Strategic Human Resource Planning

Transcription

1 Research Paper Strategic Human Resource Planning Joey Goh Su Yin KDU College, Penang Department of Business, 32, Jalan Anson, Georgetown, Penang, Malaysia. Muhammad Hafiz Bin Othman Department of Business, 32, Jalan Anson, Georgetown, Penang, Malaysia. 1. Introduction According to (Gennard, 2004), Human Resource Planning (HRP) may be defined as a process to forecast an organisation s labour demand and internal labour supply for the acquisition, utilization, improvement and preservation of organisation s human resource(hr) (Deb, 2006). This essay aims to illustrate how the elements of HRP is link to the organisation s strategic objectives. It will then further analyse the implementation of HRP in organisations and identify the factors which influence HRP. HRP is a vital tool for organisations to achieve business success because it is considered a strategy to identify gaps and surpluses in capabilities, poor utilization of people and develop a talent pool in the workforce (Torrington, et al., 2008). 2. Elements of Human Resource Planning (HRP) Based on the Workforce Planning model, there are four basic elements of HRP (Heneman III, et al., 2012). Firstly, organisations have to forecast labour requirements and make comparisons with the labour availabilities based on the labour market supply to determine the extent which the labor demand for can be fulfilled. Then a gap analysis is done to determine shortage and surpluses in capabilities in order to reconcile requirement and availabilities. After the reconciliation process, an appropriate action plan is developed based on the collection of HR data and information that serves as an input. The Workforce Planning Model and its considerations and strategies is a useful framework as it can be modified to suit companies respective to their industry. 3. HRP versus Manpower Planning Manpower planning is the traditional term for HRP. Manpower planning emphasizes on quantitative elements of forecasting to control and match the supply-demand of labour based on the number of employees, levels and types of skills available in the organisation (Deb, 2006). Shortage or surplus of manpower and turnover rate can be indicated using quantitative methods (ACAS, 2010). Page 1

2 Although HRP and manpower planning provides career opportunities for human resources development, the traditional manpower planning is considered rigid. Manpower planning does not reflect a shift towards managing people because it does not focus on the development of skills (Torrington, et al., 2008). Inadequate skills and knowledge will lead to a competitive disadvantage and reduces efficiency as performing complex tasks would require multi-skills and sufficient knowledge. Furthermore, the limitations of quantitative methods used is that it does not specify reasons for the turnover rate (Beardwell & Claydon, 2007). Hence, qualitative methods are used to examine the reasons for turnover (Beardwell & Claydon, 2007).It is further criticized that there is a need to focus on softer issues such as employee behaviour, organisational culture and systems (Torrington, et al., 2008). Thus, the shift towards a contemporary approach of HRP focuses on the soft side of HRP while certain elements of the hard approach are still incorporated into the framework of HRP with the aim of catering to contemporary circumstances. (Beardwell & Claydon, 2007). However, Mintzberg (1994) criticized that it is inappropriate to predict future developments by using forecasts and the planning process in HRP which relies on past experiences (Stephen, 2008). The business environment is increasingly unpredictable and complex where the bureaucratic features of HRP may not be accurate and impacts other longterm interests. Nevertheless, the implementation of HRP is a contemporary approach to go beyond the capabilities of the Manpower Planning framework. Therefore, the scope of HRP is to balance the demand for and supply of labour, identify future training needs, reduce labour cost by ensuring effective utilization of human resources to enhance productivity and assess the need for structural changes to support future plans (Stephen, 2008). 4. Strategic HRP Linking Organisation s Objectives Strategic HRP links HR management directly to the objectives of the organisation as it sets organisational priorities and guides HR management decisions to support future plans and strategies. HRP connects the whole organisation because HR management will develop strategies and target action plans to meet organisational objectives based on strategic HR plans. For that reason, the responsibility for HRM is shared by human resource specialist and line management (Werner & DeSimone, 2006). HRP and the organisational objectives are interdependent as the resources are developed to match the requirement of each other. The development of resources influences the strategic plans to meet the overall operational goals and organisational objectives. Hence, strategic HRP cannot be a solo discipline (CIPD, 2014). According to Walker (1992), strategic HR management concerns with aligning the management of human resources with the strategic content of the business (Armstrong, 2006). Integrating HRP into the aspects of business planning is a strategy to improve the overall business performance through support activities in attracting and retaining employees, training and development and identify the need for organisation restructuring or changes in approaches to support business plans. In order to attract the right people with the right skill at the right place and right time, it is important to analyse the labour market. Analysing the labour market enables organisations to identify the availability of particular skills, knowledge and expertise so that HR management can identify the extent of the labour demand for can be matched with the available supply (Wilton, 2013). Organisations should look into both labour markets, internal and external, as it shapes the approach which organisations would adopt. Page 2

3 Internal labour market refers to the existing employees within an organisation and represents the internal supply of labour (Wilton, 2013). Seeking to retain employees through training and development and career development gives employees a sense of job security and motivation. Training and development is often linked to the effectiveness of HRM strategies. According to Sisson (1989), organisations become dependent on the external labour market for the supply of particular skills, knowledge and expertise if they do not provide training to its existing employees (Rainbird, 1994). Furthermore, training increases employee motivation when the organisation invests and places value on them. Thus, organisations benefit from employee retention as it builds employee loyalty to gain long term service by providing internal opportunities for career advancement and prevents employees from transferring to other organisations (Wilton, 2013). Otherwise, organisations which implement HRP would have a succession plan to ensure key roles can be replaced if they leave or retire. Moreover, Human Resource Development (HRD) has plays an important role in shaping business strategy by using its employee expertise. HRD supports employee expertise in assuring consistent quality in the delivery of reliable services and products (Torraco & Swanson, 1995). In addition to that, high levels of expertise are required to fully capitalize on emergent opportunities for business growth as the current relocation pattern of large companies show that there is a need for more skilled labour than unskilled labour (Torraco & Swanson, 1995). HRD plays a vital role in growth and development of skills as there an increasing need for multitasking and also equip workers with the knowledge to operate new technologies. Hence, HRP does not only reduce labour cost but also reduces product cost when there are plans to invest in training and development for the production of goods and services. External labour market refers to the external supply of labour (Wilton, 2013). As part of the scope of HRP is to attract people with skills needed by the organisation, apprenticeship schemes can be developed to recruit people and form a pool of candidates (Werner & DeSimone, 2006). For example, Florida Theme Park (FTP) attracts new employees by being known as the preferred employer and develop core competencies when shortlisting job applicants who meet the requirements (Mayer, 2002). FTP also uses its HR policies to deliver high quality services standards by providing training for employees to be equipped with technical and interactive skills. The best employees are retained through reward and recognition programs. Thus, this demonstrates FTP efforts and strategies are supported by HRP in recruitment and selection processes, training and development plus performance appraisals. When considering the appropriate HR strategies and systems to meet organisational objectives and goals, the aim of strategic HR management may also take into account of the interests and needs of employees and other stakeholders (Schwind, et al., 2005) As a result, HRP may help organisations to strike a balance between the interest of shareholders and stakeholders when Corporate Social Responsibility (CSR) is incorporated as an organisational business strategy. Organisation objectives will include the shareholders interest in maximizing profit which will then fulfil its economic responsibilities (Caroll, 1991). Similarly, legal responsibilities have to be fulfilled by complying to regulations as required by the government. On the other hand, ethical responsibilities and philanthropic responsibilities are not mandate but are expected by stakeholders (Caroll, 1991). The interests of stakeholders should be taken into account as various stakeholders play a role in influencing the environment of the company which would impact the business performance (Gawel, 2014). As the nature of organisational objectives are diverse and changes with time, strategic HR management will therefore align its people-planning activities in conjunction to business strategy. However, organisations have to develop a contingency plan as there are several factors which influences HRP. A contingency plan would prepare an organisation for unexpected situations and enable them to respond accordingly. Economic, political, technological and social factors such as the labour market change, the growth of technology and compliance to Page 3

4 regulations influences HRP (Wilton, 2013). The type and changes of labour market are determinant factors of the approach and strategy which organisations should adopt. Technology have a positive impact on HRP as it helps in predict future trends through the collection of HR data and information which will provide a better insight for organisations to develop the most appropriate plans and strategies (CIPD, 2014). 5. Conclusion In conclusion, HRP and the organisational objectives are interdependent as the resources are developed to match the requirement of each other. The components of HRP is link to an organisation strategic objectives as enhances efficiency by supporting the organisation in attracting and retaining employees, training and development and identify the need for organisation restructuring or changes in approaches to support business plans. Reference [1] ACAS, Managing Attendance and Employee Turnover. [Online] [2] Available at: [3] [Accessed 15th November 2014]. [4] Armstrong, M., A Handbook of Human Resource Management Practice. 10th ed. London: Kogan Page. [5] Beardwell, J. & Claydon, T., Human Resource Management : A Contemporary Approach. 5th ed. Navarro: Pearson Education Limited. [6] Caroll, A. B., The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders. Business Horizons, Issue July-August, pp [7] CIPD, Make Workforce Planning Work. People Management, Issue May, p. 36. [8] Deb, T., Strategic Approach to Human Resource Management: Concept, Tools & Application. New Delhi: Atlantic Publishers & Distributors. [9] Gawel, A., Business Collaboration with Universities as An Example of Corporate Social Responsibil. Poznan University of Economics Review, 14(1), pp [10] Heneman III, H. G., Judge, A. T. & Kammeyer-Mueller, J. D., Staffing Organizations. 7th ed. New York: McGraw Hill. [11] Mayer, J. K., Human Resource Practices and Service Quality in Theme Parks. International Journal of Contemporary Hospitality Management, 14(4), pp [12] Rainbird, H., The Changing Role of the Training Function: A Test For the Integration of Human Resource And Business Strategies. Human Resource Management Journal, 5(1), pp [13] Schwind, H. F., Das, H. & Wagar, T. H., Canadian Human Resource Management: A Strategic Approach. 7th ed. Canada: McGraw-Hill Ryerson Limited. [14] Stephen, T., Human Resource Planning : Relevance and Debates. In: People Resourcing. London: Chartered Institute of Personnel and Development, pp [15] Torraco, R. J. & Swanson, R. A., The Strategic Roles of Human Resource Development. Human Resource Planning, 4(18), pp [16] Torrington,. D., Hall, L. & Taylor, S., Human Resource Management. 7th ed. Harlow: Financial Times/Prentice Hall. [17] Werner, J. M. & DeSimone, R. L., Human Resource Development. 6th ed. Mason: South Western. [18] Wilton, N., The Labour Market Contect of HRM. In: An Introduction to Human Resource Management. London: Sage, pp Page 4

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