Today, chief executive officers (CEOs) refer to their workforce (or human capital) as their organizations’ chief asset. This statement underpins the importance of the concept of human resource in organizations.
Human resource planning (HRP) enables an organization to better realize its goals by ensuring that it makes efficient and effective use of its human capital.
Today’s workforce is characteristically ambitious and hence, volatile. Rosenberg (n.d.) reiterates that employees switch careers an approximated three times in their working life. Even with this change in the nature of the workforce employer, employee and customer demands and expectations remain the same.
In addition to these, organizations are competing immensely for high quality talent and are at the same time investing heavily in acquiring and retaining it as these is crucial in meeting business objectives and goals.
Thus, HR managers have an additional task, which is HRP that is instrumental in dealing with the element of uncertainty as it pertains to an employee’s future. From an organization’s point of view a translation of HRP is making good use of an employee while he/she is in the organization’s hands.
Yan et al (2009) reiterates that an organization’s workforce (or human capital) is a valuable asset. A robust human capital is a critical success factor in ensuring that the expectations of customers are met, which is the key to positive financial performance.
Realizing such a robust human capital requires a sound and strategic HR policy, which ensures that an organization recruits the best expertise available and makes the best use of it for as long as it can. Forecasting an organization’s current and future financial needs and HRP are core units of such an HR policy.
HRP is according to Dessler (2001, p. 24) the process of “anticipating future demand for staff, allocating different kinds of staff within organisations, and developing systems for calculating human resource requirements based on accurate records and forecasting techniques”. What HRP does is that it facilitates the effective use of an organization’s human capital.
It does this by ensuring that the right personnel are working at the right place and at the right moment. Forecasting an organization’s current and future HR needs involves using either a quantitative approach or a qualitative one.
The quantitative approach to forecasting an organization HR needs involves numerical quantification of employees by use of statistical and mathematical procedures. By grouping the resultant numerical entities into applicable groups it is possible to determine HR excesses, deficits and inconsistencies.
Examples of applicable groups include age, pay, gender, qualifications and performance rating. HR managers co-work with statistical and mathematical experts to ensure that there is accurate quantitative forecasting.
The qualitative approach to forecasting an organization’s HR needs involves consultations with experts. The opinions of the expert drawn from the consultations enlighten the organization on what its HR needs are, specifically, staffing requirements and career development paths to pursue.
The expert bases his/her opinions on evaluations on employee performance and potential for promotion. A comparison of the quantitative and qualitative forecasting approaches reveals that the latter is more popular as it is cost and time saving.
There are a number of factors that HR managers should consider when undertaking HRP. According to Stone (2008) one these factors is women in the workforce. Today’s workforce contains an increasing number of women. An incentive that is greatly contributing to this increase is the use of mother-friendly alternative working arrangements in organizations.
For instance, employers are providing mothers with flexible work arrangements, special parental leaves, job sharing arrangements, childcare facilities within the organization’s premises, telecommuting work arrangements etc. From 1982 to 2005 Australia has seen a rise of 18.7% in the number of females in employment who are between the ages of 18 and 64 years (Australian Bureau of Statistics, 2010).
In addition to this, from 1989 to 2004 Australia has also seen a rise of 6% in the number of working mothers (Australian Bureau of Statistics, 2010). HR managers when doing HRP should be aware of the fact that the number of women in the workforce is on a rise and should therefore put in place mechanisms that attract and retain them.
To illustrate the above point lets take the example of Diane Gibney. Diane returns to work at her former employer’s veterinary clinic after giving birth to her first child. Due to post antenatal commitments she asks her former employer for an alternative working arrangement, namely, flextime which would allow her to work at given times of the day. The employer refuses to offer her such a working arrangement.
Following the employer’s refusal Diane quits her job and with another partner opens their own veterinary clinic. The 14 staff members in Diane’s new clinic are all female. She is sensitive to antenatal commitments and accords her employees flexible working arrangements so that they are able to attend to them. This example underpins the appreciation that employers should give to mother-friendly HR policies.
Another example is that of Caroline Coops. Caroline’s has a strong commitment and a high motivation to work for her current employer. The reason for this is that the employer accommodates flexible working arrangements that particularly enable and empower mothers to attend to their antenatal commitments. Though Caroline is not a mother yet, this provision by her employer has had a profound effect on her.
It gives her piece of mind knowing that when such commitments arise she is able to adjust a working schedule so that she can better attend to her family needs. This example shows that family-friendly HR policies attract women into employment and are instrumental in retaining them in the organization’s workforce.
Employee retention is critical in meeting business objectives as the direct and indirect costs employers incur to employee turnover are phenomenal. Direct costs are those that an employer incurs when replacing the individual who has made the turn over. Indirect costs are those that the employer incurs because of reduced productivity. Attracting high quality talent to an organization is also critical in meeting business objectives.
Flexible working arrangements that are family-friendly enable organizations to attract and retain such talent as shown from the two examples above. In other words, such working arrangements enable employers to combat employee turnover and at the same time attract high quality talent to the organization.
They are a critical business success factors with today’s workforce that contains an increasing number of women and particularly mothers.
According to Stone (2008) another factor for HR managers to consider when doing HRP is globalization. Dessler (2001) describes globalization simply as the venturing of businesses into new international markets. Advances in information technology have been and continue to be instrumental in globalization. Soon the world will be a global village with ecological and socio-political systems that are dependent on each other.
An advantage of globalization is that employers have a bigger market in which they can shop for individuals with the right levels of skill, experience and knowledge.
An outright disadvantage of globalization is that it supports or encourages brain drain. Organizations that are global employers via globalization should manage their multiracial and culturally diverse workforce in such a way that conflicts between employees are at a minimal.
To illustrate that globalization is a factor that HR managers should consider when undertaking HRP we take the example of an American firm which invested in England. The firm bought a textile machinery company near Birmingham. To boost productivity the American manager of the textile machinery company set about on cutting the time lost on tea breaks, which amounted to thirty minutes in a day per employee.
Culturally, having tea in such a manner is not a big issue to Americans but it is to the English. So, by the direction and instruction of the American manager a tea-maker machine was installed in the company. An infuriated workforce went on a riot demanding the removal of the tea-maker machine. The American manager had to comply with the demands of his English workforce.
According to Stone (2008) another factor that HR managers should consider when undertaking HRP is ageing population. The current situation in most economies of the world is a workforce with, first, less people entering it and second, an ageing and near retirement population. This is an impending crisis for employers. Soon, there will be a lack of both skilled and experienced labour.
At the moment, individuals nearing retirement are the ones fuelling a huge portion of workforce growth. This means that when this ageing population retires workforce growth will almost stagnate causing a huge problem to employers.
Additionally, mature age workers tend to be more loyal and productive in comparison to their younger counterparts. It is therefore imperative that HR managers start figuring out how they can retain their organization’s mature workers.
To illustrate that ageing population is a factor that HR managers should consider when undertaking HRP we consider the case of Peter Jordan. Peter Jordan is a business consultant. He is of the opinion that HR managers should redirect their employee retention efforts towards keeping mature workers (Porter, 2008).
Jordan cites this as being crucial in averting or mitigating the effects of an imminent staff and knowledge shortfall that is about to hit in the very near future (Porter, 2008). Jordan additionally points out that there is more justification for this strategy when you consider employee loyalty between the mature and young age workforce (Porter, 2008).
Jordan opines that there is more employee loyalty in mature age workforce than in the young age workforce (Porter, 2008). Craig Perret feels the same way as Jordan’s pointing out that, HR managers should develop policies that encourage the mature age workforce to remain at work (Porter, 2008).
Other factors on top of these three that HR managers should consider when undertaking HRP are employment, organizational structure and culture, outsourcing and technological changes in society. HR managers should take a keen interest on the rate of employment in their countries.
Organizational structure and culture are instrumental in lifting employee morale and commitment to an organization. Technological changes in society can eliminate the need for certain employees in an organization thus bringing in cost cutting benefits. Outsourcing is a means for increasing capacity in organizations so that customer demand is met.
References
Australian Bureau of Statistics. (2010b). Women’s income. Web.
Dessler, G. (2001). Human Resource Management (8th ed.). Upper Saddle River, New Jersey: Prentice-Hall Inc.
Porter, L. (2008). Boomers can keep sea change at bay. The Age, p. 23. Web.
Rosenberg McKay, D. (n.d.). How often to people change careers? About.com: Career Planning. Web.
Stone, R. J. (2008). Human Resource Management (6th ed.). Milton, Qld, Australia: Wiley.
Yan, A., Rao, Y., Liao, C. & Gao, C. (2009). Competency identification of sales staff in the agricultural seed industry: Evidence of seed firms in China. Web.