Human Resource Planning (DP IB Business Management)

An Introduction to Human Resources

• In common with all resources, a businesses employees , known as its human resources, need to be managed

• Effective human resource management is important as

  • It ensures that the organisation has the right people in the right roles with the right support and with opportunities to succeed, as well as a positive work environment

  • This will lead to higher productivity, improved efficiency and a competitive advantage

 Diagram: effective human resource management

• Staff represent both an asset and a cost to a business

  • Staff are an asset to a business as they bring knowledge, skills, and expertise to the business

    • Staff can increase productivity, drive innovation and enhance customer service, all of which contribute to the success and profitability of the business

    • Staff can help to build a positive reputation for the business through their interactions with customers, suppliers, and other stakeholders

  • Staff also generate costs for a business and, for many businesses, staffing costs are one of the largest costs they have. These costs include

    • Hiring and training workers

    • Managing workers as managers have to be hired

    • Paying the salaries and wages staff

    • Additional benefits such as company cars, pensions, healthcare, etc

    • Letting workers go often requires (redundancy payments)

Human Resources Planning

• Human resource planning focuses on identifying how many and what kind of employees are needed

  • It looks at how employees will be

    • Recruited and deployed (used)

    • Developed and trained

    • Motivated, managed and led

• Staff costs can make up a large proportion of a businesses costs

  • Careful planning and objective monitoring of employee performance are key elements of effective financial and operational control

Human Resources Metrics that are Useful to a Business

Internal Factors that Influence Human Resource Planning

• There are factors inside and outside of the business which can impact on the human resources planning process

Internal Factors which may Impact Human Resources Planning

External Factors that Influence Human Resource Planning

• A range of factors beyond the control of a business can also impact the human resources planning process

Diagram: external factors and HR planning

• Economic conditions

  • The state of the economy, including factors such as economic growth, inflation, and unemployment rates

    • During periods of economic growth, a business may need to focus on attracting and retaining staff to meet increased demand

    • During economic downturns, they may need to implement cost-cutting measures such as redundancies or hiring freezes

• Labour market

  • The supply of suitable employees and the impact of factors such as skills shortages, labour mobility and immigration

    • Spain recently changed its migration laws to recruit more foreigners from overseas for industries with labour shortages and its primary focus for 2023 is to hire carpenters, plumbers, electricians and other workers involved in construction

• Technological advancements

  • Rapid technological change can disrupt industries and job roles, affecting HR planning

    • Automation, artificial intelligence (AI), and other emerging technologies can lead to changes in job requirements, skills needed and workforce composition

    • HR planning must anticipate these shifts and consider re-skilling or up-skilling to meet future workforce needs

• Legal and regulatory environment

  • Laws and regulations related to employment, labour relations, health and safety and immigration

    • In 2021, changes to employment law in Greece provided workers with the right to flexibility to the eight-hour working day where employees are allowed to work up to 10 hours on one day and fewer on another or take time off, as well as the right to not have to respond to emails after hours

• Social and cultural factors

  • Social and cultural factors such as societal values and demographic trends

    • Workforce diversity and inclusion, flexible work arrangements, work-life balance and employee wellbeing are examples of areas where social and cultural factors are external factors that influence workforce planning

    • French laws recognise the custom for a long lunch break and provide for five weeks paid time off for employees, as well as protecting the limit of a 35 hour working week - companies can’t force employees to work overtime  and if they do, they’re well-compensated for it

• Political factors

  • Changes in government policies, political stability and geopolitical factors

    • Shifts in labour laws, changing tax regulations and immigration policies and cross-border trade agreements are often political focuses which can impact human resources planning

    • Australia is currently experiencing a national skills shortage in a number of occupations and its governments plan to fill this gap with a combination of training local Australians and recruiting immigrants - current in-demand skills include construction, civil engineering and nursing

• Industry-specific factors

  • Different industries may face unique external factors

    • Healthcare organisations need to consider factors such as changing regulations, demographic shifts, and advancements in medical technology

• Competitive landscape

  • The environment in which a business competes for labour and the actions and strategies of competitors influence workforce planning

    • HR planning should consider the organisation's position in the market and align recruitment strategies so that the pay and benefits reflect that

    • In the UK, businesses recruiting hospitality, health and social care workers and professional services staff and are starting to seek talent outside traditional sources by focusing on candidates’ skills and potential rather than qualifications and industry experience to widen the pool of candidates