STRATEGIC HUMAN RESOURCE MANAGEMENT

1. STRATEGIC HUMAN RESOURCE MANAGEMENT PRESENTATION ON HUMAN RESOURCE PLANNING GROUP I

2. GROUP MEMBERS • BETTY MATHEW • SHRADHA GARG • VISHAL VATS • PREMLATA TUTI • DAKSH AGRAWAL • ASHUTOSH SHARMA • NEHA MARWAH • MANSI SHARMA • RAVI ROSHAN DUNGDUNG • JUDE SINGH • PREETI ABHILASHA MINZ • ANKITA KEVIN NATAL • PARIMAL PARAG

3. Human Resource Planning is the process of forecasting a firm’s future demand for, and supply of, the right type of people in the right number. HRP is the process by which management determines how the organization should move from its current manpower position to its desired manpower position. INTRODUCTION

4. ACTIVITIES REQUIRED FOR HRP • Manpower planning consists of a series of activities: • Forecasting future manpower requirements • Preparing an inventory of present manpower • Anticipating problems of manpower • Meeting manpower requirements

5. FACTORS AFFECTING HRP Environmental uncertainties Organizational growth cycles and planning. HRP Type and strategy of organization Outsourcing Labor market Time horizons

6. Key Objectives of HRP • Prevent Overstaffing and Understaffing • Ensure the organization has the right employees with the right skills in the right place at the right times. • Ensure the organization is responsive to changes in its environment. • Provide direction and coherence to all HR activities and systems. • Unite the perspectives of line and staff managers

7. OBJECTIVES OF HRP • To forecast economic and business environment • To estimate future demand of numbers and types of skills by various industries • To ensure more effective utilization of HR • To make labor supply projections for the future • To ensure effective labor supply to different industries through activities such as interacting with educational institutions. • To prevent overstaffing and understaffing • To ensure employee availability • To ensure that the firm is responsive to the environment • To provide direction to al HR activities • To build line and staff partnerships MACRO HRP MICRO HRP

8. STRATEGIC MANPOWER PLANNING It Assists Human Resource Managers to Strategies Development Plans. Its Importance.

9. STRATEGIC MANPOWER PLANNING • It captures different talent pools. • It captures career plans and grooms right number of individuals.

10. HRP and the Changing Environment

11. Factors that enhance significance of HRP Competitive Business Environment Growth of services economy Government Legislations and Regulations Technological Advancement Significance of HRP Labour Market changes Knowledge economy and knowledge workers Increase in Productivity

12. Competitive Business Environment • Pressure to increase revenue and cut down costs. • Firms starting to become lean. • Poaching increasingly challenges employee retention. • Increased attrition and employee turnover in industries. • E.g. Increased contractual or part time hiring.

13. Manufacturing Economy to Service Economy • Jobs increasing in service sector than in manufacturing. • For e.g. shifting focus from production, chemical or civil industry to IT, Telecom or banking. • Shift of focus from Employee skills to employee competency and talent. • Occupational shift from manufacturing sector to knowledge sector.

14. Technological Advancements • Technologies are rapidly changing and so are their production processes and other supporting functions. • Result is changing job specifications and descriptions. • Increased need to recruit suitable human resource at the right time.

15. 4. Knowledge Economy and KnowledgeWorkers Several industrial sectors including manufacturing , are becoming knowledge and skill intensive, with new innovation resulting in quality improvements and cost reductions. The numbers of jobs in manual and skilled categories are going down in the knowledge economy.

16. 5. Productivity Increases: • Competition has contributed to rising productivity. Labour productivity in Indian industries has increased steadily since the mid –nineties and number of workers has been declining steadily.

17. 6. Labour Market Changes • The transformation of the labour market in recent years is another factor that has implications for HRP. • A labour market is a geographical region where the supply and demand of labour interact.

18. 7. Government Legislations and Regulations • Government policies and regulations relating to employment influence HRP. • Affirmative action requires firms to hire women, members of minority groups, and disabled people. The reservation of jobs and seats in educational institutions limits both supply and demand.

19. External Environment Internal Environment Strategic Planning Human Resource Planning Forecasting Human Resource Requirements Comparing Requirements and Availability Forecasting Human Resource Availability Demand = Supply Surplus of workers Shortage of workers No Action Restricted hiring, Reduced hours, Early retirement, layoff, downsizing Recruitment Selection

20. HR Demand forecasting • Estimating the future quantity & quality of people required. The basis of forecast depends upon the sales plan & the annual budget. • HR demand forecasting considers 2 factors: • Internal • external

21. HR Demand forecasting • Demand forecasting helps in : • Quantifying the jobs necessary for producing a given number of goods & providing necessary services. • It helps to determine what staff mix is desirable in future. • Assess appropriate staffing levels to avoid unnecessary cost. • Prevent shortages of people where & when they are needed most. • Helps the company to monitor legal compliance with regard to reservation of jobs.

22. Demand forecasting techniques • Qualitative methods • Estimation-people in position estimate the number of people the firm will require in the next year. • Expert opinion-panel of experts forecast HR requirements for particular future business scenarios. • Delphi-experts go through several rounds of estimates. No face-face meetings. • Group brain storming-face-to-face discussion based on multiple assumptions about future business direction. • Nominal group technique-face-to-face discussion • Simple averaging-simple averaging of viewpoints c)Sales force estimates-used when new products are introduced by a firm. Sales personnel estimates the number of employees needed based on their estimate of demand of product.

23. Demand forecasting techniques • Quantitative methods. • Trend analysis and projection-based on past relationship between a business factor related to employment and employment level itself • Simple long run trend analysis-extrapolates past relationship between volume of business activity and the employment levels into the future. • Regression analysis-regresses employment needs onto key variables. • Simulation models-uses probabilities of future events to estimate future employment levels • Workload analysis-based on actual content of work • Markov analysis-probabilistic based on past relationship between business factor related to employment and employment level itself.

24. HR Supply Forecasting Supply forecasting – measures the number of people likely to be available from within & outside the organization. Reasons for supply forecasting: • Helps to quantify number of people & positions expected to be available in future to help the organization realize its plans • Helps to clarify staff mixes that will exist in the future. • Prevents shortage of people where & when they are most needed. • Assess existing staffing levels in different parts of the organization. • Monitors expected future compliance with legal requirements of job reservations.

25. HR Supply forecasting • Supply forecasting can be done through : • Existing human resources • Internal sources • External sources

26. Supply Forecasting Techniques • Present employees- Analysis is facilitated by HR Audits. The audits of non managers are called skill inventories & those of the management are called management inventories. • With technological advancements HR inventories have become computerized. The Human Resource Information System(HRIS) is a computerized inventory.

27. Skills inventory: an example

28. Techniques for Internal Supply • Turnover rate- number of separations during the year/ average number of employees during the year*100 • Condition of work & absenteeism- Number of persons – days lost * 100 avg no. of persons * no. of working days • Productivity level • Movement among jobs • Inflows & outflows- Determination of the number of losses & gains is made.

29. Estimated Internal Labour Supply for a given firm

30. External supply • External hires need to be contacted when suitable internal replacements are not available. A growing number of firms are now using computerized Human Resource Information Systems to track the qualifications of hundreds or thousands of employees. • Several agencies make projections of external labor market conditions & estimates of the supply of labor to be available in different skill categories. • The Institute of Applied Manpower Research(IAMR) publishes the Manpower Profile- India Yearbook.

31. STRATEGIC HUMAN RESOURCE IMPLEMENTATION Why 80- 90% organizations fail to achieve their organizational long term objectives ? Ans. Wrong implementation of strategies.

32. STRATEGIC HUMAN RESOURCE IMPLEMENTATION • Recruit new permanent employees • Rehire retirees part time • Work current staff overtime • Subcontract work out • Hire temporary employees • Redesign Job processes so that fewer employees are needed. • Hiring Freezes • Do not replace those who leave • Offer early retirement incentives • Reduce work hours layoffs • Reduce outsourced work • Employee Training • Expand Operations MANAGING SHORTAGES MANAGING SURPLUS

33. Link between Business Strategy and HRP

34. Business Strategy is the determination of the long term goals and objectives of an organization, and allocation of resources necessary for carrying out these goals. • HR strategy should be aligned to business strategy to bring about competitive advantage for the firm. The attributes, motivation, development, priorities and performance should directly support the company’s strategic goals. It can be done by: • People recognized as critical to business • Strategic Human Capital Management such as innovative approaches to every link in the HR Value Chain- Recruitment, Development, Motivation, Performance Management and Reward. • Prepare business and its people to meet future demand for talent and competition for best human resource.

35. Classification by Porter(1985)

36. Classification by Miles and Snow (1984)

37. SUCCESSION PLANNING Involves identifying key management positions that the organization cannot afford to have vacant. PURPOSE • Facilitates transition when an employee leaves. • Identifies development needs of high potential employees and assists with their career planning .

38. Replacement Chart Identify key positions and possible successors for each of these positions . For Example :- J. Smith V.P Marketing C.Williams Productions Manager 15 months R.Jones Sales Director Ready now S. Anderson Director Marketing Research 1 year

39. Succession planning helps • To ensure that key positions remain filled. • To identify critical training and development needs of both individual managers and the organization as a whole .

40. Pros and Cons of Disclosing Succession Planning Disadvantages Advantages Do not tell Tell

41. Aggregate planning • It is a part of planning process which anticipate the need for groups of employees in specific , usually lower level jobs( for ex., number of customer service representatives needed) and the general skills employees need to ensure sustained high performance.

42. Steps involved • Forecasting the demand for employees • Unit forecasting ( Bottom up planning) • Top down forecasting • Plan for an adequate supply of employees to meet the current demand.

43. Unit Forecasting • In unit forecasting ,each individual unit, department, or branch of the organization estimates its future needs of the employees. For example, each branch of a bank might prepare its own forecast based on the goals and objectives each branch manager has for the particular office. These estimates are then presented to subsequent layers of the management, who combine and sum the totals and present them to senior management for approval. This technique has the potential for being the most responsive to the needs of the marketplace because it places responsibility for estimating employees needs at the “point of contact” in service provision or product production.

44. Top down forecasting • This involves senior managers allocating a budgeted amount for employees payroll expenditures and then dividing the pool at subsequent levels down the hierarchy. Each manager receives budget from her/his supervisor and then decides how to allocate these funds down to the next group of managers, this technique is similar to sales and profit plans in many organization whereby each unit is assigned a budgeted amount and then required to make decisions on developing those resources in the manner most consistent with business objectives. Although this technique may be efficient , as senior management allocates HR costs within a strict organization wise budget, there is no guarantee that it will be responsive to the needs of the market place, Allocations are based solely on what organization can afford, without regard to input concerning demand and market place.

45. Estimating the existing supply of human resource • Markov Analysis – It describes the probability of employees staying with the job category, moving to another job, or leaving the organization over a given period usually one year. It uses a transition probability matrix that is established based on historical trends of mobility. • For example, we will assume that there are three job classifications in the restaurant: servers, hosts and buspersons.

46. Transition probability matrix for a restaurant

47. CHALLENGES IN HRP • OUTSOURCING – Serves as a source of HR for a firm. • Serves as a way for filling the gaps that exist in the HR plan, or shortage in the workforce • Decision may be driven by business objectives

48. OUTSOURCING PROCESS There are 4 stages of the outsourcing process • Analysis and Evaluation • Contracting and Negotiation • Initiation and Transition • Stabilization and maintenance of outsourced relationship

49. OUTSOURCING PROCESS – DETAIL • Stage 1 – Analysis and Evaluation • Retain HR talent • Do not outsource HRP • Consider alternatives to outsourcing • Stage 2 – Contracting and Negotiation • Evaluate Vendor organization • Design internal organization

50. Contd…… • Stage 3 – Transition • Employ a phased approach to transition • Build a transition team • Stage 4 – Stabilization and Improvement • Build in continuous improvement and flexibility at the vendor