6. Human Resources Planning and Analytics

 

6. Human Resources Planning and Analytics

 

6.1.HUMAN RESOURCES PLANNING AND STRATEGY

It’s certainly been a fast start to what is set to be another turbulent year in an already tumultuous decade – a decade that has seen the world of work upturned before our eyes. With the current economic headwinds, all business functions - including HR - will be required to deliver even more enterprise value than in prior years. This represents both an opportunity – and a threat – to people analytics functions and the focus on data-driven HR, Green, (2023).

Human resource planning (HRP) is a strategy used by a company to maintain a steady stream of skilled employees while avoiding employee shortages or surpluses. Having a good HRP strategy in place can mean productivity and profitability for a company.

   Figure 1:-Human Resources Planning         Michela Buttignol/ Investopedia

6.2.THE HR PLANNING PROCESS

Human resource planning (HRP) describes an ongoing, data-driven process in which a company systematically plans for the future in terms of human resources to ensure that available jobs are suited to appropriately skilled employees. It identifies key HR initiatives for the period ahead that will help the organization achieve its strategic goals and maintain its competitive advantage without staffing shortages or excesses.

 Figure 2:-Human Resources Planning Process 

6.3.FORECASTING DEMAND FOR LABOUR

Definition of labour demand forecasting:- Labour demand forecasting is a function of workforce management that helps businesses determine where, when, what role, and how many employees are needed to successfully meet projected customer demand.

An HR Plan helps companies identify future labour demands, reducing the risk of shortages or excess supply. HR departments forecast human resources needs, weighing factors based on factors for success.

How companies forecast is weighted on several factors.

Strategic Plan

Legal Issues

Competition

Technology

Demographics

Budgets

6.4.HR DEMAND FORECASTING METHOD

HR demand forecasting typically involves the following steps: Analyzing past and current workforce data, including turnover rates, employee performance, and skills inventory. Identifying future business goals and objectives, including growth plans, new products or services, and market expansion.

Forecasting Methods are as follows:

1. Nominal Group Method:- a focus group of experts brainstorms on changing employee demand, shares ideas, records them, ranks them, and votes for the top 3-5.
2. Delphi Method:-Experts predict future events through surveys and opinions, with HR summarizing results and creating reports. The process continues until a consensus on future trends is reached.
3. Trend Projections:-Trend projections use two methods: extrapolation and indexation. Extrapolation uses past information to predict future employment needs, while indexation matches employment growth with specific indices, such as sales to production ratio.

6.5.HUMAN RESOURCES SUPPLY

Human resources supply is the source of workers to meet demand requirements, obtained either internally (current members of the organization’s workforce) or from external agencies.

• Internal suppliers are the existing employees who can be promoted to new positions, transferred to other departments or satellite offices, and could be demoted.
• External supply is hiring from outside the company.

6.6.HR RESPONSE AND PLAN FOR SUPPLY AND DEMAND

Figure 3:-Human Resources Forecasts 

HR departments must have strategies to manage workforce supply and demand, either by reducing the workforce due to over-supply or increasing it in response to labor shortages.

Plan for Reducing Employees 

• Leaves Without Pay
• Incentives to Leave
• Termination
• Layoff
• Attrition
• Hiring Freeze
• Job Sharing
• Early Retirement
• Part-time Employment
• Plan for Labour Shortages
• Hiring New Employees
• Contract Work
• Outsourcing
• Crowdsourcing
• Overtime

6.7.HUMAN RESOURCES INFORMATION SYSTEMS (HRIS) AND HR ANALYTICS

Figure 4:-HRIS concept

A human resource information system (HRIS) is a software that stores, processes, and manages employee data, including names, addresses, and dependents. It aids HR in core HR processes, such as recruiting, applicant tracking, and benefits administration. HRIS can be considered a smart database, making data more accessible and usable through interaction, processes, and reporting capabilities.

HRIS benefits

HRIS software can breathe new life into a company's HR processes and procedures. While the benefits may vary depending on the system a company opts for or the modules they choose, the following are the key benefits of HRIS software:

• Expedites tasks.
• Reduces paperwork
• Simplifies predictive analysis and visualizations.
• Empowers employees.
• Improves productivity.
• Maintains compliance.
• Offers security and privacy.

Types of HRIS software & HRIS functions

HRIS software caters to various customer types, from small to large enterprises, with differences in features and range. Midmarket enterprises often have less functionality than large enterprises, resembling the automobile market where quality and amenities vary between different models.

HRIS Functions are as follows.

Figure 4:-HRIS Functions

The importance of HRIS

An HRIS is crucial for compliance, workforce insight, and downstream integration of systems requiring employee data. It helps prevent costly errors and reduces engagement by preventing manual data entry in multiple systems. By integrating applications, companies can avoid errors and improve employee experience and engagement, ensuring a more efficient and effective workforce management system.

Conclusion

HR planning is a strategic process that helps companies anticipate future human resources needs. It involves reviewing business goals, identifying gaps, developing a plan, and measuring progress. Forecasting estimates future human resources needs using methods like nominal group, Delphi, and trend projections. HR departments estimate internal supply and demand and develop strategies to reduce or increase the workforce. Human Resources Information Systems (HRIS) track data for recruitment, selection, training, performance management, and health and safety. HR analytics improve work performance by matching candidates to job descriptions and measuring employee success.

Reference.

• Green, D. (2023). The best HR & People Analytics articles of January 2023. Data-driven HR Monthly.[Accessed 05 04 2024].
• Poba-Nzaou, P., Galani, M., & Tchibozo, A. (2020). Transforming human resources management in the age of  Industry  4.0:  a matter of, survival for  HR professionals. Strategic HR Review, 19(6), 273-278.[Accessed 05 04 2024].
• van den Heuvel,S., &  Bondarouk,  T.  (2017).  The rise  (and fall?)  of  HR analytics. Journal  Of  Organizational  Effectiveness:  People  And  Performance, 4(2), 157-178.[Accessed 05 04 2024].
• Thakre.N. (2020).  Human Resource (HR)  Analytics For  Organizational  Segment-3 Transformation and Effectiveness. 50(1).[Accessed 05 04 2024].
• https://www.investopedia.com/terms/h/human-resource-planning.
• Human Resource Planning Process: A Practitioner's Guide - AIHR
• https://hrforecast.com/hr-demand-forecasting-techniques/#:~:text=HR%20demand%20forecasting%20typically%20involves,or%20services%2C%20and%20market%20expansion
• https://slideplayer.com/slide/8817703/
• https://www.techtarget.com/searchhrsoftware/definition/HRIS