HR strategic and consulting roles

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HumanResourcesPlanning.pdf

Human Resources Planning

Human resource needs in an organization must address the internal needs of the organization

and the external influences of society. Human resources planning involves taking a proactive

approach to providing the human resources needs of the organization.

The human resources planning process starts with figuring out how many employees the

organization must hire with particular skills to be successful. The planning process also

determines what skills and attributes those employees should have.

Internal and External Influences on the Human Resources Plan

Society influences an organization externally by:

• limiting the supply of labor and the skills that are available to the organization

• determining the values and ethics that the business is expected to follow

• providing competition for the labor needed

• providing technologies that the business can use

The supply of labor is limited because there are a limited number of people. Further limits come

from geographic location and the skills that the labor force have attained. If there is a gap in the

supply of people who have particular skills or people who are willing to work particular jobs, the

economic system will try to fill that gap. This was evidenced in the late 1990s, when the pay for

high-tech jobs was higher than for other jobs. The demand for high-tech workers was high, but

the supply of people with high-tech skills was low, so wages for those positions increased.

Another example of the supply of labor having a social influence is the demand for field workers

and low-level service workers in the United States. The demand for those workers is higher than

the U.S. labor force can supply, so there is an influx of immigrants (both legal and illegal) to fill

the gap between the demand and supply of low-skill labor.

The supply of labor is one of the greatest social influences in our society. With a global economy,

it is now possible for organizations to hire labor in countries outside the United States to do tasks

that in the past may have been done in the United States.

Laws and regulations define for organizations what is acceptable for them to do. Our

society has determined that it is unacceptable for businesses to work 12-year-old children for 10

hours a day, and as a result the child-labor provisions of the Fair Labor Standards Act (FLSA)

were passed. In the last 50 years our society has determined that it is unacceptable for

organizations to discriminate on the basis of race, gender, or religion (among other traits), so

EEO laws and regulations have been passed. Businesses are also restrained by the values and

ethics of their own individual organizational culture and by the expectations of society. These

societal expectations may precede or extend the expectations expressed in laws and regulations.

The competition for labor can be intense between organizations. If the competition for

particular skills is intense, it may drive wages up. The supply of specific skills may lead

businesses to compete in different ways. Some businesses may resort to hiring individuals who

do not have the required skills and training those individuals for the skills that the business

needs. Other businesses may move to cities or locales where a skilled labor force already exists.

Society often demands the latest technological advances from businesses. Being

competitive often requires that a business use the latest technological advances and having a

supply of labor that can meet those technological needs can be a challenge. Businesses often

depend on educational institutions to develop training programs that will train people to use the

latest technologies. This symbiotic relationship between business and educational institutions is

an important factor in meeting society's labor needs.

Factors that are internal to the business when dealing with human resources planning are:

• the environment and culture of the organization

• the strengths and weaknesses in the organization

• the presence of an effective strategic plan

• operational (short-range) planning goals

• the needs that are projected by the strategic and operational plans

Internal factors are much more dependent on the particular organization, so they must be

tailored to the needs of each organization. The environment and culture of the organization

depends on its leadership and market position. That leadership and market position leads to

different strengths and weaknesses that each organization must define for itself. Those strengths

and weaknesses will lead to the major aspects of the organization's strategic plan. The strategic

plan will define what operational actions must be taken. The strategic and operational plans will

result in goals that the human resources manager can use to project what the organization's

human resources needs are and will be.

The Human Resources Plan

The human resources plan is strongly tied to the organization's strategic plan and it can be

difficult to separate the two. This is one of the reasons that it is essential that the human

resources manager be involved at the highest levels of strategic planning. For example, an

organization cannot function without people available and willing to work for it. It would be

unwise for an organization to locate a facility in a geographic region that did not have a supply of

labor, at a cost that the organization could afford. The human resources manager must be

involved in such decisions, so the supply of labor can be accurately evaluated. Decisions such as

locating new facilities are important parts of an organization's strategic plan.

With human resources planning being such an important part of the strategic planning process,

the steps in the human resources planning process closely parallel the same steps in the

strategic planning process. These steps are:

HUMAN RESOURCES PLANNING STRATEGIC PLANNING 1. Review the organizational vision and mission to make sure the HR philosophy is coordinated with that vision.

1. Develop an organizational vision and a mission statement about that vision.

2. Inventory the internal organization for skills and needs, now and in the future.

2. Analyze the internal environment for strengths and weaknesses.

3. Look at the external labor market to see if it can meet the organization's human resources needs for now and in the future.

3. Analyze the external environment for opportunities and threats.

4. Define objectives for the human resources function in the organization.

4. Set objectives for the organization.

5. Figure out how human resources will make sure the labor needs of the organization will be met to fulfill the objectives of the strategic plan.

5. Develop a strategy to meet the organization's goals.

6. Hire people and/or train people for the skills and attitudes the organization needs; or take steps to make sure people will be available to hire as they are needed in the future.

6. Implement the strategy.

7. Check on the human resources projections and make sure to adjust for any changes that were not anticipated by the human resource plan.

7. Evaluate the strategic plan and modify that plan as needed.

A human resources manager can use a number of tools to help develop and implement a human

resources plan.

1. A labor-demand forecast provides a prediction of the organization's future labor needs.

2. A labor-supply forecast provides a prediction about whether those future labor needs can

be met by the labor available in society.

3. A gap analysis expresses what the difference will be between the demand for and the

supply of labor.

Several things must be considered when analyzing labor needs. Both the global and the diversity

needs of an organization provide opportunities for the organization to grow. Those same

opportunities may give the human resources manager headaches in forecasting and filling labor

needs. Hiring people with backgrounds that have not previously been represented in the

organization can lead to the need for more education and training in human skills for all

employees. Human resources managers in modern organizations are responsible for more than

just filling any labor gaps. Human resources managers are increasingly responsible for keeping

the employees' morale and motivation levels at a productive level.

A good job analysis is essential to the human resources planning effort. If an organization's

needs have been defined through good job analyses, the internal labor demands will be much

easier to determine. Good job analyses are also important to determining if there is an adequate

supply of labor in specific skills needed for the organization.

Gap analysis can be dealing with either a lack of labor supply or a surplus of labor in the

organization. If there is already a surplus of labor in the organization, it can lead to downsizing.

It is more unpleasant for an HR manager to have to plan to downsize than to plan for expansion,

but human resources plans will often lead to the conclusion that parts or all of an organization is

in need of downsizing. Effective human resources management can mitigate the negatives of

downsizing. Some focus must be put on how downsizing affects those who are still in the

organization after the downsizing occurs.

Human resources planning is the basis for everything else the human resources manager does. It

is also the way an organization's human resources function is tied to the rest of the organization.

A good human resources plan will contribute to the success of the individuals in an organization

and to the success of the organization itself.