Workforce Planning

Introduction

Human Resource Management, or HRM for short, is one of the most critical elements in running a prosperous business, although it is not always treated with the time and focus that it deserves. To completely understand what HRM is and its impact on the success or failing of a company, we first need to know what it means.

The function of Human Resource Management is to recruit, develop and use the staff within an enterprise in the manner in which is most appropriate to achieving the aims and objectives of the organisation.

This effectively translates to “using individuals in the business in the best way possible” although that would be an over-simplified assertion that doesn’t reflect the true nature and scope of HRM. HRM describes all of the techniques and procedures that are involved in making certain that all members of staff in a business are pulling in the same direction, and much more importantly, in the right direction.

At its center, HRM combines three primary elements that are essential to the productive output of the workforce. These factors include motivation, management and leadership, and organisational structures. As a result, HRM can be employed on all levels of management in your business, not just the shop floor personnel, and it may even be used to alter the structure of those levels of management at the same time.

Why is it Necessary?

Quite simply, businesses don’t run without employees. As a result, some level of human resource management is necessary for any business to operate at all, let alone in an effective and prosperous manner. Even if you don’t appreciate exactly how HRM affects the every day working of your company you will surely be employing some kind of HRM in order to keep trading.

Human Resource Management has an effect on every level of your corporate activities with varying degrees of visibility. The most evident HRM tasks involve the hiring and firing of employees as well as monetary systems such as payroll. It may also impact on motivation and communication within your company, which are much more intangible factors but are crucial nonetheless. Bad HRM practice in these less visible arenas can have a negative impact on your company but go unnoticed for long periods of time.

It also goes without saying that every company is different and will have a specific set of issues to face and opportunities to take advantage of. HRM can work as a versatile tool that converts workforce power into financial gains and can adapt to fully utilise the talents of your company. Without it, your competitors may be afforded the chance to prosper where you missed out.

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Impact on Business

Whilst this all appears very interesting and significant, how does it actually influence the daily operations of your company, and more importantly, how will it help to boost the performance and success of your firm?

Recruitment & Training

This is probably the area of a company that is most associated with human resources – recruitment. Almost every company in the world, and particularly companies that are growing, have to recruit people to work for them. Either current employees have left, or new possibilities have arisen which mean there are jobs that need to be filled. HRM can make sure your recruitment system gets the right people into the right jobs at a cost-effective price.

It’s also important to keep your staff training procedures up to date to make certain that your workforce is fully capable of doing the job they are there to do. Regardless of whether it is a fresh piece of legislation or a new bit of technology that alters the market, there is an on-going requirement to keep your company up-to-date and prepared to take advantage of any opportunity. There is a phrase that states that “if you are not moving forward you are going backwards” which can be applied to business.

You may also find that the costly practice of external recruitment can be avoided if your company has adequate training facilities in place. It is far easier to teach an existing staff member to a higher level and then use outside recruitment to fill the gap left at the lower level than it is to hire directly to a higher level.

Employee Relations

When you have the right people working for you it is important to keep them working for you, and to make sure they are doing a decent job. This can be achieved via good employee relations. The most obvious employee relations practice is the art of motivation – a wide topic by itself – but other employee relations issues may include disciplinary and grievance management. All of these factors are an essential part of the overall HRM strategy.

Finances

You cannot keep employees at your company by good motivational methods only. They’ll want to be paid a fair amount and on time. Payroll must be one of the very first systems that is created when you launch a company, but they still need to be taken care of and updated when staff join, leave or switch pay grade. Poor management of your payroll program can quickly lead to disaster in terms of your workforce.

Industrial Relations

Numerous companies will have to work with trade union or other workers rights organisations which can be incredibly forceful when defending the interests of their members. When dealing with such bodies it is advantageous to have individuals within your company who can communicate comfortably with them whilst keeping the interests of your own company in mind as well.

Among the quickest ways to tell that private limited companies have very good employee interaction is to ask current staff if they are happy in their jobs.

Workforce Planning

We have seen the effect that human resource management may have on a business and generally it seems like good HRM will have a positive effect on any company. As a rule, this is the case, but good HRM does not just occur overnight. It should be planned according to the targets of the organisation and then performed thoroughly.

One way to implement HRM concepts to your company is via workforce planning – a system that has the goal of making sure your workforce can complete the upcoming tasks required for your business to be successful. It can be defined as:

Definition

Workforce planning is the process of anticipating in advance the human resource requirements of any organisation, both in terms of the quantity of employees necessary and the appropriate skill mix. Recruitment and training procedures are devised with a long term emphasis in order to make sure that the organisation is able to operate without being limited by a lack of appropriate labour.

Requirements

Analysing your workforce requirements is essential to the proper planning of your workforce in the short-term and long-term future. If your business is subject to seasonal shifts in demand, such as in the tourism industry, or is prone to seasonal fluctuations in workforce then your workforce planning must take these factors into consideration.

Recruitment

Whether you are hiring people externally or from inside your existing workforce you still need to find the correct person to fill the position. As part of your workforce planning you ought to draw up a job description that describes the role that will be undertaken as well as a person specification which will give an indication of the sort of person that would be a good fit for the job and your business.

Selection

The selection procedure can be as involved or as easy as you deem necessary. Outside of regular job selection interviews there are several ways you can learn about about candidates for your jobs, including aptitude tests, group interviews and even psychometric testing. These advanced techniques might not be applicable to all workforce planning projects but are an alternative to employers.

Training & Development

The main goal of staff training and development is to develop a better standard of worker within your organisation. Workforce planning can use training to plug upcoming gaps in the skill set of your staff which is commonly quicker and more cost effective than external recruitment. Training and development can also go some way towards motivating your employees.

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Workforce Motivation

It practically goes without saying that properly motivated workers are going to deliver a better standard of output and have a greater quantity of output than unsatisfied workers. This improved working rate will inevitably lead to a rise in the profitability of a business.

Essentially, all motivational tactics can be separated into two models that are often called the “carrot and stick” approach to motivation. The analogy relates to the two approaches to make a donkey carry your possessions, either by tempting it with a carrot, or threatening it with a hit from a stick!

Whether you use the carrot approach or the stick approach will generally depend on your own management approach, as well as the business you work in and the type of individuals that you hire. Irrespective of your approach, motivational factors can be separated into a further two groups; financial and non-financial motivators.

Financial

The most typical financial motivators are payment plans. You can pay workers in many different ways, either a set amount for a fixed service, by an hourly or daily fee, or a rate linked to production, such as a commission structure. Whichever method is used, the workforce is motivated to work because they will get money for doing so.

Another financial motivation technique involves what are known as incentive schemes, where additional financial rewards are handed out for good performance. This may include commission beyond a fixed salary, performance-related pay levels or even offering a share of company profits.

Non-financial

Many human resource theorists have their own thoughts about the different factors that motivate people to work, although these are often seen as a bonus to a worker. It is widely acknowledged that money is the main motivational factor for the majority of people.

The Changing Face of HRM

As previously mentioned, HRM is a flexible application that is there to match up the features of your staff to the goals of your business. As a result, it has had to keep adapting to a corporate climate that is constantly changing for one reason or another. Moreover, it is a good idea to continuously review your own HRM policies and not to rest on your laurels.

Maybe there is a new piece of government law that will have an impact of how your business can carry out its operations, or maybe a fresh manufacturing technology will come along that can revolutionise your industry. Either way, if you want to make sure that your workforce is performing to its maximum level then your HRM strategy should be adaptive enough to cope with an ever-changing economy. After all, what might seem like a danger to many will often appear as an opportunity to a good entrepreneur.

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