STEPS OF

1. Assessing Current Human Resources

Human Resource planning begins by developing a profile of the
current status of human resources. Basically, this is an internal analysis
that includes an inventory of the workers and skills already available
within the organization and a comprehensive job analysis.

a. Human Resource Inventory: In an era of complex computer

systems, it is not too difficult for most organizations to generate a
human resource inventory report. The input to this report would
be derived from forms completed by employees and then checked
by supervisors and the personnel department. Such reports would
include a list of names, education, training, prior employment,
current position, performance ratings, salary level, languages
spoken, capabilities and specialized skills for every employee in
the organization.
From a human resources planning viewpoint, this input is valuable
in determining what skills are currently available in the
organization. It can act as a guide for considering new pursuits for
the organization and can take advantage of opportunity to expand
or alter the organization's strategies. This report also has value in
other personnel activities, such as selecting individuals for training
and executive development, for promotion, and for transfers.
The profile of the human resources inventory can provide crucial
information for identifying current or future threats to the
organizations ability to perform. For example, the organization can
use this information to identify specific variables that are assumed
to have a particular relationship to training needs, productivity
improvement and succession planning. A characteristic like
technical obsolescence can, if it begins to permeate the entire
organization, adversely affect the organization performance.
One of the newer devices for providing skills inventory information
in the Human Resources Information System (HRIS). This system is
designed to quickly fulfilled the personnel information needs of
the organization with almost no additional expenditure of
resources.
Some organization also generate a separate executive inventory
report. This covers individual in middle management and top
executive position. Such a report considers individual managers
 and the position they occupy. However, when conduct with the
position information, it adds a new dimension to the planning
activity by highlighting those position that may become vacant, or
deaths of the incumbent. Against this list of position can be
placed the individual manager inventory to determine if there is
sufficient managerial talent to cover both the expected and
unexpected vacancies.

b. Job Analysis: While the human resource inventory is concerned

with telling us what individual employees can do, job analysis is
more fundamental. It defines the jobs within the organization and
the behaviors necessary to perform these jobs. Job analysis
obtains information about jobs, and it uses that information to
develop job descriptions and job specifications and to conduct job
evaluations. These, in turn, are valuable in helping managers
identify the kinds of individuals they should recruit, select and
develop, as well as providing guidance for decisions about training
and career development performance appraisal and compensation
administration.

2. Assessing Where the Organization Is Going

The organizations objectives and strategies for the future
determine future human resource needs. That is, the number and mix of
human resources are a reaction to the overall organizational strategy.
Demand for human resources is a result of demand for the organization's
products or services. Based on its estimate of total revenue, the
organization can attempt to establish the number and mix of human
resources needed to reach these revenues. In some cases, however, the
situation may be reversed. Where particular skills are necessary and the
supply of these skills is scarce, the availability of satisfactory human
resources will determine revenues. This might occur, for example, in a
data-processing consulting firm that finds it has more business
opportunities than it can handle. Its only limiting factor in building
revenues may be its ability to locate and hire staff with the qualifications
necessary to satisfy the consulting firm's clients. In most cases, however,
the overall organizational goals and the resulting revenue forecast will
provide the major input determining the organization's human resource
demand requirements.
As a result, before we can estimate future human resource needs some
formal statement is required of what course the organization plans to
take in the future, defined in terms of the sales or revenue forecast This
forecast should include not only a base dollar amount but a breakdown
on how these dollars will be generated. The particular products that
management expects to sell, or services that it expects to provide, will
be important inputs in the determination of the employee mix necessary
for the organization in future periods.

3. Implications of Future Demand

Once an assessment of the organization's current human
resources situation has been made and the future direction of the
organization in terms of revenue forecasts has been considered, a
projection of future human resource needs can be developed.
It will be necessary to perform a year-by-year analysis for every
significant job level and type. In effect, the result is a pro-forma human
resource inventory covering specified years into the future. These pro-
forma inventories must obviously be comprehensive and therefore,
complex. Organizations usually require a heterogeneous mix of people.
Since people are not perfectly substitutable for each other within an
organization, a shortage in engineering cannot necessarily be offset by
transferring employees from the purchasing area where there is an
oversupply. lf accurate estimates are to be made of future demand in
both qualitative and quantitative terms, more information is needed
than just to determine that, for example, in eighteen months we will
have to hire another l50 people. It is necessary to know what types of
people are required. Accordingly, our forecasting methods must allow for
the recognition of specific job needs as well as the total number of
vacancies.

4. Implications of Future Supply

Estimating changes in internal supply requires the organization to
look at those factors that can either increase or decrease its human
resources. As previously noted in the discussion on estimating demand,
the forecast must cover every level within the organization.

5. Increasing Supply
An increase in the supply of any unit is human resources can come
from a combination of three sources: new hires, transfers-in or
individuals returning from leaves. The task at predicting these new
inputs can range from simple to complex.
New hires are easy to predict, since they are self-initiated. A unit recruits
to meet its needs and hence, at least in the short term, the number and
types of new hires that will be added can be determined with high
accuracy.
It is more difficult however to predict transfers in to a unit, since they
often depend on concurrent action in other units. While the net effect to
the total organization by a lateral transfer, demotion or promotion may
be zero, there are clear effects on individual departments and the mix
within departments.
Finally, the net effect on internal supply by people returning from ' leaves
must be considered. This would include absences due to maternity,
military, or sabbatical leaves. Such increases however are usually easy to
estimate, since they are usually for some fixed duration--two months, six
months, two years, and so forth.
Decreasing Supply
Decreases in the internal supply can come about through retirements,
dismissals, transfers out of the unit; layoffs, voluntary quits sabbaticals
prolonged illnesses, or deaths. Some of these occurrences are easier to
predict than others. The easiest to forecast are retirements, assuming
that a specific age criterion exists within the organization. If mandatory
retirement occurs at age seventy, there is no difficulty in forecasting.
Those individuals reaching their seventieth birthday will be required to
terminate their ties with the organization. In some organizations, this can
be modified by allowing the individual one-year delays-for example, up
to age seventy-two. However, this can only be done with the agreement
of both the employee and the organization. It is therefore totally
controlled by management and easy to forecast accurately. At the other
extreme, voluntary quits, prolonged illnesses, and deaths are difficult to
forecast. Deaths of employees are the most difficult to forecast because
they are usually unexpected. Although very large organizations can use
probability techniques to estimate the number of deaths that will occur,
such techniques are of course useless for forecasting the exact positions
that will be affected. Voluntary quits can also be predicted by utilizing
probabilities when the population size is fairly large.
In between the extremes, transfers, layoffs, sabbaticals, and dismissals
can be forecast within reasonable limits of accuracy. Since all four of
these types of actions are controllable by management-that is, they are
either initiated by management or are within managements veto
prerogative-each type can be reasonably predicted. Of the four, transfers
out of the unit, such as lateral moves, demotions, or promotions up, are
the most difficult to predict because they depend on openings in other
units. Layoffs are more controllable and forecastable by management,
especially in the short run.

6. Estimated Changes in External Supply

Recent graduates from schools and colleges expand the supply of
available human resources. This market is vast and includes everyone
from high school graduates to individuals who have received highly
specialized training at the graduate level. Entrants to the work force from
sources other than schools include housewives who are seeking full time
or part-time work to supplement the family income, women returning to
work on a full time basis in the capacity of primary breadwinner,
students seeking part-time work, and individuals returning from military
service. Of particular importance in this category are women. Past high
levels of inflation and accelerating divorce rates, as well as changing
attitudes, aspirations, and career expectations, have all acted as forces to
increase the number of women entering the labor market.
Migration into a community, increases in the number of unemployed,
and employed individuals who are seeking other employment
opportunities all represent additional sources for the organization to
consider as potential expanders of its labor supply.
Traditionally, it should be noted that consideration of only those supply
sources identified above tends to understate the potential supply
because many people can be retrained. Therefore, the potential supply
can differ from what one might conclude by looking at the obvious
sources of supply.

7. Matching Demand and Supply

The objective of human resource planning is to bring together our
forecast of future demand and supply. The result of this effort will be to
pinpoint shortages both in number and in kind; to highlight areas where
overstaffing may exist (now or in the future); and to keep abreast of the
opportunities that exist in the labor market to hire good people, either
to satisfy current needs or to stockpile for the future.

Obviously, the most important concern must be given to the

determination of shortages. Should an organization find that the demand
for human resources will be increasing in the future, then it will have to
hire additional staff or transfer people within the organization or both, to
balance the numbers, skills, mix, and quality of its human, resources.
A SPECIAL CASE IN HRP: RETRENCHMENT

1. Outplacement
Although outplacement services differ, they are intended to
provide career guidance for displaced employees. Guidelines for such an
activity include communicating what is to come; identifying the
displaced employee; retraining those productive employees who can be
placed elsewhere in the organization; and assisting with resume writing,
interviewing techniques, career counseling, and job searching.

2. Layoffs
Layoffs can take many forms. They can be temporary or
permanent. Temporary layoffs usually occur during slack periods when
the work, loads do not warrant such a large work force. As soon as the
work resumes to its normal level, workers are recalled. Although this is a
cost cutting measure it can result in turning workers into cyclical
employees and also increase a company's unemployment insurance
premiums.
Proper human resource planning, leaving the work force at the proper
staffing level, can help reduce this yo-yo" effect. However, proper
staffing may mean a permanent layoff for other employees. When this
occurs, it is hoped that outplacement services are available.
Unfortunately, many workers have been placed on permanent layoff and
have joined countless others in periods of long unemployment.

3. Leaves of Absence Without Pay

One means of cutting labor costs temporarily is to give workers the
opportunity to take leaves of absence without pay. This may provide
time for an employee who is financially capable to leave the organization
temporarily in pursuit of personal interests. These could range from
attending college to engaging in a plethora of other endeavors.
Individuals offered this leave are usually those whose jobs may be
eliminated in the future. Thus this concept serves as a proactive method
to help employees prepare for upcoming changes.

4. Loaning
The loaning of valuable resources to other organizations is a
means of keeping the loaned" employees on the organization's payroll
and bringing them back after the crisis has subsided. Under the loaning
activity, usually higher-level managers are sent on special projects with
government or quasi-government agencies. The organization pays these
loaned" managers a reduced salary, with the difference usually paid by
the agency. While an organization may ultimately lose some of these
managers, some that have been loaned do return.

5. Work Sharing
Two people split an eight-hour workday, with the remaining time being
spent on individual pursuits. Two people hold one job. and the cost to
the company is no greater than if only one person held the job. In
retrenchment, this option may keep good employees from leaving the
company. They may use the time to do some things they have wanted to
do. And if the company recovers, it has not lost a valuable employee.