Solutions to Assignments
MMPC -002 - Human Resource Management
MBA and MBA (Banking & Finance)
Question No. 2 Explain the process of human resource planning. Describe how HR forecast is carried out in the organisation you are working with or an organisation you are familiar with.
Most entrepreneurs do not go into business to become human resources experts. They go into business because they find a passion and see a need in the market they believe they can fill. Unfortunately, as a business owner, having a human resources infrastructure is critical to the growth and success of the business. The problem is that most owners know little about how to build out a compliant human resources program. That’s where C2 comes in. C2 Essentials offers human resources outsourcing and support to clients, so they can devote more time to building and perfecting the core competencies of their business.
Five Planning Steps Every Organization Should Use
Human Resources is often viewed as a “necessary evil” that gets short shrift because it is not a direct revenue generating component of the business. Nonetheless, human resources is critical to creating productive, happy employees and maintaining a workforce that can execute the company’s core business needs. One project we often take our new or prospective clients through is a five-step analysis to determine what human resources services their respective companies need and how to scale those services amid planned future growth.
1. Analysis of Organizational Plans and Objectives
When it comes to organizing and streamlining the human resources function, you must first start by doing a complete and thorough analysis of the organization’s plans and objectives. Every organization is going to function differently and have different goals. It is important to understand the ins and outs of the organization before attempting to make changes to the current human resources infrastructure. Having a professional employer organization (PEO) such as C2 Essentials come in and do a complete audit of everything that is already in place is a great way to offset that burden and can provide an expert-level analysis of how your company’s human resources function should be operating.
2. Preparing a Human Resources Inventory
Completing a full human resources inventory is the next step in the planning process. A complete catalog needs to amassed that contains basic demographic data about each employee, which should include breaking down the employees by education, experience, skills, age, gender, salary, marital status, and any other special training or certifications pertinent to the company’s operations. This initial step may seem tedious but gathering this information about your company’s employees at the outset will help inform everything from payroll to benefits to recruiting.
3. Assessing Future Supply and Demand
Assessing future supply and demand in human resources is also known as “forecasting”. Forecasting is an important step in identifying your market and what changes may potentially be on the horizon. As you win government contracts or secure new clients, you may find yourself in a position that you need to onboard many employees at once. Or you may see a contraction in your market coming down the road and need to plan on how to adjust your human resources function.
4. Matching Supply and Demand
Supply and demand affect the recruitment and staffing process. A strategy for matching supply and demand is to flatten the demand by shifting demand to match existing supply. A different strategy is to adjust the capacity to match fluctuations in demand. This is similar to the “supply and demand” analysis a company goes through in determining how much of their product or service is needed in a given market – the only difference is this is focused on your company’s human resources needs.
5. Establishing an Action Plan
When establishing an action plan, there are many variables that need to be considered. For example, is there currently a human resources deficit or surplus in the organization. Does the company have a current plan for recruiting, hiring, educating, evaluating, compensating, and training employees? Are the current services sufficient to meet both current and future human resources needs?
Recruiting is a core human resources function that is too often left to happenstance. When a need arises, a company tries to fill the void. But without a cogent recruiting plan already in place, finding the right candidate(s) can be difficult. To create a successful recruitment plan, companies should first inventory the current positions, identify any future needs, determine the experience and education required to fill those roles, and lastly identify any experience or performance gaps within existing departments. For each position that needs to be filled immediately, create a compelling and eye-catching job description (this will not only entice candidates but will help inform how and where the company should look for candidates).
Another important human resources function that often gets overlooked is employee training. For example, many federal contracts and a growing number of states require ethics and/or sexual harassment training as a regular part of their employment.
Why do you need to do forecasting?
The most successful businesses utilise human resource forecasting to minimize risk. It’s especially important for growth-oriented businesses to “limit exposure to surpluses or shortages in labour.” Entrepreneurs, owners, and business leaders can use strategic human resource forecasting and planning to better understand workforce needs. As you evaluate labour demand, your workforce may already have skills you can tap into as the business grows or you may find a need to augment or renew technology skills. Your business can meet labour demand from within, or use outside labour supply sources. As you build your HR forecast, it’s important to thoroughly review talent supply and factors impacting the availability of that talent. It’s often more costly to recruit new hires than to upskill or train existing employees to increase productivity.
Some businesses need or want to invest all of their time and energy in growth. That’s why many businesses rely on HR services to help forecast labour demand and supply. HR services can create organization and replacement charts that help identify important roles and functional needs across your business. Supply forecasting includes a review of the current labour market and employment law to ensure your business is both competitive and compliant.
Human Judgement
Under this method, firstly experienced managers or executives estimate the manpower requirements for their respective departments. This is done on the basis of their knowledge of expected future workload and employee efficiency. At last, the top management then aggregates and approves the departmental estimates. This is a very easy and time-saving method.
But it is quite subjective and is, therefore, suitable only for small firms. With the assistance of work-study, Operations and Management, and human resource experts can refine the estimates based on experience. This method helps in judging the informal group norms on Human Resource Forecasting.
Work-study Method
This method uses time and motion study to analyse and measure work. Such studies help the managers to decide the standard time for per unit work. The following method shows this method:
When it is possible to measure work and set standards, the work-study method is more suitable for repetitive and manual jobs. Job methods should not change frequently.
Ratio- Trends Analysis
This method helps to calculate the ratios on the basis of past data. Firstly, it calculates the future ratios on the basis of the time series analysis/extrapolation, after making allowances for the changes in the organization, method, and jobs, if any.
Extrapolation is a mathematical extension of past data into the future time period. Moving averages and exponential smoothing can help for projections. The company estimates the demand for human resources on the basis of ratios.
Mathematical Models
A mathematical model shows the relationship between independent variables and dependent variables. These models express various factors influencing manpower needs in the form of a formula.
There are several types of models, e.g., regression, optimization models, probabilistic models, etc. These are complex and suitable only for large organizations.
