Linking organizational strategy to Human

Resource planning
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Human resource planning ultimately translates the organizations overall goals the number and
types of workers needed to meet those goals. Without clear cut planning, and a direct linkage to
the organizations strategic direction, estimation of an organizations human resource needs are
reduced to mere guesswork. This means that human resource planning cannot exist in isolation.
It must be linked to the organizations overall strategy. The steps involved in linking are as
follows:
1. Assessing current human resources: Assessing current human resources begins by
developing a profile of organizations current employees. This is an internal analysis that includes
information about the workers and the skills they currently possess. From a planning viewpoint,
this input is valuable in determining what skills are currently available in the organization. The
profile of the human resource inventory serves as a guide for supporting new organizational
pursuits or in altering the organizations strategic direction. This report also has value in other
HRM activities, such as selection individuals for training and development, promotion, and
transfers.
2. Determining the Demand for labor: Once an assessment of the organizations current human
resources situation has been made and the future direction of the organizations has been
considered, a projection of future human resource needs can be developed.
3. Estimating the future supply of labor: Estimating changes in internal supply requires the
HR to look at those factors that can either increase or decrease its employee base. An increase in
the supply of any units human resources can come from a combination of four sources, new
hires, contingent workers, transfers in, or individuals returning from leaves. Decreases in the
internal supply can come about through retirements, dismissals, transfers out of the unit, layoffs,
voluntary quits, sabbaticals, prolonged illnesses or deaths. HRM manager should consider these
increases and decreases to estimate the future supply of labor.
4. Estimated Changes in future supply: there are some factors outside the organization that
influence the supply of available workers. We should review these changes outside the
organization to estimate changes in the future supply.
5. Matching the demand and supply of labor: The objective of human resource planning is to
bring together the forecasts of future demand for workers and the supply for human resources,
both current and future. The result of this effort is to. Pinpoint shortages both in number and in
kind, to highlight areas where over staffing may exist

NEEDS OF HRP
Major reasons for the emphasis on HRP at the Macro level:
Employment-Unemployment Situation: Though in general the number of educated
unemployment is on the rise, there is acute shortage for a variety of skills. This emphasis is the
need for more effective recruitment and retaining people.
Technological Change: The myriad changes in production technologies, marketing methods and
management techniques have been extensive and rapid. Their effect has been profound on the job
contents and job contexts. These changes cause problems relating to redundancies, retaining and
redeployment. All these suggest the need to plan manpower needs intensively and systematically.
Organizational Change: In the turbulence environment marked by cyclical fluctuations and
discontinuities, the nature and pace of changes in organizational environment, activities and
structures affect manpower requirements and require strategic considerations.
Demographic Change: The changing profile of the work force in terms of age, sex, literacy,
technical inputs and social background has implications for HRP.
Skill Shortage: Unemployment does not mean that the labour market is a buyers market.
Organizations generally become more complex and require a wide range of specialist skills that
are rare and scare. Problems arise when such employees leave.
Governmental Influences: Government control and changes in legislation with regard to
affirmative action for disadvantages groups, working conditions and hours of work, restrictions
on women and child employment, causal and contract labour, etc. have stimulated the
organizations to be become involved in systematic HRP.
Legislative Control: The policies of hire and fire have gone. Now the legislation makes it
difficult to reduce the size of an organization quickly and cheaply. It is easy to increase but
difficult to shed the fat in terms of the numbers employed because of recent changes in labour
law relating to lay-offs and closures. Those responsible for managing manpower must look far
ahead and thus attempt to foresee manpower problems.
Impact of the Pressure Group: Pressure groups such as unions, politicians and persons
displaced from land by location of giant enterprises have been raising contradictory pressure on
enterprise management such as internal recruitment and promotion, preference to employees
children, displace person, sons of soil etc.

Systems Approach: The spread of system thinking and advent of the macro computer as the part
of the on-going revolution in information technology which emphasis planning and newer ways
of handling voluminous personnel records.
Lead Time: The log lead time is necessary in the selection process and training and deployment
of the employee to handle new knowledge and skills successfully.

Important Aspects of Human Resource Planning or SHRM

By Octavia Branch
eHow Contributor

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Human resource planning is a process that identifies expectations and structure for manpower in
a business. It could also be viewed as a strategic operational process that is used to address
various issues such as long lags in filling positions within an organization, demographic shifts or
changes in the economy. The actions and activities that are formulated in human resources
planning impact the success of business operations.
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Forecasting

Forecasting is a way to identify the personnel necessary to perform the job duties of
business today while seeking what the needs of business will be in the future. Often times
this includes reviewing the skill sets, abilities as well as the experience needed to
successfully perform on the job. Forecasting towards the future predicts retirement trends
that could occur, which increases the chances of having a supply of candidates that are
able to fill these positions. Strategically, forecasting can eliminate the loss of money from
possibly vacated positions or the inability to fill positions. (See Reference 1)

Accountability of Inventory

Understanding the vision of an organization is an avenue which is useful in outlining the

requirements from a human resources perspective. Knowing the people that currently
work in an organization is part of planning and looking at all aspects of the situation to
make the most resourceful plan that can be executed in an efficient manner. Inventory
looks at individuals and skill sets that are present in the organization. The revelations
made during inventory can be used to compare current human resource requirements with
future requirements that could be influenced by economic factors. (See Reference 2)

Job Analysis

As times change and job responsibilities change in an effort to respond to the challenges
in an organization, it becomes strategic to review jobs in detail. With job analysis, a
methodology is used to collect information about a job which includes job descriptions,
specifications or an overview of what is expected of the person that holds the position.
Job analysis is a tool that develops people within the organization, which affects the
bottom line of business -- effective manpower. (See Reference 1)

Auditing

Auditing looks at the past, present and future of business actions. Strategies that develop
in a human resource plan review labor turnover, age, training costs, employee absences or
any information that is related to human resources to predict what could possibly happen
when certain elements are factored into the equation. This examination of data is a
resource of information that patches together a plan of action of what works well in the
organization and what may not. (See Reference 1)

Internal Factors to Consider in Human Resource Planning

by Sam Ashe-Edmunds, studioD

Internal workforce management factors include responses to market conditions.

Related Articles

External & Internal Environmental Factors Influencing HR Activities

Factors Affecting Human Resource Plans

What Are Internal & External Environmental Factors That Affect Business?

Factors to Consider When Developing a Human Resource Information System

Six Main Functions of a Human Resource Department

How you staff your organization and mange your workers takes into account internal factors you
can control, such as scheduling and training, and external factors you cant, such as the
unemployment rate and changes in the marketplace. Keeping track of internal influences on your
employee management needs helps you maintain the most effective staffing levels and maximize
productivity.
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Organizational Structure
If you havent reviewed your organizational structure lately or have never created a
comprehensive organization chart, consider doing so. The key to maximizing the effectiveness of
your human resources function starts with determining your optimal staffing needs. Create an org
chart, ranking each position and clearly delineating who works for whom. Write a job description

for each position to determine if every task you need performed has been assigned. Dont be
afraid to include positions for which you dont have employees or to leave out staff members
who dont fit into your optimal organization chart. Once you see these holes or redundancies,
you can better plan how to address them.

Budget
An obvious internal factor to consider when looking at your staff planning is your budget. Some
positions are demand-sensitive, such as those in production, warehousing, customer service and
shipping. Youll get the money to fill those positions from increased revenues. Other positions
that dont generate revenue but still bring value require you to find the money for those positions.
To stretch your staffing budget, offer a smaller base pay. Add voluntary benefits that cost you
nothing, can reduce your payroll taxes and offer your employees attractive, low-cost benefits
they can pay for or fund, such as health insurance, a 401(k) account or a flexible spending
account.

Skill Levels
As your company grows, you might have additional administrative or operational needs that
cant be fulfilled by your current workers. Instead of hiring contractors or additional employees,
consider offering staff training. Add employee development to your human resources planning,
including on-site training, tuition reimbursement and sending workers to seminars and
workshops.

Productivity
To get the most out of your workers, create the most positive workplace possible. Offer clear job
descriptions and annual reviews, a wellness program, morale-building activities such as contests
or outings, an employee newsletter and frequent communications about individual, departmental
or company successes.

Compliance
Work with your insurance company, local fire department, a security professional and an
employment expert to make sure you cover your legal requirements as they apply to your
workers. This includes following state and federal labor laws and regulations, creating a safe and
secure office space, store, plant or warehouse, instituting and enforcing company policies and
procedures and paying all required taxes and insurance.

Employee Relations
Internal policies and procedures impact HR activities. For example, if the company is committed
to promoting from within, HR must ensure employees receive appropriate training and
development to be ready for promotion when the time comes. HR should monitor the number of
employees eligible for retirement and ensure potential replacements or other staff members are
trained to avoid a sudden departure of business knowledge. If the company is unionized, HR

must engage in collective bargaining with the union on matters of representation. External
influences, political factors and organizational culture all influence the amount of grievances and
complaints HR must respond to.

Compensation
Labor supply drives the amount of compensation a business must offer to attract employees. In
an oversaturated market, when unemployment is high and many more qualified candidates exist
than job opportunities, the amount of compensation you must provide is less than when a
shortage of candidates exists and you are competing against multiple other companies to recruit
employees. HR must continually evaluate the compensation structure by conducting industryand location-specific salary surveys to ensure wages remain competitive enough to attract and
retain key staff members but low enough that the business remains financially competitive. HR
must also ensure that the internal compensation structure is fair -- for example, experienced
workers with specialized qualifications should earn more than recent college graduates
performing the same tasks.
5. Shortage of skill due to labour turnover :Industries having high labour turnover rate, the HRP will change constantly i.e.
many new appointments will take place. This also affects the way HRP is
implemented.
6. Multicultural workforce :Workers from different countries travel to other countries in search of job. When a
company plans its HRP it needs to take into account this factor also.
7. Pressure groups :Company has to keep in mind certain pleasure. Groups like human rights activist,
woman activist, media etc. as they are very capable for creating problems for the
company, when issues concerning these groups arise, appointment or retrenchment
becomes difficult. You can read external factors on following link
Organizational changes :Changes take place within the organization from time to time i.e. the company
diversify into new products or close down business in some areas etc. in such cases
the HRP process i.e. appointing or removing people will change according to
situation

Factors Affecting Human Resource Plans

by Shelagh Dillon, studioD

Good human resource planning allows for adaptation to constant change.

The most carefully laid human resource plans can be affected by internal and external change
anytime, so forecasting and flexibility are essential for effective planning and adapting as
required. In order to do this, HR managers must be aware of whats going on within the
company, the industry and the wider market in relation to the factors that influence change.

Political
From a shift in local public opinion to a change in government or even a new industrial world
superpower entering the market, politics influence how much funding is available, how much tax
must be paid, minimum wage rates, how markets are controlled and the quality and quantity of
staff available for hire. When planning ahead, you need to consider likely changes to markets,
budgets and availability of suitable applicants as a result of recent or anticipated political
influences. For example, if a change of government is possible in the coming year, understand
the new administrations priorities in relation to markets, industries and businesses.

Economic
How much money is available for salaries, training and equipment is the most immediate
concern in human resource planning. However, external economics plays an equally critical role.
For example, people dont have as much money to spend in an economic downturn and tend to
be much more selective in what they buy or services they use. This means some industries, such
as those producing luxury items or non-essential services, sell less and may even have to lay off
some staff. This, in turn, makes the local economy even more difficult. Building economic
factors into the human resources plan helps to predict how many employees you will need and
you can pay.

Social
Several social factors may influence your HR planning, but you need to take into account
equalities and diversity in particular. Where there is a clear discrepancy of one social group, its a
good idea to build in ways of opening up new opportunities. For example, if there are few
Hispanic people in your company compared to numbers in the wider community, determine why
this is the case and what can be done to redress the balance. Try holding a recruitment event in
the area or conducting a survey of locals, asking if they would consider a job at your company
and if not, why not.

Technological
New technology brings new skills requirements, so companies always need to be aware of
proficiencies and training needs when planning human resources. New products and services
also may require recruiting highly skilled employees or training existing employees to meet the
need. Make sure HR managers are aware of new equipment or knowledge be needed so they can
build the required skills, and most likely salary enhancements, into the plan.

Legal
Employment law is the most significant sector of the legal system that affects human resource
planning, and it changes all the time. In most cases, there is plenty to time to implement changes
to policy, as the law can take awhile to take effect. Keep yourself up to date, and have an
employment law specialist available to consult if necessary. Employment law changes must be
reflected in company policy and implemented on the ground by supervisors and managers, so
you may need to incorporate another training need into the human resources plan.

Environmental
Environmental factors might include where your business is located in relation to finding
sufficient appropriate staff or changes to the environment that mean a need for more or fewer
employees. A simple example of environmental factors affecting human resource planning is the
consideration of how your employees get to work safely during extreme weather; your plan may
need to include the possibility of telecommuting in order to keep everything going.

Competition
The extent of competition in your industry affects your company's ability to recruit qualified
workers. Industry giants find that candidates seek them out. There is no need to spend money
advertising each recruitment in such a case, because candidates will visit the company website of
their own accord. Small businesses typically don't have the same branding power or company
reputation, though, and need to actively seek qualified candidates for critical positions. In such a
scenario, a human resources department will need to focus on developing recruitment materials

and attending job fairs to promote the company and attract applicants. Similarly, HR should
develop programs and incentives to retain key employees.
Demographic changes :Demographic changes refer to things referring to age, population, composition of
work force etc. A number of people retire every year. A new batch of graduates with
specialization turns out every year. This can change the appointment or the removal
in the company

Importance of strategic planning

What determines the importance of strategic planning is the small number and the long term,
organisation-wide impact of the decisions in the strategic plan. The corporate strategic planning
sits above and informs all other plans in the organization.
The strategic plan is the master of other plans.

|Plan Ahea|
|d|
Failing to plan is planning to fail. This often-heard quote from Alan Lakein, the popular author
on time management, is a reminder that many of the day-to-day operational struggles we face in
organizational life had their seeds sown in the past, when we failed to think ahea . . .d.

You cannot predict the future

True, you cannot predict the future. No manager has a crystal ball in his or her brief case. Every
day has its own we couldnt see it coming. Nevertheless, many severe day-to-day operating
problems have, as their origin, a failure from months or years earlier- a failure in strategic
planning. Simply, absence of strategic planning, or poor strategic plans, usually lead to tactical
days youd rather forget of operating nightmares, some of which can last months.
The importance of strategic planning in reducing these "days you would rather forget" cannot be
overemphasized. My definition of strategic planning is A systematic, formally documented
process for deciding the handful of key decisions that an organisation, viewed as a corporate
whole, must get right in order to thrive over the next few years.
Note that in this definition it speaks of the strategic plan being for the organization viewed as a
corporate whole. The kind of strategic planning we are talking about used to be called
corporate planning. In a sense this makes the importance of strategic planning blindingly
obvious. Get it right and the whole organization is impacted, and strengthened towards better
long term performance, get it wrong and ... !

Strategic planning gives overall direction

Strategic planning can provide an overall strategic direction to the management of the
organization and gives a specific direction to areas like financial strategy, marketing strategy,
organizational development strategy and human resources strategy, to achieve success. These
other kinds of planning, some of which are confused with strategic planning are intended for
parts of the organization, or specific functions or processes within the organization. All of these
other types of planning should be guided and informed by the strategic plan.

Strategic planning is planning

for the organization as a whole
To repeat strategic planning involves planning for an organization as a whole - as a corporate
whole. So corporate strategic planning is not product planning, production planning, cash flow
planning, workforce planning or any of the many of other sorts of planning conducted in today's
organizations. All these are designed to plan parts or sections or departments of organizations.
Most companies, even quite small ones, already employ product development managers,
marketing directors, production planners and finance controllers to look after the planning of
these various parts, and when you do strategic planning you certainly do not want to do all these
again under a fancy new name.
As soon as a strategic plan starts to spell out detailed production plans, workforce plans, finance
plans, and so on, it is going to overreach and become a initiative-sapping set of edicts from Head
Office. The importance of strategic planning comes not from the degree of control or
supervision, and the level of detailed instruction it includes, but for the scale, time horizon, and
importance of the decisions it embodies.
Strategic planning is corporate. You can only have a strategic plan for an autonomous or quasiautonomous organization; you should not have one for any section, part or fragment of an
organization unless it is quasi-autonomous, like a profit centre, or a wholly owned subsidiary.
However, an indirect tribute to the importance of strategic planning is made by the common
appropriation of the term strategic to describe all manner of other partial plans.

Importance of strategic planning and

of strategic planners
Some planners seem to think that strategic planning means planning the whole organization and
so they produce vast schedules showing what is going to happen to every tiny corner of the
organization for years ahead in meticulous detail. It is possible to plan ahead in great detail for
short periods of time; it is also possible to plan ahead for very long periods, although only in
outline. To try to plan in meticulous detail over long periods, however, is quite misguided.
Some people may become suspicious that the strategic planners who do this are only trying to
cultivate a greater mystique around the practice of strategic planning. They seem to be saying
that you need to be very brilliant to do strategic planning. This is to confuse the importance of
strategic planning with the self importance of those who se themselves as 'strategic planners'.
Top executives in companies with strategic planning departments get frustrated by 'planners' in
their ivory towers, striving for an unattainable perfection in the messy reality of an uncertain
world.

The importance of strategic planning is that it is planning for the corporate whole, not for its
parts. It is not business planning, although it should inform and shape the business plan, it is not
production planning, although it should guide what is produced, it is not workforce or technology
planning or any other type of partial planning, and it definitely is not marketing, even though it
guides who to market to and where to market. It is not coordinating, forecasting or budgeting. It
is a process designed to yield a corporate strategic plan - a statement of strategies designed to
affect the long term performance of the organization as a corporate whole.

The small number and the great impact of the decisions gives
strategic planning its importance

The purpose of the corporate planning process described elsewhere on this site is to reach an
enthusiastic consensus among the top executives in an organization as to the handful of decisions
they have to take in order to place their organization in a strong position to face the long-term
future

ntroduction to strategic HR planning

The overall purpose of strategic HR planning is to:

Ensure adequate human resources to meet the strategic goals and

operational plans of your organization - the right people with the right skills at
the right time

Keep up with social, economic, legislative and technological trends that

impact on human resources in your area and in the sector

Remain flexible so that your organization can manage change if the future is
different than anticipated

Strategic HR planning predicts the future HR management needs of the organization after
analyzing the organization's current human resources, the external labour market and the future
HR environment that the organization will be operating in. The analysis of HR management
issues external to the organization and developing scenarios about the future are what
distinguishes strategic planning from operational planning. The basic questions to be answered
for strategic planning are:

Where are we going?

How will we develop HR strategies to successfully get there, given the

circumstances?

What skill sets do we need?

Steps in Human Resource Planning

(explained with diagram)
Article shared by Smriti Chand
Steps in Human Resource Planning (explained with diagram)!
Human resource planning is a process through which the right candidate for the
right job is ensured. For conducting any process, the foremost essential task is to
develop the organizational objective to be achieved through conducting the said
process.
Six steps in human resource planning are presented in Figure 5.3.

1. Analysing Organizational Objectives:

The objective to be achieved in future in various fields such as production,
marketing, finance, expansion and sales gives the idea about the work to be

done in the organization.

2. Inventory of Present Human Resources:
From the updated human resource information storage system, the current
number of employees, their capacity, performance and potential can be
analysed. To fill the various job requirements, the internal sources (i.e.,
employees from within the organization) and external sources (i.e., candidates
from various placement agencies) can be estimated.
3. Forecasting Demand and Supply of Human Resource:
The human resources required at different positions according to their job
profile are to be estimated. The available internal and external sources to fulfill
those requirements are also measured. There should be proper matching of job
description and job specification of one particular work, and the profile of the
person should be suitable to it.
4. Estimating Manpower Gaps:
Comparison of human resource demand and human resource supply will
provide with the surplus or deficit of human resource. Deficit represents the
number of people to be employed, whereas surplus represents termination.
Extensive use of proper training and development programme can be done to
upgrade the skills of employees.
5. Formulating the Human Resource Action Plan:
The human resource plan depends on whether there is deficit or surplus in the
organization. Accordingly, the plan may be finalized either for new recruitment,
training, interdepartmental transfer in case of deficit of termination, or voluntary
retirement schemes and redeployment in case of surplus.
6. Monitoring, Control and Feedback:
It mainly involves implementation of the human resource action plan. Human
resources are allocated according to the requirements, and inventories are
updated over a period. The plan is monitored strictly to identify the deficiencies
and remove it. Comparison between the human resource plan and its actual
implementation is done to ensure the appropriate action and the availability of
the required number of employees for various jobs