Dynamics of Human Resource Planning in business plan

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This essay will evaluate the role and dynamics of Human Resource Planning in a business plan. This will include a critical assessment of its importance and utility. An in-depth analysis of the relevance, strengths, vulnerabilities and critical assessment as to its validity will be scrutinized. The aim of the essay is to analyze the core competency of the process in order to reach the conclusion as to its significance which would exemplify the basis on which the management locate and enhance its skills and capabilities to achieve organizational goals and targets. This essay will also point out certain aspects and changes which may be required by the managers to incorporate their attributes. First, a clear definition of Human Resource Planning process will be stated. Secondly, its significance in the current scenario based on its use by the management in diverse situations giving due regard to the uncertain market will be portrayed. This will be followed by a critical assessment and analysis as to the strengths and weaknesses of the process in question. A brief example of an IT company which uses the WFP model will be outlined. To conclude, benefit of the process will be submitted.

Human Resource planning can be defined as a process of an organization which attempts to estimate the demand for labor and evaluate the size, nature and sources of the supply which will be required to meet the demand (Reilly, 1996). In this definition, HRP is equivalent to manpower planning however, HRP looks into qualitative as well as quantitative issues. A question arises as to why organizations plan their human resources. This can be attributed to the need for skills which are in short supply, to identify potential problems and minimize chances of making a bad decision. It has been recognized to have a flexible approach to staffing which in turn leads to maximizing employee contribution through better deployment and utilization. Those who foresee the value of HRP process emphasizes on the importance of co-coordinating actions and aligning behavior in relation to corporate goals. Furthermore, it helps maintain a diversified workforce (Keel, n.d)

Another important issue is where, how and by whom is HRP carried out. Organizational behavior is not constricted to the external environment it operates in but also its culture and principles have an effect. HRP can be applied to meet budgetary requirements for employee numbers which may be based on supply against demand where Reilly (1996) argues that it is necessary for cost and productivity estimates. He also points that HRP should not only be based on business plan but also be able to influence them. HRP also assists activities such as recruitment, restructuring etc. HRP techniques can be used at all levels in the organization over short and long term . This is affirmed by Reilly (1996) that effective HRP will be derived on the basis of where decisions are taken, what time frame and whether it relates to individuals or to group of employees. The actors of HRP ranges from the Senior management to the HR planners who are concerned with details that deals with individual issues depending on the situation on hand.

Effective HRP or Workforce planning is an important tool in maximizing resources wherein people are the key to successful improvement and it is argued that with progressive steps, an organization will be better equipped to manage day-to day activities as well as future challenges. Moreover, Lamb (2008) points out that effective WFP poses as a boon in the sense it leads to cutting staffing costs, forecasting employments needs, efficient provision of training and development, assisting future managers and leaders.

Although, WFP is required to attain equilibrium in the organization, many organizations lack the essential skills to exercise WFP which maybe owing to lack of resources, suitable technology or inability to collect accurate data. Another factor which poses as a hurdle to spread of WFP would be resistance on the part of the existing organizational culture and disregard of the need for WFP in small organizations. Forecasting is frequently viewed as an art rather than science providing inexact approximations than absolute results. Thereby it is safe to argue that the ever changing environment can contribute to an ineffective WFP .

WFP can be further demonstrated in a HHS Workforce Planning model where this model relies on analyzing the present workforce, identifying objectives , comparing present workforce competencies to those needed in the future and developing plans for a successful transition . This essay will focus on the Demand and Supply analysis of the model. Where Supply analysis focuses on the present scenario in staff demography and employment trends, Demand analysis deals with future activities and interpreting the workforce changes driven by technology and changing work processes. Furthermore, by including demand analysis process, employees can assist effectively if they are involved in identifying competencies that exist. Moreover, an integral part of demand analysis is scrutinizing not only what an organization will do in the future but also how it will be performed.

The need for workforce planning is fostered by effectively managing day-to-day HR tasks simultaneously. Although WFP has been implemented in a variety of industries, it has proven most effective in the area of IT where demand for skilled workers exceeds supply. This is affirmed by Australian Taxation Office in its annual report that IT managers have a framework to make staffing decisions based on strategic direction, budgetary resources and desired workforce capability. This is effectively demonstrated by way of an example of the application of workforce planning in Hewlett Packard’s IT service business where the authors find a solution to the problem of matching employee skills and other attributes to the project requirements .According to the research conducted by Santos S.A, Zhang A, Gonzalez M.T, Jain S(2009), few business organizations face the problem of WFP problems in regards to demand uncertainty, competitive marketplace and supply change. Santos et al (2009) used the Supply and Demand consolidation approach to map the job requirements effectively with the employee skills . This approach allows for mapping at less than 100% match along with a score display. Due to the uncertain nature of demand and supply, the authors created a buffer capacity called bench which measures the degree of confidence of winning and delivering such a project. It also allows to consider the attrition rates of employees to characterize supply uncertainties. The Demand and Supply consolidation provides a main output being a qualification table that determines the specific jobs based on both opportunity and Bench that an employee is fully qualified for and a transitions table that shows the particular jobs required by either opportunities or Bench an employee is partially qualified for. This WFP and scheduling approach have been successfully set up at an HP Project Delivery Centre.

The dynamic nature of WFP is further stressed by Young (2010) who explains that the ultimate payoff from strategic WFP will be a vigorous internal job market that transcends the boundaries between business units and geographies and map employee data to talent located anywhere in the organization. Dow Chemicals has also favored this approach throughout its 10 year evolution of its workforce planning process. However, Reilly (1996) argues that if the HRP techniques are ignored, decisions would be taken without understanding their implications and graduate recruitment numbers will be set in ignorance of demand. As mentioned earlier, it would be better if decision makers follow the protocol and execute resourcing plans. Although it is not considered as the best practice, Creelman(2009) points out approaching HR planning with unrealistic expectations is not done. An example would be the expectation to return back to the time of highly detailed HR plans as shown in the old manpower plans. He stresses that in today’s world , a plan will focus on specific details . One way to remove predicament of sort is to instill HR planning into the existing business planning process so that HR issues are raised at the same time as other issues. For example, if a business unit addresses the issue of shutting down a factory during the planning process, then the HR issue of its effect on the employed personnel will also be raised. Creelman (2009) also suggests having a simultaneous cycle of planning process by integrating strategic, operational and HR process which would enable the management team to look at the business plans from three different angles.

To conclude, HR integrated into the business planning process should be considered as an integral part and not an add-on. This model will be effective if the HR manager is also involved in the critical planning process and that issues are addressed at the right time . Moreover, if these points are not considered it would be hard to create effective plans.