Week4HRMPlanning.pdf
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HUMAN RESOURCE PLANNING HOW DOES HRM IMPACT ON ORGANISATIONS?
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TODAY • Last week lecture recap
• Revisiting Strategic HRM and the link between HRM systems and organisational performance
• HRM Casual Chain: sequence of events between HR practices, employee outcomes and organisational performance
• HRM planning • Labour demand and supply forecasting • HRIMS • Australian economy and industry • Talent gap / global talent crisis – how do organisations retain
and develop talent? • Turnover – why do people leave organisations?
LAST WEEK RECAP - A DYNAMIC AND CHANGING WORLD… • Australia and Free Trade Agreements (FTAs)
• Investor-state dispute settlements (ISDS)
• International skilled labour migration
• Impact of economic fluctuations
• Changing labour force
• Changing structure of the economy and industry
• Changing work and employment patterns
These developments have changed the operational landscape for Australian organisations and HR professionals
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ORGANISATIONAL STRATEGY AND STRATEGIC HRM
Strategy is a plan that integrates an organisation’s vision, mission, goals and objectives and determines how resources will be used Tuss et al (2012, p. 45)
Strategic HRM emphasises the close alignment between organisational and HRM strategies, processes, functions and outcomes
Strategic HRM is like ‘HRM 2.0’ – it is about developing a HRM approach that is geared towards achieving and supporting the organisation’s mission, vision and goals
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HRM Causal Model
Strategic HRM where
organtisational strategy informs the
HRM approach
HOW DO HRM SYSTEMS IMPACT ON ORGANISATIONAL PERFORMANCE?
STRATEGIC ALIGNMENT
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ALIGNING HRM WITH ORGANISATIONAL STRATEGIES
WHY DO HUMAN RESOURCE PLANNING (HRP)?
“The bridge between HR strategies and HR functions is the formulation of human resource plans…
…that incorporate the desired outcomes of HR strategies, are responsive to continual changes in dynamic national and global industry environments, and can be implemented through efficient and effective HR functions.”
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KEY HRM CHALLENGES
AHRI study finds key challenges specific to the Australian context (these should sound familiar!):
• Global competition • Technological and communication breakthroughs • Demand for personal flexibility • Demographic changes • Global best practice changes in people management • Changing business standards e.g. corporate social responsibility • Government regulation
THE OBJECTIVES OF HR PLANNING
• Estimating the future supply of and demand for human capital and then figuring out how to close the gaps
• Balancing supply and demand considerations by formulating staffing strategies that are aligned with organisational needs
• Translating organisational plans into HR plans that guide the long- term acquisition, use and development of intellectual capital
To ensure that you have the right people, in the right place, with the right skills, at the right time and at the right price
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HR PLANNING: WHAT HAPPENS AND HOW DOES IT HAPPEN?
• Demand: determination of necessary labour requirements • Supply: prediction of likely sources needed in the future
• Environmental scanning • Evaluation of strengths and weaknesses (i.e. SWOT) • Development of objectives, goals and suitable strategies • Ongoing process, focused on the long-term • A series of processes, with contingency options • Based upon efficient, effective, user-friendly HRIMS
WHAT
HOW
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LABOUR DEMAND FORECASTING Estimating in advance the number and type of employees required. Complex or simple techniques can be used.
Depends on:
• expertise of HR specialist • complexity of organisational structures • market factors / sector • external environment
Labour demand forecasting is more an art than a science.
LABOUR DEMAND FORECASTING TECHNIQUES
LABOUR SUPPLY ANALYSIS • Determine if the number and types of employees required are available
(skills inventory), and when and where they will be needed (task inventory)
• Perform a skills and tasks gap analysis
• Labour supply can come from either internal or external sources
• Internal labour supply is derived from organisational audits/ analyses of employee competencies (in relation to future organisational needs)
• External labour supply when the organisation lacks internal supply for positions
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Options for reducing an expected labour surplus
Speed Human suffering
1 Downsizing Fast High
2 Pay reductions Fast High
3 Demotions Fast High
4 Transfers Fast Moderate
5 Work sharing Fast Moderate
6 Retirement Slow Low
7 Natural attrition Slow Low
8 Retraining Slow Low
Options for avoiding an expected labour shortage
Speed Revocability
1 Overtime Fast High
2 Temporary employees
Fast High
3 Outsourcing Fast High
4 Retrained transfers Slow High
5 Turnover reductions
Slow Moderate
6 New external recruits
Slow Low
7 Technological innovation
Slow Low
FORMULATING HUMAN RESOURCE PLANS
• Once labour demand forecasts and supply analyses have been conducted, a series of integrated staffing plans are developed, in line with corporate strategies
• Plans are likely to be disrupted by internal or external changes
• The individual and collective impact of SHRM can, and should, be measured and subsequently reported and marketed to the organisation’s stakeholders
HUMAN RESOURCE INFORMATION MANAGEMENT SYSTEMS (HRIMS)
Originally performed manually, but:
• Growth and complexity of government legislation
• Complexity of payroll systems (large and global organisations)
• Need for a strategic HRM (planning) tool
Aggregated data on all aspects of the employment relationship including:
• admin functions operational data
• industrial awards, HR policies, salary, leave
• personal and job histories, records on recruitment and selection
BENEFITS AND FEATURES OF HRIMS • Improved planning and program development
• More rapid information processing and improved response
times
• Reduced administrative and HR costs
• Enhanced accuracy of information
• Contains employment and job data
• Standardises HR processes
ETHICAL ISSUES AND HRIMS
• Who has access? • Authorship, who can edit? • Accuracy, is it all true? • Data sharing, with whom and who decides? • Protection of data, can it be hacked? • Data ownership, is it for sale? • Privacy, what does it actually capture?
As a result of the proliferation of HRIMS, employee data is being used in non- traditional ways. Increased efficiency can conflict with the rights and interests of employees, external stakeholders, and society at large.
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DO PEOPLE REALLY DO THIS LEVEL OF PLANNING?
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WOULD THIS WORK IN AUSTRALIA? • HR planning may not be as formal as expected
• Why? • Organisational size • Level of managerial support • Integration of HR activities • History, culture, philosophy of organisations • Skills of HR managers
• In Australia: • Comparatively, there is a lot of employment protection (regulation) • Cultural values that encourage support and having a ‘fair go’
Hiring, retaining and developing staff is less rational than a strategic HRM plan model may suggest!
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NEW JOBS AND CHANGES IN AUSTRALIAN INDUSTRY
Largest employing industries in Australia
• Health Care and Social Assistance
• Retail
• Construction
• Professional, Scientific and Technical Services
• Education and Training
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Only a “paradigm shift” – a major shift in thinking and assumptions – can help tackle the problem…
On the brink of a “global talent crisis”:
• In India, the percentage of employers having difficulty filling positions jumped 51%
• 60% of organisations were experiencing a leadership shortage
• 72% of respondents reported difficulty finding and keeping the high-potential employees
If CEOs are not thinking about retaining good talent, recruiting good talent, and how the definition of reward is changing — it’s no longer just about compensation but also about career and learning and development opportunities — then they may not see their businesses expanding from a financial perspective. They are thinking short-term.”
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THE “TALENT EXPECTATIONS GAP”
The disparity between what companies expect from their workforce and the skills and capabilities that are available in the marketplace.
Companies realise the importance of a global mindset but: • are unable to implement effective mobility or diversity
strategies • few companies are investing enough in talent management.
The expectations gap stems largely from the fact that most global organisations operate under an outdated talent management model
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STRATEGIC SHIFTS
Think long term Measure the right outcomes Adopt a disciplined approach
Going beyond making an immediate and direct connection between investment and return on talent
Filling key positions with promising internal candidates
Developing job-specific employee skills
Assessing these skills through recruitment, selection etc
Evaluating talent management
High-performing organisations treat talent management as a disciplined process of alignment with business strategy
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TURNOVER • Turnover represents the loss of staff. An organisation with high turnover is difficult to run, as staff in general cost twice their yearly salary to replace
• Turnover can’t necessarily be thought of as the problem, it is likely that something else is the problem and turnover is the outcome
• Turnover is often an indication that something is going wrong, thus researchers spend a lot of time examining causes of turnover and intent to leave
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WHY DO PEOPLE LEAVE? • Sector (e.g. hospitality has high casualisation and poor work conditions)
• Lack of management and organisational support, bullying, harassment, work-life balance, autonomy, lack of promotion
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SO TO CONCLUDE…
How can organisations employ the right staff? How can they make sure they have selected staff that are focused on achieving the organisation’s aims (not just their own job role in isolation)?
The answer comes back to the integration of a SHRM framework, which has effective planning processes to ensure that the right staff are recruited, current staff are retained and developed, and staff who may leave the organisation pass on essential knowledge
UTS BUSINESS SCHOOL UTS CRICOS PROVIDER CODE: 00099F business.uts.edu.au
NEXT WEEK Work and Job Design: How do we work when we are at work? How might we work even better?
Readings:
• Nankervis et al. (2017), Chapter 5
• Parker, S., Wall, T., & Cordery, J. (2001). Future work design research and practice: towards an elaborated model of work design. Journal of Occupational and Organizational Psychology. 74: 413-440.
