in Five Stages
Labour represents a key success factor for many companies, because product or service quality often depends on it. Unfortunately, variations in demand and the uncertainty inherent to long-term forecasting make it difficult for companies to maintain the right number of employees. The following will describe, in five easy stages, how to proceed to properly plan one’s human resource requirements.
Defining human resources planning
Human resources planning involves assessing the supply and demand for labour with which the company will be faced over the next few months or years.
Human resources planning stages
1. Environmental analysis (internal and external)
The environmental analysis involves:
1) Pondering the future of the company: What will happen in the next two years? Five years? (internal environmental analysis)
Does the company foresee:
a) Loss or signing of new contracts
b) Launching of new services
c) Increase or decrease in sales
d) Arrival or departure of competitors
e) Making acquisitions or selling off divisions
f) Acquiring new technologies
2) Identifying the elements that will influence the company’s development (internal environmental analysis)
What will happen with respect to:
a) Labour market
b) Economic marketplace
c) Competition
d) Forecasts on the health of the industry sector
e) Customer expectations
f) Labour force mobility and profile
3) Identifying strengths, competitive advantages and elements to be improved
a) Financial situation
b) Sales volume
c) Profits
d) Stability of personnel
e) Quality/speed of service
Note that such an assessment should be conducted every year.
2. HR requirements forecast
This stage involves clearly identifying the resources the company will need to implement the actions required to achieve its organizational objectives.
The exercise consists of determining the overall picture of HR requirements for each area of the company. It also enables the collection of information useful for planning the progress and promotion of existing personnel.
- What positions will have to be filled?
- How will the current positions change?
- What types of skills will be needed?
- How many people will be needed to do the work?
- When and for how long will they be needed?
- Are there people on the current team that can do the work?
- Are there employees that could do the work, with the help of some retraining?
3. HR availability forecast
The third stage of human resources planning involves assessing the skills of current personnel. It is possible that existing employees may have the skills to meet new requirements or that, after some training, coaching or retraining, would be able to do so.
To do this, the abilities and skills of current employees must be determined. The collection of information in this step may initially have been done when the employee was hired, but must be updated every year during the annual performance evaluation. This is a perfect time for supervisors to discuss career development plans and opportunities with their employees.
- Areas of expertise
- Professional experience
- Performance
- Training and qualifications
- Learning successes
- Career interests, aspirations and projects
4. Gap analysis (reconciliation)
The gap analysis involves comparing the number of positions forecast (future demand) in each job category with the number of employees likely to meet criteria through advancement or promotion. The gap between the two may be measured quantitatively (labour shortage or surplus) or qualitatively (under- or overqualified personnel).
5. HR actions planning
The fifth and last stage of human resources planning involves developing an action plan to bridge the gap noted.
In cases of quantitative gaps, actions could involve
- Hiring
- Recruiting program
- Downsizing (temporary or permanent layoffs)
For qualitative gaps, actions could involve
- Restructuring
- Resource reassignment
- Job enrichment
- Training, coaching, retraining
Finally, an action plan must be developed and put in writing. It must comprise the target objectives, name of people in charge and the schedule for accomplishing each of the activities.