Learning Outcomes

Recruitment & Selection:

HUMB 313

1. Defining HR Planning and Establish its

components
2. Analyze Major Influence of HR Planning
3. Forecasting HR availabilities
4. Determining employee
shortages/surpluses
5. Developing action plans

Staffing Organizations Model

Organization
Mission
Goals and Objectives

Organization
Organization Strategy
Strategy

HR
HR and
and Staffing
Staffing Strategy
Strategy

Staffing Policies and Programs

Support Activities
Core Staffing Activities
Legal compliance

Recruitment:

Planning

Selection:

Job analysis

Employment:

External, internal

Measurement, external, internal

Decision making, final match

Staffing System and Retention Management

1-2

1-2

Overview
Recruitment & Selection:
HUMB 313

HR planning is the process of

forecasting the organizations future
employment needs and developing
action staffing plans and programs for
these needs.

1.
2.
3.
4.

Involves several components:

Making initial planning decisions
Forecasting HR requirements
Forecasting HR availabilities
Determining employee
shortages/surpluses
5. Developing action plans
. The planning is guided by the
companys strategic directions.

The External Influences

There are 4 major external influences on HR planning:
1. Economic Conditions
2. Labor Markets
3. Technology
4. Labor Unions
All these conditions will be a major determinant on the
staffing policy of the organizations.
Recruitment & Selection:
HUMB 313

Ex. 3.1: Examples of External

Influences on Staffing

3-1

Recruitment & Selection:

HUMB 313

The External Influences (Economic

Conditions)

Many economic forces determine the overall economic

climate in which the organization functions

These includes:

1. Product & Labor market competition

2. Inflation
3. Interest rates
4. Currency Exchange (especially global companies)
5. Government fiscal and monetary policy.

The External Influences (Economic Conditions)

These will then translate into the condition

of the economy in which the organizations
operate.
The effect that the economy growth and
contractions is the amount of job creation
and job termination.

Recruitment &
Selection: HUMB 313
3-1

Recruitment & Selection:

HUMB 313

The External Influences (Labor Markets)

The concept is the same as demand for

products. Governed by the law of demand
and supply

More person available for a particular job

the lower the ability of negotiation of all the
person in the same job market

Shortage of person with a required KSAOs,

the higher the ability of the persons
negotiations. Example: Business Graduates
vs. Biotech graduates

Recruitment & Selection:

HUMB 313

The External Influences (Labor Markets)

Another way of looking into this is the

availability of the labor market itself.

If the economy is full of organizations that are

looking for the same type of person, then the
negotiation will favor the person

and if the labor market only consist of small

number of organizations that need a certain
person, the negotiation will favor the
organization.

The External Influences (Technology)

Recruitment &
Selection: HUMB 313

Technology can serve as a substitute for labor

by either eliminating or dramatically reducing
the need for certain types of workers

Jobs like clerks, telephone operators and

manufacturing operators has been vastly
substitute by technology.

Ironically, technology also increases the

demand for jobs such as robotic engineers,
system and database analysts and software
engineers.

Also, increased productivity as a result of

technological change can spur increased firm
performance, and in turn this will create new
jobs as the firm is ever growing.

Recruitment & Selection:

HUMB 313

The External Influences (Labor Unions)

By definition, labor unions are legally protected
entities that organize employees and bargain with
management to establish terms and conditions of
employment via a labor contract
Labor and management are required to bargain in
good faith to try to reach agreements on the
contracts

Recruitment & Selection:

HUMB 313
The External Influences (Labor Unions)
Issues that required bargaining include:
1.
2.
3.
4.
5.

Staffing levels
Location and facilities
Overtime and work schedules
Job Descriptions, hiring pools, KSAO requirements,
Promotions, transfers, layoffs, terminations

. Once a contract is agreed to, it standardizes the terms and

conditions of employment, making them uniform for all
covered employees
. Labor unions have direct and powerful impacts on staffing.
Unions determine most of the staffing policy based on the
agreements with the management.

Recruitment & Selection:

HUMB 313

Human Resource Planning

By definition, HRP is a process and set of activities
undertaken to forecast the organizations labor
demands and internal labor supply.
This is done to compare the projections and
determine gaps and finally developing action plans
for these gaps
The model in the next slide depicts the HRP
process.

Ex. 3.2: The Basic Elements

of Human Resource Planning

3-2

Forecasting HR Requirements
(Statistical Techniques)

There are two ways of forecasting HR

requirements:
1.

Statistical Techniques

.
.

Ratio analysis
Trend Analysis

Recruitment & Selection:

HUMB 313

Forecasting HR Requirements (Statistical Techniques)

Ratio Analysis
1. Examine historical ratios involving workforce size
2. Determine what indicator to use (sales, ROI, ROA), therefore, Sales/1.0 FTE,
ROI/1.0 FTE, ROA/1.0 FTE
Example:
Assumed that Company A have forecasted that their sales will increased 10
times in the next five years at the current level of RM 10,000. Their current
employees stand at 100, therefore the calculation will look like this:

1/x = 10000/100000(projected sales); therefore x= 100000/10000 = 10

This concludes that company A need additional 10 staffs to be aligned with the
projected sales.
Recruitment & Selection:
HUMB 313

Try this!!
Apple Inc is hiring in Malaysia. The
current number of employees in its
Malaysian office is 95. The
company projected that its sales
will increase from 2.5 million this
year to 5 million in 3 years time.
Calculate the number of employees
that Apple needs at the end of that
3 years?

Forecasting HR Requirements (Statistical Techniques)

Trend Analysis
1.
2.
3.
4.
5.

Gather data on staffing levels over time

Predict trend in employee demand
Calculate period demand index
Multiply the previous years FTE by the trend figure
Multiply this figure by the periods demand index

Recruitment & Selection:

HUMB 313

Forecasting HR Requirements (Statistical Techniques)

Example:
A retail store finds that the average no of employees over the past five
years has been 142,146,150,155 and 160.
This represents a consistent 3% increase per year, therefore to predict the
demand for next year multiply 160 and 1.03 to show a 3% increase
expected.
Over this same time period, it averaged 150 FTEs per month with an
average of 200 FTEs in December.
This means the December demand index is 200/150 = 1.33, so their
estimate for next years December FTE demand will be (160 x 1.03) x
1.3=219 FTEs in December.

Try this!!
Parksons average number of employees has been increasing
by 5% per year. In 2010 the company employed 2000 FTEs.
Calculate the number of FTEs needed by Parkson in 2016?
The company also averaged 2050 employees per month per
year. Every year, during the year end sales (Nov and
December), parkson will need extra 30% of its normal number
of employees. Calculate the number of employees needed in
Nov and December 2016.
If parksons have 2800 employees in november and december
2015, calculate the number of employees needed in nov and
december 2016.

Forecasting HR Requirements (Judgmental Techniques)

Represents human decision making models that are used for forecasting
A decision maker (HR executive) who collects and weighs the information
subjectively and then turns it into forecasts.
Two way of doing this (top-bottom approach; bottoms up approach)
Top Bottom approach- top managers rely on their knowledge of the business
and organizational plans to make predictions about what future HR needs are.
Bottoms Up approach- lower level managers make initial estimates for their
unit based on what they are being told. These predictions are consolidated and
aggregated upward through successively higher levels of managements and
top management establishes the overall requirements.

Forecasting HR Availabilities

There are three different approaches to forecasting

availabilities:

Manager Judgment

Markov Analysis

Replacement and succession Planning

Manager Judgment
.
.
.

.
Recruitment & Selection:
HUMB 313

Appropriate in smaller firms.

Assume that a manager is asked to make an
availability forecast for the entry sales job.
The manager must have data on how many new
staff joining, staff leaving, staff transferred and
staff exiting or promoted.
Using these data, the manager then will have an
assumed number of projected staff availabilities.

Forecasting HR Availabilities

Markov Analysis

Based on historical patterns of job stability and movement among

employees.

To conduct Markov Analysis, managers must first know all the job
stability, promotion, transfers and exit rates.

With these historical transitional probabilities, it becomes possible

to forecast the future availability of the current workforce.

Recruitment & Selection:

HUMB 313

Recruitment & Selection:

HUMB 313

Replacement & Succession Planning

Focus on the identification of individual employees who will

be considered promotion candidates
Can occur at any levels of the organization
Replacement happen when a new recruit joined to fill a
vacancy for a determined post
Succession happened when employee is promoted

Recruitment & Selection:

HUMB 313

Reconciliation & Gaps

It is represented by the results of bringing together
requirements and availability forecasts with the
results of external and internal environmental
scanning
In short, the reconciliation and gap phase of HRP
involves coming to grips with projected gaps and
likely reasons for them
The way to fill these gaps is through internal and
external recruitments.

Ex. 3.3: The Basic Elements

of Human Resource Planning

3-3

Action Planning
Involves 4 steps:
1.
2.
3.
4.

Set Objectives
Generate Alternative Activities
Assess Alternative Activities
Choose Alternative Activities

Staffing Objectives
. is derived from identified gaps between requirements
and availabilities.
. The objective will respond to two issues which are
employee shortages and surpluses.
. Two ways of identifying the need to achieve these
objectives
. Quantitative objective must get the numbers right
. Qualitative objective- must get the right person to fill
(KSAOs)

Action Planning
Generate Alternative Activities
There are two types of alternatives; one is long
term and the other is short term.
Short term alternatives include:
1.Overtime
2.Outsourcing
3.Temporary Workers
4.VSS
5.Layoffs
6.Terminations
Recruitment & Selection:
HUMB 313

Recruitment & Selection:

HUMB 313

Action Planning
Generate Alternative Activities
Long Term alternatives include:
1. Hire new employees
2. Recall old employees
3. Ask for transfers within the company
4. Retraining of current employees
5. Transfer work out
6. Restrict hiring policy
7. Capped number of employees at a certain
level

Ex. 3. 4 Staffing Alternatives to Deal

With Employee Shortages

3-4

Ex. 3.5 Staffing Alternatives to Deal

With Employee Surpluses

3-5

Recruitment & Selection:

HUMB 313

Action Planning
Assessing & Choosing Alternative Activities
The goal of assessment is to identify the best way of
filling the gaps (among the alternatives listed)
Things to consider when assessing:
1. How fast the gap needs to be fill
2. The costs associated with all the alternatives
3. The effects of filling the gap to the rest of the
workers

Exhibit 3.15 Internal Versus External Staffing

3-33

Recruitment & Selection:

HUMB 313

TUTORIAL
Discuss in your groups the four
External Influences on the HR
and staffing planning of
Companies that are registered in
Malaysia.

Recruitment & Selection:

HUMB 313

THE END