People ResourcingManaging People

October 2014

Lecture objectives

• To define and outline the importance of HR planning

• To identify key considerations and stages in the HR planning process

• To outline labour market influences on HR decision-making

• To introduce concepts of talent management and succession planning

• To discuss issues surrounding labour turnover, retention and terminating the employment relationship

Defining HR planning

• Process of assessing current HR capabilities and forecasting future labour supply and demand, to produce HR plans that will enable an organisation to achieve its strategic objectives.

• Ensuring the ‘right people in the right place at the right time’

The importance of HR Planning

• Marchington and Wilkinson (2005) suggest four sets of reasons for the continued importance of HRP:• It encourages employers to develop clear and

open links between their business and HR plans• It allows for better control over staffing costs and

numbers employed• It enables employers to make more informed

judgements about the skills and attitude mix in the organisation

• It provides a profile of current staff

Key considerations in HRP

• How best to arrange people and processes to achieve sustained competitive advantage

• Whether required capacity can be sourced internally or externally

• Future demand for labour• ‘hard’ and ‘soft’ attributes

• Torrington et al. (2008; 51) suggest that HRP supports HR strategy by identifying: • gaps in capabilities• surpluses in capabilities • poor utilisation of people in the organisation• Areas of workforce potential

The process of human resource planning

Source: Adapted from Human Resource Planning by Bramham (1994)

The planning process:Demand Forecasting

• Predicting the impact of future developments (for example, changes in market conditions or proposed organisational restructuring) on the firm’s requirement for labour.

• Use of statistical techniques to make an assessment of future labour requirements, such as market trends or past experience

• More subjective forms of planning based on managerial judgement are increasingly common (Arnold and Pulich 2007)• Scenario planning represents an ‘early warning

system to enable a firm to beat the future’.

The planning process:Supply Forecasting

• Assessing current capacity in the form of workforce profiling

• Forecast future internal supply

• Identify patterns in the movement of labour, both internally and into and out of the organisation• Internal promotion, transfer, redundancy,

temporary withdrawal (for example, on maternity leave, sabbatical or secondment) and dismissal.

• Monitoring of recruitment trends

• Assessment of labour market dynamics- but to take into account external factors such as changing demography, skills mix amongst population and competition.

• The soft element of current and future HR capability: Staff attitude surveys, focus groups and exit interviews.

The planning process:Responses to the Forecasts

• There are a wide variety of organizational responses to demand and supply forecasts, beyond workforce downsizing or the future recruitment of required labour.

The planning process:Responses to the Forecasts

• New equipment or technology to replace or expand workforce skills

• Change the organisation of work processes

• Increase or change the focus of individual and organisational development

• Workforce restructuring

• Relocate operations to obtain necessary labour

• Seek to improve individual and group performance and productivity

• Attempt to change the culture of the firm to promote required behaviour or values

Issues in HR planning

• Value of HR planning in times of uncertainty or in unpredictable markets?

• ‘Grand’ HR planning unfeasible and impractical for decentralised and flexible organisations

• HR planning remains important, particularly for organisations with the following characteristics (Taylor 2008) :• Large enough to have dedicated HRP function, such as public

sector organisations• Operating in reasonable stable product and labour markets• Having key staff groups who require lengthy or expensive

training• Competing in industries in which decisions concerning future

investment are made years ahead

Labour market influence on HR decision-making

• Employee resourcing practices differ according to:• Labour market conditions• Ability of organisations to respond to these

conditions in a novel or creative manner.

• Labour markets which have an abundant supply of required labour are often referred to as ‘loose’

• Where required labour is scarce, labour markets are ‘tight’

Succession planning and talent management

• Contingency planning

• Succession planning provides long-term development plans for individuals identified as possible successors for senior managerial posts

• Broader approach of ‘talent management’ concerned with creation of a ’pipeline’ or pool of talented people

• Two approaches to talent management (Cunningham 2007):• Aligning people with roles (treating roles as fixed and

developing people to fit these jobs)• Aligning roles with people (creating and adapting roles to

satisfy the objective of the most talented)

Succession Planning & Talent Management early on

• Sainsbury’s approach - Growing your talent

‘Talent management and succession planning are key strategic areas for business in general, and at Sainsbury's there is more focus on this than ever before. As a graduate, you will be included in the annual Talent Review taking into account your performance and potential, enabling us to identify the right career development opportunities for you’. Source:http://sainsburys.jobs/signature/information/learning-and-development

• Jaguar – ‘Purchasing Talent’

Employee retention and turnover

• Acceptable levels of labour turnover vary by occupation, sector and organisation

• Excessive labour turnover typically considered problematic

• Labour turnover can, however, be positive: • Recruitment of ‘fresh blood’• Exit of poor performers

• Important of monitoring employee turnover and investigating the reasons for exit, analysing patterns of attrition to identify problem areas and benchmarking turnover rates with competitors.

Explanations for employee exit can be categorised as representing either

Pull factors

• Attraction and availability of alternative employment

• Relocation for non-work reasons

• Employee’s changing personal circumstances

• Outside the control of management?

Push factors

• Employee dissatisfaction with: • organisational practices or

policies• the nature of the work• personal relationships at

work

• Low levels of commitment

Addressing labour turnover

• The costs of addressing turnover must be balanced against the cost of losing the employee

• Maximise the retention of all staff or alternatively concentrate on retaining high-performing employees or those with scarce skills?

• All HRM practices have a function in minimising labour turnover

Terminating the employment relationship

• Resignation, dismissal or retirement

• Voluntary and compulsory redundancy• Related to factors external to the individual• Importance of retention of knowledge and skill

• ‘Good practice’ in managing redundancy • (UK legal obligations)

• Consult with employees• Compensate according length of service• Ensure ‘fair’ selection for redundancy• Reasonable attempts made to find alternative post for

affected employees

• Importance of managing ‘survivor syndrome’

Summary Points

• HR planning is the process of forecasting future labour supply and demand involving the assessment of ‘hard’ and ‘soft’ dimensions of HR capability and current practices and policies

• Range of HR responses to the planning process

• The feasibility of HR planning in unpredictable environments has been questioned

• Labour turnover a critical concern in many – but not all – firms

• Terminating the employment relationship creates a number of responsibilities for managers

References

Arnold, E. and Pulich, M. (2007) The Department Manager and Effective Human Resource Planning: An overview, The Health Care Manager, 26, 43-52

Beardwell, J. (2006) Recruitment and Selection in, Beardwell, J. and Claydon, T. (2006) Human Resource Management: A contemporary approach, Harlow: FT Prentice Hall

Cunningham, I. (2007) Talent Management: Making it real, Development and Learning in Organizations, 21, 4-8

Farnham and Stevens (2000) Developing and implementing competence-based recruitment and selection in a social services department, International Journal of Public Sector Management, 13:4, 369-382

Griffin, B., Hesketh, B. and Grayson, D. (2004) Applicants faking good: evidence of item bias in the NEO-PI-R, Personality and Individual Differences, 36:7, 1545-1554

Marchington, M. and Wilkinson, A. (2005) Human Resource Management at Work (3rd Edition), London: Chartered Institute of Personnel and Development

Newell, S. (2006) Selection and assessment, in Redman, T. and Wilkinson, A. (eds.) Contemporary Human Resource Management (2nd Edition), Harlow: FT Prentice Hall

Taylor, S. (2008) People Resourcing (4th Edition), London: CIPD

Torrington, D. Hall, L. and Taylor, S. (2008) Human Resource Management (7th Edition), Harlow: FT Prentice Hall

Worren, N. and Koestner, R. (1996), Seeking innovating team players: contextual determinants of preferred applicant attributes, International Journal of Human Resource Management, 7:2, 521-33