Unit 2

HRM PLANNING AND

FORECASTING

HRM PLANNING
Present and future manpower requirements
Net human resource requirements
Mould, change and develop employees to meet

future organizational requirements

Attract and acquire human resources from the
market

Human Resource Planning Steps

1)Estimating future organizational structure and manpower

requirements
2)Auditing Human resources
3)Planning job requirements and job descriptions
4)Developing a human resource plan

Importance of HRP
Future personnel needs.
Helps in strategic planning
Creating high talented personnel
Global strategies
Foundation of personnel function
Increase investments in human resources
Resistance to change

Factors affecting HRP

Type and strategy of organization
Organizational growth cycle and planning
Environmental uncertainties
Time horizons
Type and quality of forecasting information
Nature of jobs being filled
Outsourcing

Human Resource Forecasting

Human resources forecasting involves projecting

labor needs and the effects theyll have on a business.

HR department forecasts both short- and long-term
staffing
Factors effect forecasting
i. projected sales
ii. office growth,
iii. attrition and other factors

HR Forecasting Continue
1. Benefits of HR Forecasting.
2. Methods of Demand Forecasting.
3. Methods of Supply Forecasting.
4. Forecasting Technique

Benefits of HR Forecasting.
1. Prevent understaffing and disruption to
operations.
2. Prevent overstaffing and subsequent costs
of employee layoff.
3. Allow efficient and effective use of other HR
functions.

Methods of Demand
Forecasting.
Judgmental
Mathematical
Statistical

Judgmental Forecasting
Conducting surveys of

operating managers to
estimate the number of
employees needed to support
current and future operations.

Best for short-run forecasts

and small and medium sized

organizations.

Mathematical Forecasting
1. Productivity Ratio
Average Sales or Production

Average Number
Operating Employees
Example: $50,000,000 in average sales over past
7 years 1000 operating employees = PR of
$50,000 per employee.

2. Staffing Ratio
Average Number of Operating Employees
Average Number of Support Employees
Example: 1000 Operating Employees

200 Staff Employees = 5 to 1 ratio

Therefore, if 1200 Operational Employees are

needed next year, 240 Staff Employees will be

required. (1200/5)

Statistical Forecasting
(Correlation-Regression Analysis)
Prediction Equation: Y = a + b (X)

Number of
Employees (y)
100
110
120
130
140
150
160
170

Sales Volume per Year (x)

1996 - $500,000
1997 - $560,000
1998 - $600,000
1999 - $620,000
2000 - $680,000
2001 - $720,000
2002 - $740,000
2003 - $760,000

HR SUPPLY FORECAST

After demand forecast, next step is to consider the

availability and ability to procure the required number of
workers/employees
In supply forecast availability of kind and number of
workers from both inside and outside sources are
measured

In benefits of supply forecast are

1) prevent shortages of employees 2) assess existing

staffing level 3) clarify staff mixes for future 4) quantify
the positions and people available in future

HR audit keep records of employee skills and abilities

Forecasting Techniques
Workforce Study Techniques
Calculation of amount of labour required by
determining length of operations and units of
production
Planned output for next year

20,000 unit

Standard hours per unit

Planned hours for the year

100,000

Productive hours per man

2,000
(allowing normal overtime, absenteeism and idle time)
Number of direct labour required
50

Forecasting Techniques
Delphi Technique
Experts estimated HR needs
The responses are summarized and then send again to
experts for further processing
The process continues till consensus reach or opinion
begins to match
New Venture Analysis
Useful for new business ventures
Estimating HR needs based on analysis of existing
companies in same business

Human Resource Department

Human Resource Development (HRD) is the

framework for helping employees develop their

personal and organizational skills, knowledge
and abilities.
A set of systematic and planned activities
designed by an organization or HR department to
provide its members with the necessary skills to
meet current and future job demands.

Functions of HRD
Training and development (T&D)
Organizational development
Career development

Training and Development

Training improving the knowledge, skills and

attitudes of employees for the short-term,

particular to a specific job or task.
Employee orientation
Skills & technical training
Coaching

Training and Development

Development Preparing for future

responsibilities, while increasing the capacity to

perform at a current job
Management

training
Supervisor development

Organizational Development
The process of improving an organizations

effectiveness and members well-being through

the application of behavioral science.
Focuses on both macro- and micro-levels
HRD plays the role of a change agent

Career Development
Ongoing process by which individuals progress through

series of changes until they achieve their personal level of

maximum achievement.

Career planning

Career management

Organizational Structure of HRD Departments

Depends on company size and status.
No single structure used.

HR Managers' Role in HRD

A front-line participant in HRD
Implements HRD programs and procedures
On-the-job training (OJT)
Motivational lecture
Career and employee development
Integrates HRD with organizational goals and strategies
Promotes HRD as a profit enhancer
Tailors HRD to corporate needs and budget
Institutionalizes performance enhancement

Challenges for HRD

Changing workforce demographics
Competing in global economy
Eliminating the skills gap
Need for lifelong learning
Need for organizational learning

A Framework for the HRD Process

HRD efforts should use the following four stages:
Needs assessment
Design
Implementation
Evaluation

Role of HRM
Advisory Role
Personnel Policies
Personnel Procedures
Functional Role
Service Role

Role Continue
HR Managers Today
Humanitarian Role

Future
Enhancement of Human & Non Human

Resources
Counselor
Maximization of people to achieve
organizational goals
Mediator Synergizing IT with HR
Spokesman Managing diverse workforce
Problem Solver
Change Agent

RECRUITMENT AND SELECTION

Recruitment deals with finding the
applicants, communicating
opportunities and information and
generating interest

Selection is a systematic process of

choosing among the pool of candidates
the best qualified potential candidate who
is most likely to perform the job
successfully.

Recruitment

Recruitment
The process by which a job vacancy

is identified and potential employees are

notified.
The nature of the recruitment process
is regulated and subject
to employment law.
Main forms of recruitment through
advertising in newspapers, magazines, trade
papers and internal vacancy lists.

Recruitment
Job description outline of the role

of the job holder

Person specification outline
of the skills and qualities required
of the post holder
Applicants may demonstrate their suitability
through application form, letter or curriculum
vitae (CV)

RECRUITMENT PROCESS
MANPOWER PLANNING

JOB ANALYSIS
JOB
DESCRIPTION

JOB
SPECIFICATION

PERSONAL
SPECIFICATION

RECUITMENT PROCESS CONTINUE

IDENTIFICATION OF VACANCIES
PREPARATION OF BUDGET
PREPARATION AND PUBLICATION OF
INFORMATION
RECEIPT OF APPLICATION FORM
DECIDING METHOD/S OF RECRUITMENT

METHODS AND SOURCES OF RECRUITMENT

INTERNAL SOURCES

INTERNAL JOB
PROMOTIONS

JOB TRANSFERS

EMPLOYEE
SUGGESTION

EXTERNAL SOURCES

ADVERTISING

EMPLOYMENT
EXCHANGES

CAMPUS
RECRUITMENT

CONTINUE

EXTERNAL SOURCES

WALK-ININTERVIEWS

EMPLOYMENT
AGENCIES

HEAD HUNTERS

INTERNET

ALTERNATIVES TO RECRUITMENT

OVERTIME

OUTSOURCING
TEMPORARY
EMPLOYMENT

Selection

Selection
The process of assessing candidates and

appointing a post holder

Applicants short listed
most suitable candidates selected
Selection process
varies according to organisation:

SELECTION TOOLS/TECHNIQUE
Interview most common method
Psychometric testing assessing the personality of
the applicants will they fit in?
Aptitude testing assessing the skills
of applicants
In-tray exercise activity based around what the
applicant will be doing, e.g. writing a letter to a
disgruntled customer
Presentation looking for different skills
as well as the ideas of the candidate

The Selection Process