Becamex Business School

HR STRATEGY AND PLANNING

Human Resource Management (HRM351) 1

 LEARNING OBJECTIVE
➢ Understand the importance of HR strategy & HR planning.
➢ Understand the link between organizational strategy and
the HR planning in determining the demand for labor,
predicting future labour supply and matching labour demand
and supply.
➢ Understand the importance of succession planning to the
survival and success of a business.
➢ Understand the relationship between the organization’s
competitive advantage and HR strategy.
HR Planning |2
Employee
life cycle

HR Planning |3
HR Planning |4
 Strategic Planning

HR Planning |5
Company Strategy - HR Strategy

HR Planning |6
HRM Introduction |7
HRM Introduction |8
Factors
determining
Workforce
Demand

HR Planning |9
WHEN DO ORGANIZATIONS NEED HR PLANNING?
● Start-up
● Expansion/downsizing
● More/ less demand for products/ services
● Changes in business goals
● Develop skills to compete with rivals
● Labor laws protecting the rights of employees more
effectively in terms of wages, holidays and child labor
are enforced
● Internal movements of employees
HR Planning | 10
 Human Resource Planning
Human resource planning is a process by which
an organization ensures that it has
● The right number and kinds of people
● At the right place
● At the right time

HR Planning | 11
 Human Resource Planning
● Linked to the organization’s overall strategy.
● Overall plans and objectives must be
translated into the number and types of
workers needed.
● Senior HRM staff need to lead top
management in planning for HRM issues.
 Employment Planning
the Strategic Planning Process
 Forecasting
Leading Indicators
Demand
Trend Analysis
Task Analysis
Forecast
of labor

Supply

Transitional Matrix
Leading Indicators: Determine the ratio between
Performance and required numbers of employees
based on programmatic assumptions
● Professors/students
● Nurses/patients
● Tour guides/tourists
 Trend Analysis
Trend Analysis: Applying
statistical models that predict
labour demand for the future,
given objective statistics from
the previous years.
 Task Analysis

Example: Pizza Restaurant *FTE: Full-time Equivalent

Transitional matrix
 Options for reducing a surplus
OPTION SPEED OF RESULTS AMOUNT OF SUFFERING CAUSED

Downsizing Fast High

Pay reductions (pay cuts) Fast High

Demotions Fast High

Transfers Fast Moderate

Work sharing Fast Moderate

Hiring freeze Slow Low

Natural attrition Slow Low

Early retirement Slow Low

Retraining Slow Low

 Options for avoiding a shortage
OPTION SPEED OF RESULTS ABILITY TO CHANGE LATER

Overtime Fast High

Temporary employees Fast High

Outsourcing Fast High

Retrained transfers Slow High

Turnover reduction Slow Moderate

New external hires Slow Low

Technical innovation Slow Low

 Apply knowledge
A public accounting firm of 250 employees realizes they
have a surplus of 15 support staffs (not auditors).
What should they do?
A. Hiring temporary workers
B. Offer early retirement
C. Downsize people in those positions
D. Wait for attrition and implement a hiring freeze for
those positions.
HR planning
Becamex Business School

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