Factors Affecting In Human Resources Planning

HRP is influenced by several factors. The most important factors that affect HRP are

(1) type and strategy of the organization
(2) organizational growth cycles and planning
(3) environmental uncertainties
(4) time horizons
(5) type and quality of forecasting information
(6) nature of jobs being  filled and
(7) offloading the work.

1. Type and Strategy of the Organization: The type of the organization determines the production processes involved, the number and type of staff needed and the supervisory and managerial personnel required. HR need is also defined by the strategic plan of the organization. If the organization has a plan for organic growth then the organization needs to hire additional employees. On the other hand, If the organization is going for mergers and acquisition, the organization need to plan for layoffs, as mergers can create, duplicate or overlap positions that can be handled more efficiently with fewer employees.

The organization first decides whether to be reactive or proactive in HRP.   Organizations either carefully anticipate the needs and systematically plan to fill the need in advance (proactive) or can simply react to the needs as they arise (reactive). Likewise, the organization must determine the width of the HR plan. Organizations can choose a narrow focus by planning in only one or two HR areas like recruitment and selection or can have a broad perspective by planning in all areas including training and remuneration.

The nature of the HR plan is also decided by the formality of the plan. It can decide to have an informal plan that lies mostly in the minds of the managers and personnel staff or can have a formal plan which is properly documented in writing

The nature of the HR plan is also depended upon the flexibility that is practiced in the organization. HR plan should have the ability to anticipate and deal with contingencies. Organizations frame HRP in such a way that it can contain many contingencies, which reflect different scenarios thereby assuring that the plan is flexible and adaptable.

Figure 2.1: Factors Affecting HRP.

Figure 2.1 summarizes the five factors that influence an organization while framing its strategic HRP.

2.            Organizational Growth Cycles and Planning: All organizations pass through different stages of growth from the day of their inception. The stage of growth in which an organization determines the nature and extent of HRP. Small organizations in the earlier stages of growth may not have well-defined personnel planning. But as the organization enters the growth stage they feel the need to plan its human resource. At this stage, the organization gives emphasis on employee development. But as the organization reaches the mature stage it experiences less flexibility and variability resulting in a low growth rate. HR planning becomes more formalized and less flexible and less innovative and a problem like retirement and possible retrenchment dominates planning.

During the declining stage of the organization, HRP takes a different focus like planning to do layoff, retrenchment, and retirement. In a declining situation planning always becomes reactive in nature towards the financial and sales distress faced by the company.

3.            Environmental Uncertainties: Political, social, and economic changes affect all organizations and the fluctuations that are happening in these environments affect organizations drastically. Personnel planners deal with such environmental uncertainties by carefully formulating recruitment, selection, training, and development policies and programs. The balance in the organization is achieved through careful succession planning, promotion channels, layoffs, flexi-time, job sharing, retirement, VRS, and other personnel-related arrangements.

4.            Time Horizons: HR plans can be short-term or long-term. Short-term plans span from six months to one year, while long-term plans spread over three to twenty years. The extent of the period depends upon the degree of uncertainty that is prevailing in an organization's environment. Greater uncertainty, shorter the planned time horizon, and vice versa.

 

Table 2.1: Degree of Uncertainty and Length of Planning Period

 

Short Planning         period-             uncertainty/ instability	Long planning period- certainty/ stability
Many new competitors Rapid changes in social and economic conditions	Strong competitive position Evolutionary, rather than rapid social, political,   and technological change
Unstable product/ service demand patterns Small organizational size, poor management practices (crisis Management)	Stable demand patterns Strong management practices.

 

Source: Elmer H. Burack and Nicholas J. Mathis, Human Resource Planning- A Pragmatic approach to manpower Staffing and development, Illinois, Brace-Park Press, 1987, p. 129.

5.            Type and Quality of information: The information used to forecast personnel needs originate from a multitude of sources. The forecast depends to a large extent upon the type of information and the quality of data that is available to personnel planners. The quality and accuracy of information depend upon the clarity with which the organizational decision-makers have defined their strategy, structure, budgets, production schedule, and so on.

Table 2.2: Levels of HRP Information

 

Strategic Information		General   Organizational Information	Specific        Information Necessary for HRP
Product mix  Customer mix		Organizational structure Information flows	Job analysis Skills inventories
Competitive emphasis		Operating and      capital budgets Functional area objectives	Management inventories
Geographic       limits market	of	Production schedules Distribution channels	Available training and development programs
		Sales territories  Production processes	Recruitment sources
		Level of technology Planning horizons	Labour market analysis  Compensation programs Constitutional provisions and labor laws
			Retirement plans Turnover data.

 

Source: Leap& Crino, Personnel/ Human Resource Management, p. 161.

6.            Nature of Jobs Being Filled: Personnel planners need to be really careful concerning the nature of the jobs being filled in the organization. Employees belonging to lower levels who need very limited skills can be recruited hastily but, while hiring employees for higher posts, selection and recruitment need to be carried out with high discretion. Organizations need to anticipate vacancies far in advance as possible, to provide sufficient time to recruit a suitable candidate.

7.            Outsourcing: Several organizations outsource part of their work to outside parties in the form of subcontracts. Outsourcing is a regular feature both in the public sector as well as in the private sector companies. Many organizations have surplus labor and hence instead of hiring more people, they go for outsourcing. Outsourcing is usually done for non-critical activities. Outsourcing of non-critical activities through subcontracting determines HRP.