HR Planning

HR Controlling
3BE214
Daniela Černá

DEPARTMENT OF HR MANAGEMENT UNIVERSITY OF ECONOMICS, PRAGUE | W. CHURCHILL Sq. 4 | 130 67 Prague 3 | kp.vse.cz
 HR Agenda
• HR Administration
• Job Analysis & Design
• Recruitment and Selection
• Onboarding
• Performance Management
• Compensation and Benefits
• Learning and Development
• Health, Safety, and Security
• Employee Relations and Communication
• Organizational Development

2
 Human resource planning
BRIEF INTRODUCTION

“The process of forecasting future human resources

requirements to ensure that the organization will have the
required number of employees with the necessary skills to
meet its strategic objectives“

The focus of Human Resource planning is to ensure that the

organization:
• has the right number of Human Resources
• with the right capabilities
• at the right times, and
• in the right jobs
 Strategic importance of
HRP
Helps organization:
• Anticipate and avoid shortages and surpluses of human
resources
o Maximize the use of Human Resources and ensure their ongoing
development
o Control and reduce labor costs
• Meet goals and objectives
o To secure the Production Capacity required to support Organizational
objectives
• To synchronize HR activities with the organizational
objectives
• To increase the organization‘s productivity
 Planning objectives
• Attract and stabilize workers (employees, specialists) of
the required qualitative and quantitative composition
• To make the best use of the labor potential of each
individual employee and the work collective as a whole
• Predict problems arising due to possible surplus or
shortage of staff
 Planning includes
• Forecasting the future needs of the organization in
personnel (for its individual categories)
• Study of the labor market (market of qualified labor
force) and a program of measures for its "development„
• Analysis of the organization's workplace system
• Development of programs and activities for personnel
development
 Steps in the HRP process

Environmental Analysis of the Planning and

Forecasting
Analyzing the scanning & availability of Implementing
future HR
corporate level Internal candidates HR program to
needs
strategies Assessment of balance supply
(Supply) (Demand)
Workforce and demand
Environmental scanning
Condition of the economy

Market and competitive trend

New or revised laws relating to HR

Social concerns (health care, childcare, educational priorities)

Technological change

Demographic trends
 Internal Assessment of
Workforce
• Analyzing the jobs that will need to be done
• And the competencies currently available to do them

What jobs exist now?

How many individuals are performing each job?

How essential is each job?

What jobs will be needed in future?

 Human resource planning
model
Forecasting labor supply
Considerations
• Organization‘s current
internal candidates
• Changes to the external labor
force (general economic
conditions, labor market
conditions, occupational
market conditions)
ENVIRONMENTAL
SCANNING
Forecasting labor demand
Techniques used Quantitative techniques Qualitative techniques
• Skills inventories and • Trend analysis • Nominal group technique
management inventories • Ratio analysis • Delphi technique
• Replacement charts and • Scatterplots
replacement summaries • Regression analysis
• Succession plans
• Markov analysis
Gap analysis
Comparing forecasted demand to forecasted supply to determine if there is
a projected labor equilibrium, shortage or surplus
SOLUTION ANALYSIS
Determine the next course of action to reach the point of labor equilibrium
 Forecasting supply of
external candidates GENERAL ECONOMIC CONDITIONS
Forecasting supply of external
candidates • Interest rates
• Wages rates
• Inflation
• General economic conditions
• Unemployment rates
• Labor market conditions
• Occupational market conditions
• ...

LABOR MARKET CONDITIONS

(DEMOGRAPHICS)

• Education levels
• Age
• Gender
• Marital status
• ...

OCCUPATIONAL MARKET CONDITIONS

• Relevant occupations (as applicable)

• Engineers
• Skilled labor
• Accountants
• IT professionals
 Forecasting supply of
internal candidates SKILLS INVENTORIES/MANAGEMENT
Forecasting supply of internal INVENTORIES
candidates
• Summary of current employees‘/management
qualification, education, experience, interests, skills,
• Skills inventories and management inventories
managerial responsibilities
• Replacement charts and replacement summaries
• Succession plans
• Used to identify eligibility for transfer/promotion
• Markov analysis

SUCCESSION PLANNING REPLACEMENT CHARTS

• Ensuring supply of successors for key jobs so that • Depiction of who will replace whom in the event of job
careers can be effectively planned & managed opening
• Includes: • Internal candidate age, present performance rating,
• Analysis of demand for managers and professionals promotability status are listed
• Audit & projection of likely future supply
• Planning individual career paths, career counseling
• Accelerated promotions
• Planned strategic recruitment
REPLACEMENT SUMMARIES

MARKOV ANALYSIS • List of likely replacements for each position

• Indicates relative strengths/weakness, current
• A method of forecasting internal labor supply that positions, performance rating, promotability, age and
involves tracking the pattern of employee movements experience
through various jobs and developing a transitional
probability matrix
Management Replacement Chart
 Markov analysis
ANDREY MARKOV

• A Russian mathematician, born in 1856

• Early research focused on number theory, later developed into probability theory.
• Focused on the probability of mutually dependent events
• Introduced the concept of chained events that formed the basis for Markov chains
and what we now refer to as MARKOV ANALYSIS
 Markov analysis
Assistant Store Department
Store Managers Managers Section Managers Managers Sales Associates Exit
90% 10%
Store Managers 12
11 1

11% 83% 6%
Assistant Store Managers 36
4 30 2

11% 66% 8% 15%

Section Managers 96
11 63 8 14

10% 72% 2% 16%

Department Managers 288
29 207 6 46

6% 74% 20%
Sales Associates 1 440
86 1066 288

Forecasted Supply 15 41 92 301 1072 351

 Forecasting hr needs
(demand) | quantitative
TREND ANALYSIS
Forecasting HR needs (demand)
Quantitative approaches • Predict future needs based on past employment levels

• Trend analysis
• Ratio analysis
• Scatter plot RATIO ANALYSIS
• Regression analysis
• Ratio of business activity and number of employees
needed, e.g. Sales revenues per person

SCATTER PLOT

• Used to determine whether two factors (business

activity and staffing levels) are related

REGRESSION ANALYSIS

• Examines the statistical relationship between business

activity and employee
 Forecasting hr needs
(demand) | Qualitative
NOMINAL GROUP TECHNIQUE
Forecasting HR needs (demand)
qualitative approaches • Involves a group of experts meeting face to face
• Steps include:
• Independent idea generation,
• Nominal group technique
• Clarification and open discussion
• Delphi technique
• Private assessment

DELPHI TECHNIQUE

• Judgmental forecasting method involving outside

experts as well as organizational employees
• Ideas are exchanged without face-to-face interaction
and feedback is used to fine-tune until consensus is
reached
 Summarizing human
resources requirements
STAFFING TABLE

A pictorial representation of all jobs within the organization,

along with the number future employment requirements
(monthly or yearly)

Job Title Department Anticipated Openings

Total Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec
General Manager Administration 1 1
Director of Finance Administration 1 1
Human Resource Officer Administration 2 1 1
Collection Clerk Administration 1 1
Groundskeeper Maintenance 4 1 1 2

Service and Maintenance Technician Maintenance 5 1 2 2

Water Utility Engineer Operations 3 2 1
Apprentice Lineperson Operations 10 6 4
Water Meter Technician Operations 1 1
Enginnering Technician Operations 3 2 1
Field Technician Operations 8 8
Senior Programmer/Analyst Systems 2 1 1
Programmer/Operator Systems 4 2 1 1
System Operator Systems 5 2 3
Customer Service Representative Sales 8 4 3 1
Managing HR Surplus and
Shortage
• Reducing the number of employees
o Downsizing
o Rightsizing

• Increasing number of employees

o HR activities – EVP definition, hiring, internal promotions, Talent
programs….

Economic, Structural
reasons
 HR Plan
• A plan of organizational and technical measures is being
developer based on the human resource management
strategy to ensure its implementation,

• The plan contains:

o a set of specific actions in relation to human resources,
o terms and methods of their implementation,
o determines the resource needs of the organization.

• The plan is drawn up for one calendar year and can be

revised during this period.

• Creation of a plan of organizational and technical measures

and its implementation, in fact, is a process of strategic
planning of human resources.
 Strategic HR planning model

Business strategy

External Internal
environment environment

Overall
HRM strategy

HR Employee
Resource Reward
development Relationship
strategyи strategy
strategy Strategy
 Conclusion
• Personnel planning serves both to achieve the strategic
goals of the organization (sustainable competitiveness,
long-term prosperity, long-term development) and to
meet the professional needs of employees (promising
work, fair wages, professional growth, career
advancement).
 HR
Controlling

DEPARTMENT OF HR MANAGEMENT UNIVERSITY OF ECONOMICS, PRAGUE | W. CHURCHILL Sq. 4 | 130 67 Prague 3 | kp.vse.cz
 Controlling| leading
questions
• Why and how are indicator systems used in HR and
what are typical examples?
• How are indicators defined and implemented?
• What is the added value of employee and how can it be
estimated?
• Is it possible to estimate the ROI of large scale
investments in Human Resource Management?
Control Loop

Corrective
Target
Actions

Causes Target/Actual
Analysis Deviation
Selected Indicators SHRM
HR Marketing & Training & retention
Recruiting Development
• Employer ranking • Days of training/employee • Turnover rate (general,
• Number of applications • High-Potential rate differentiated)
• Cost per hire • Average time on current level • Tenure
• Time to fill (HiPos) • Employee commitment
• Early turnover (during • Internal placement rate • Reason for leaving
probation period) • Trainee rate
WORKFORCE/ COMPENSATION & PERFORMANCE &
ORGANIZATION BENEFITS PRODUCTIVITY
• Average age • Labor cost/total costs • Revenue/employee
• Female/male ration • Labor costs/employee • Human Capital Value Added
• Women in leadership • Tariff employees (%) (HCVA)
positions (%) • Compensation structure • Human Capital ROI
• Span of control • Sick leaves/employee
• Temporary contracts (%) • Accidents/1000 employees
 Cost per Hire
• Advertising cost
• Candidate travel cost
• Executive search retainer
and contingency fee
• Selection tools and
measures
• Salary of employees
involved in recruiting
• Cost for facilities of the
recruiting organization
• Market research
• Opportunity cost related to
involved line employees
• Cost of recruiting
infrastructure
• Referral bonuses
• HR marketing events
• Sing-on bonuses
• Relocation costs
• Onboarding costs
Time to Fill

?
 Relevant indicator
Dimenions
What?
Which indicator will be used?

Why?
For whom?
To which objective does
Who is the customer the indicator relate?
of the indicator?

How?

Which sources and methods are

used to calculate the indicator?
 Human Capital Value
Added
Non-Human
Capital Value Creation

Total Costs – Labor

Costs
Products
Revenue

Human Capital

Labor Costs

Human Capital
Value Added =( Revenue – (Total Cost – Labor Cost )) / FTE