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Strategic Human Resource
Planning

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

Strategic HR Planning is the systematically
forecasts an organization’s future demand for
and supply of employees and matches supply
with demand
...


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At last we can say that Strategic 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
Capable of effectively and efficiently
completing those tasks that will help the
organization achieve its overall strategic
objectives
...


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So SHRP is the process by which management
determines how the organization should
move from its current manpower position to
its desired position
...


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Improves the utilization of human
resources,
Matches personnel activities and future
organizational activities efficiently
...

Coordinates different personnel
management programs and hiring needs
efficiently
...
Assists in the
integration of external environmental
influences, organizational and human
resource conditions
...


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Factor Influencing the demand for labor
1
...

Demand for goods and services
3
...

Rate of production by each employee

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•

•
•
•
•
•

Organizations policies- selection,
recruitment, staffing levels, retirement
...

Available skills within the labor market
Cost of living in the area
Demographic profile of potential recruitment
area
National legislation-Employment law
...
They are broadly categorized as
External, Organizational, and Work fore
factors
...

Work force factors

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

Some external environment such as social,
economics, cultural, political, legal,
technological, may affect the futures HR
demands in the organizations

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Some of the organizational activities
especially the detail budget, long range
plans of sales and production forecasts,
new-venture of the reorganizing the
organization, redesigning the job of the
organization may either increase the
demands for or decrease the demands for
HR for the organization
...
These factors
may increase or decrease of demands of HR
resource
...
g
...




HR demand forecasting is the process of estimating
the future quantity and quality of people required
...
The major external
factors include- competition (both national and
international), economic climate, laws and regulatory
bodies changes in technology and social & cultural
factors
...


The major external factors includecompetition (both national and
international), economic climate, laws and
regulatory bodies changes in technology
and social & cultural factors
...

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Supply refers to both the number and
characteristics of people available for those
particular jobs
...
The supply analysis
covers
...
In another
way, study of a firm’s past employment
needs over a period of years to predict
future needs
...
For example: sales volume and
number of employees needed
Scatter plot: A graphical method used to help
identify the relationship between two
variables
...


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Computerized forecast: Determination of future
staff needs by projecting sales, volume of
production, and personnel required to maintain
this volume of output, using software packages
...
It’s rate that any historical trend, ratio or
relationship will continue unchanged into the
future
...


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

There are two source of supply of human
resources:
 Internal source and
 External source
 Internal: Promotion, transfer, demotion, replacement, skills
inventories etc
...


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Industrial Organization (I/O) Model
Industrial Organization (I/O) Model argues that
the primary determinant of an organization’s
strategy should be the external environment
rather than internal decisions of managers in
which the organization operates and that such
considerations have greater influence on
performance

It assumes that the environment presents threats and
opportunities to organizations, that organizations
within an industry control or have equal access to
resources, and that these resources are highly mobile
between firms
...
It is based on the
ideas of administrative organization and a
collection of productive resources’
...

Resource-based
strategy
theorists argue that sustained competitive
advantage stems from the acquisition and
effective use of bundles of distinctive
resources that competitors cannot imitate
...
This
approach is consistent with the investment perspective
of HRM
...

Under this model it is assumed that resources may not
be highly mobile across organizations as once they are
acquired by a particular organization, that organization
will attempt to retain those resources that are of value
...
”

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Critical components of external environment
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◦
◦
◦
◦
◦

Competition
Industry structure
Government regulations
Technology
Market trends
Economic tends

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Identify primary strengths and weaknesses
Find ways to capitalize on strengths
Find ways to improve or minimize
weaknesses
Examine resources
◦
◦
◦
◦

Physical
Human
Technological
Capital

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 Examine

systems

internal management

◦ Culture
◦ Organization structure
◦ Power dynamics and policy
◦ Decision-making processes
◦ Past strategy and performance
◦ Work systems
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 Goals

should be:

◦ Specific
◦ Measurable
◦ Flexible

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Benefits

◦ Gaining economies of scale
in operations and functions
◦ Enhancing competitive
position vis-à-vis industry
competitors
◦ Providing opportunities for
employee professional
development and
advancement



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◦ Penetration of existing
markets
◦ Developing new markets
◦ Developing new products
or services for existing or
new markets



External Methods

◦ Acquiring other
organizations
◦ Vertical integration

HR Issues

◦ Planning for new hiring
◦ Alerting current employees
◦ Ensuring quality &
performance standards are
maintained

Internal Methods



HR Issues

◦ Merging organizations
◦ Dismissing redundant
employees
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Maintaining status quo due to limited
environmental opportunities for gaining
competitive advantage
Few employees will have opportunities for
advancement
Critical that management identify key
employees and develop specific HR
retention strategies to keep them

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Downsizing or streamlining organization in
cost-cutting attempt to adjust to competitive
environment
Few opportunities and many environmental
threats
Important to develop HR practices to manage
“survivors”

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Increases in efficiency and cutting of costs,
then passing savings to consumer
Assumes price elasticity in demand for
products or services is high
Assumes that customers are more price
sensitive than brand loyal
HR strategy focuses on short-term
performance measures of results and
promoting efficiency through job
specialization and cross-training
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In order to demand a premium price from
consumers
◦ Attempting to distinguish organizational products or
services from other competitors or
◦ Creating perception of difference

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Organization offers employees incentives and
compensation for creativity
HR strategy focuses on external hiring of unique
individuals, and on retaining creative employees

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Business attempts to satisfy needs of only a
particular group or narrow market segment (niche)
Strategic intent is to gain consumer loyalty of
neglected groups of consumers
Strategic HR issue is ensuring employee awareness
of uniqueness of market segment
◦ Thorough employee training and focus on customer
satisfaction are critical factors
◦ Hiring members of target segment who are empathetic to
customers in target segment

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Philosophy
◦ Statements of how organization values and treats
employees; essentially culture of the organization



Policies
◦ Expressions of shared values and guidelines for
action on employee-related business issues



Programs
◦ Coordinated and strategized approaches to
initiate, disseminate, and sustain strategic
organizational change efforts necessitated by
strategic business needs
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Practices

◦ HR practices motivate behaviors that allow
individuals to assume roles consistent with
organization’s strategic objectives
◦ Three categories of roles:
 Leadership
 Managerial
 Operational



Processes
◦ Continuum of participation by all employees in
specific activities to facilitate formulation and
implementation of other activities

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Successful SHRM efforts begin with
identification of strategic needs
Employee participation is critical to linking
strategy and HR practices
Strategic HR depends on systematic and
analytical mindset
Corporate HR departments can have impact
on organization’s efforts to launch strategic
initiatives

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When the internal supply of human
resources exceeds the firm’s demand, human
resource surplus exists
...

Attrition : Attrition is a process whereby as

incumbents leave their jobs for any reason

(voluntary retirement transfer, resignation,
etc), these jobs will not be filled
...
Most employers respond to
the surplus situation with a hiring freeze
...
The hiring freeze dictates that no
recruiting will take place for jobs that will
eventually be eliminated
...
Shortage of
raw materials, decrease in demand, machine
breakdown, shortage of power, etc, are the
reasons for layoff
...
The parent
organization pays reduced salary to the
loaned employees, with the difference
usually paid by the new employer
...

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Across-the-board pay cuts
Reduce outsourced work
Switch to variable pay plan
Expand operations

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If the internal supply can not fulfill the
organization’s needs, a human resource
shortage exists, In case of shortage;
employers may take a number of measures
...

Sub-contracting
Double shifting
Assigning additional tasks
Over timing system
Eliminating less important jobs etc
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Recruit new permanent employees
Offer incentives to postpone retirement
Rehire retirees part-time
Attempt to reduce turnover
Work current staff overtime
Subcontract work out
Hire temporary employees
Redesign job processes so fewer employees
are needed

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Succession Planning is the long-term Human
Relations Strategy of building and holding on
to top talent
...


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 Succession management is a specific
aspect of human resources management
that ensures that senior or particularly
valuable employees are replaced quickly
without loss of effectiveness
 Succession Management takes succession
planning one step further- that is, it is
more encompassing and active
...

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•Opportunities for employees to have new
challenges
•Providing employees a chance to have a
stake in the organization and share in the
organization’s success
•Creating a systematic approach to identifying
succession candidates
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Developing cross-departmental sharing of people
and information

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Working toward a Leadership that rewards managers for
promoting
top employees rather than keeping them for themselves

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Designing career paths that are both vertical and horizontal

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Having a diverse workforce that is representative of the public
it serves

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Building a career development plan for all managers and
professional employees

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Proactive, strategic
human resources
planning for the future

Leadership competencies
are key to future success

Personal responsibility
and Strategic
corporate perspective

Commitment to people
Development, ensuring
Internal development and
Promotion whenever
possible

Integration with
performance management
and other key HR systems

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