HUMAN RESOURCES PLANNING

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HUMAN RESOURCES PLANNING

Human Resources Planning is the process by which an organization ensures that it has the right number and kinds of people at the right places , at the right time, capable of effectively and efficiently undertaking and completing those tasks that will help the organization achieve its overall objectives

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The TSS Case Study on HRP

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The case study is in two parts. We will do it one part at a time. Some terms:
Offshore : Employees / Projects based out of India Onsite : Employees / Projects based overseas normally at client location Blended Rate : It is the weighted average billing rate that the company gets between offshore and onsite, e.g. if there are 80 employees offshore getting billed at $25 per hour (average) and 20 employees onsite getting billed at $60 per hour (average), then the blended rate = (25*80+20*60)/(80+20) per hour or $32 per hour. Billed Nos. : the no. of employees who are getting billed Billable Nos. : No. of employees who can get billed Utilisation = Billed man-hours/Billable man-hours Attrition Rate : Rate of employees leaving the organisation. In a month if the average no. of employees is 100 and if 3 people leave during the month, the attrition % for that month is 3% Voluntary Attrition (VA) : % of employees who leave on their own accord. Involuntary Attrition (IVA) : % of employees who are asked to leave Lateral : An employee with work experience Fresher : An employee with no work-ex.

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The TSS Case Study on HRP

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Having studied the HRP exercise versions 1 & 2 what needs to be done to make the planning more accurate:
Revenue planning needs to be done at the vertical/geo levels Within that at client level including expected new clients, new projects Offshore/Onsite breakups to be considered new projects will have higher onsite components to start with Revenues to be classified at EE/EN and NN categories Manpower computations to be done at drilled down levels Manpower to be classified by assuming offshore ratios at 1 PM : 3 PLs : 8 SW engineers. Onsite ratios would have to computed on case to case basis Close monitoring of plans on a quarterly basis needs to be done Process needs to be automated

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Importance of HRP
1)Each Organisation needs personnel with necessary qualifications, skills, knowledge, experience & aptitude . 2)Need for Replacement of Personnel - Replacing old, retired or disabled personnel. 3)Meet manpower shortages due to labour turnover - Indian Airlines, Gas Authority of India headless for 10 months. 4)Meet needs of expansion / downsizing programmes - As a result of expansion of IT companies the demand for IT professionals are increasing. PSUs offering VRS to employees to retrench staff and labour costs. DOT.COMs firing staff.

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A Model for Human Resource Planning

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Forecasting the Demand for Labor: Judgmental Methods

Bottom-Up (Unit) Forecasting x In this method managers do the forecasting at Unit Level x Care has to be taken to eliminate exaggeration bias and duplication Top-Down Forecasting
x Senior Managers collectively assess best case & worst case scenarios and arrive at a most likely scenario

Delphi Technique
x In this technique the experts do not meet face to face x Each is given questionnaire for forecasting and reasons thereof x The responses are collated and recirculated with another set of questions x Process is done anonymously and within a few rounds the responses tend to converge

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Forecasting the Demand for Labor: Mathematical Methods

Productivity Ratio
x Average no. of units produced per direct unit of labour

Staffing Ratios
x Based on direct manpower deriving the indirect manpower

Multiple Regression
x Can be applied when sufficient historical data exists to determine regression weights

Linear, or Goal Programming

x Optimal staffing levels based on a given set of constraints
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Program Planning Options

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Importance of HRP
5)Cater to Future Personnel Needs - Avoid surplus or deficiency of labour.
Large % of organisations are overstaffed. Redeployment of staff to other units.

6)Nature of present workforce in relation with Changing Environment - helps to cope with changes in competitive forces, markets, technology, products and government regulations.
Shift in demand from one technology to another in IT ITI retrained its existing workforce in the new electronic telephone system.

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Other uses of HRP

i)quantify job for producing product / service ii) quantify people & positions required iii) determine future staff-mix iv) assess staffing levels to avoid unnecessary costs v) reduce delays in procuring staff vi) prevent shortage / excess of staff vii) comply with legal requirements

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Assessing Current Human Resources

Human Resource Inventory

Name Education Skills with skill levels Prior Experience Training Performance Ratings Last Promotion Date Current Reporting Manager Current Location Current Grade Current Salary Current Position & Role

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Assessing Current Human Resources

Most companies use an HRIS Larger Companies use ERPs like SAP, Peoplesoft etc. MIS relating to HRIS are built around the HRIS Some organizations also do succession planning using HRIS for expected separations (retirements/ resignations) and planned internal movements HRIS is also used for determining training needs

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Assessing where the organization is going

1. 2. 3. 4.

5. 6.

Revenue Projections Products and Services Mix in the projection Location based mix of the projections Sometimes limitations in skill supply also determines the revenue projections and product/services mix R & D Projections of the company Non revenue generating Human resources Projections
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Implications of Future Demand

Necessary to perform an analysis for every significant job level and type on a Year-by-Year, Quarter-by-Quarter or Month-by-Month basis Has to be done on skills basis Need to identify the type of demand, e.g., if for a short duration of 3 -6 months we can look at temporary hires Companies policies and philosophy on FTEs or Contractors

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Implications of Future Supply

Increasing Supply
New Hires Transfers In Long Leave Returnees

Decreasing Supply
Voluntary & Involuntary Attritions Retirements Transfer- Outs Sabbaticals

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Implications of Future Supply

Changes in external supply

Increasing trends in availability of fresh graduates/post graduates from colleges Organizations have to tie up with colleges to make the college education more useful to meet their skill needs With recessionary trends, part time job seekers like students, housewives Non-availability of resources with Obsolescent skills Non-availability of resources with high-end skills or multiple skills

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Internal Supply
Inflows & Outflows - The number of losses & gains of staff is estimated.
Turnover/Attrition Rate - refers to rate of employees leaving. = ( No. of separations in a year / Avg no. of employees during the year ) x 100

Absenteeism - unauthorised absence from work. = ( total absentees in a year / Avg no. of employees x No. of working days) x 100 Productivity Level = Output / Input. Change in productivity affects no. of persons per unit of output. Movement among Jobs - internal source of recruitment, selection and placement
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External Supply
External recruitment, selection & placement Advertisements, Manpower Consultants, Campus Recruitment, Unsolicited Applications, Employee Referrals, e-recruitment, Yield ratios - are estimated in the process of hiring applications.
Hiring Process Ad generates 2000 applications. 200 are potential Out of 200, 40 attend interview Out of 40, 30 were offered jobs Out of 30, 25 accepted Out of 25, 20 joined Overall Yield Ratio (2000:20)
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Ratio 10:1 5:1 4:3 3:2.5 2.5:2 100:1

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HRP Process - Determination of Quality of Personnel

Job Analysis
process of collecting and studying information relating to the operations and responsibilities of a specific job. determination of tasks which comprise the job and skills, knowledge, abilities and responsibilities required of the worker for a successful performance and which differentiates one job from all others. products of Job Analysis are Job Description & Job Specification

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Purpose / Use Of Job Analysis

w Organisation

& Manpower planning w Recruitment & Selection w Job Evaluation & Wage, Salary administration w Job Re-engineering w Employee Training & Managerial Development w Performance Appraisal w Health & Safety
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Steps in Job Analysis

Collection of Organisational Structure Information

Selection of Representative Position to be Analysed

Collection of Job Analysis Data

Developing Job Description

Developing Job Specification

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Job Analysis
Microsoft Office

Job Description
1. 2. 3. 4. 5. 6. 7. 8. 9. Job Title Location Job Summary Duties Machine, Tools & Equipments Materials & Forms used Supervision given or received Working Conditions Hazards

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Job Analysis
w Job

Specification

Microsoft Office

Education Experience Training Judgement Initiative Physical Effort Physical Skills Responsibilities Communication Skills Emotional Characteristics Sensory demands sight, smell, hearing, taste etc.

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Job Analysis Methods

Observation Method possible for some, impossible for many w Individual Interview Method Time Consuming w Group Interview Method Group Dynamics may hinder effectiveness w Structured Questionnaire Method Effectiveness depends on quality of questionnaire w Checklist Method Good for tabulating w Technical Conference Method The workers perception may be missed out w Diary Method Most Intrusive but time consuming
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