Organizational culture  

" Mgt experiences of managers and lead style  

" Ability to use management tools/equipments  

" Position and development potential of organization  

" Internal information system  

" Organizational union  

II. Forecast of labor demand  

" Labor demand is quantity and quality of labor needed to achieve a certain quantity of product or service of organization in a specific time period.  

Forecast of labor demand in short term  

" Steps:  

o Define quantity of works/products need to be done  

o Define labor expenses per unit of product/work (hrs)  

o Count for total labor expenses for each type of work and product (hrs)  

o Transfer total wrk hrs to labor needed for each work/product  

o Sum up total labor needed for each work/product.  

" Estimating methods:  

o Base on labor expense  

o Base on labor productivity  

o Base on norms and standards of labor  

Forecast of labor demand in short term  

a. Base on labor expense  

b. Base on labor productivity method  

c. Base on norms and standards of labor  

Forecast labor demand in long term  

Forecast methods  

o Base on labor demand of each division/unit  

o Base on average labor demand  

o Labor expense standard per unit product  

o Statistical method  

o Expert method  

Forecast labor demand in long term  

a. Base on labor demand of each division/unit: Base on objectives each division/unit, the manager of that division forecast labor requirement to fulfill objectives in long term  

b. Base on average labor demand: Base on yearly labor requirement of previous year to estimate labor requirement for planning year.  

c. Labor expense standard per unit product  

d. Statistical method  

e. Expert method  

" Experts in HR base on their own experiences and socio economic conditions of organization to forecast labor required in long-term  

III. Forecast labor supply  

" Labor supply of an organization is number of laborers that are available and willing to work for the organization  

" Supply forecast includes:  

o External scanning  

o Internal scanning  

1. Internal scanning  

" Classify labor-force within organization  

" Analyze the labor-force of organization:  

o Age  

o Gender  

o Working experience  

o Academic level  

o Function  

o Professional skills  

a. Analyze labor force by age:  

o Make education plan HR development  

o Make employment and retirement plans  

b. Analyze labor force by gender:  

How the assigned works match gender characteristics  

c. Analyze labor force by experience :  

o The working experience reflects number of working years of a person at different works.  

o The working year reflects how a person experience in a certain work.  

d. Analyze labor force by academic level:  

To define demand for education. The labor-force can be classified by:  

" illiterate  

" Under primary school  

" Primary school  

" Secondary school  

" High school  

e. Analyze labor force by function  

" Direct working employees  

o Worker: main worker, assistant worker, service worker  

o Apprentice  

" Indirect employees  

o Technical employee  

o Economic management employee  

o Administrative employee  

g. Analyze labor force by professional level  

" Analyze how the worker level match work level at each type of work  

o Work level reflects the work characteristics by level of complexity, technical requirements, importance, noxious level.  

o The worker level reflects the professional level of the worker, including the theoretical knowledge and practical experience that the worker need to have to fulfill the work at the certain level of complexity.  

" Analyze the usage of labor-force by professional level  

h. Analyze labor-force by occupation/profession  

Comperation of labor required to meet production to labor available  

2. External scanning  

" The changes in population scale and structure, birth rate, dead rate; natural population increase rate.  

" Analyze scale of labor force  

" Analyze quality of labor force  

" Migration situation  

" Predict labor force coming back from foreign countries.  

" & .  

IV. Comparing Requirements and Availability  

1. HR requirements > HR availability (lack of labor)  

" Education & re-education  

" Transfer, promotion  

" Work overtime  

" Part time employment  

" Do subcontract with other organizations  

" Employment from outside  

2. HR requirements < HR availability (Surplus of labor)  

" Transfer labor from surplus divisions to others that HR are lack.  

" Stop employ more  

" Sharing work, reduce working hrs  

" Encourage early retirement  

" Be on leave without salary  

3. HR requirements = HR availability  

" Transfer and promotion within organization  

" Do replacement plan  

" Training and skills development  

" Employment from outside to replace moved out positions.