HUMAN RESOURCE MANAGEMENT – The Present State of Recession in the IT Industry

– As a HR Manager, how are you going to undertake HR Planning at Macro Level to over
this crisis?

We have to take a look at our strategic plan, our mission statement, vision statement, values, and
annual goals.

 Is our strategic framework sufficiently articulated to help us make it through a serious

downturn?
 Has it been sufficiently communicated to our employees so that they are not afraid, they
trust their leadership, and they feel they are headed in a shared, positive direction?

 Asking them to participate in the conversation is an important commitment to utilizing

our employee talent and dedication. Discussing the impact of our strategic framework:
mission, vision, values, and goals, on each employee’s job are the step that helps them
"own" the strategic direction. Without this step - they are just puzzled.

 Be aware of our company's and our industry challenges.

o Is our product or service essential no matter what happens in the economy?

o Does our product save time, save money, or otherwise make itself indispensable
even in a down economy?

o If not immediately determinable, how can we reposition our product or service so

that customers begin to see it that way. The customer loyalty and the brand
recognition we have built over time will become even more critical in a
continuing economic downturn.

 To do contingency planning to identify our potential risks and the affects of economic
uncertainty on our business or function?

o What potential scenarios are most likely to unfold for our organization?

o What to do differently in the various scenarios, and, in the short term, is there any
way to change the potential impact of the various scenarios? As an example, what
areas of your Human Resources department need to change or grow to deal with
an economic downturn?

 Staffing?
  Benefits?

 Employee morale programs?

 Retirement planning?

 Employee training channels?

 We need to communicate that our leadership team is doing forward thinking, forward
planning, and discussing possible less-than-positive contingencies. Most of our
employees don't care what the specific plan is. But, it is critical to their retention and
sense of well-being, that a plan exists, that they know a plan exists, and that they
understand that someone is really minding the shop.

 We further look at your plans for hiring employees this year. For employee morale, and
to look as if the ship has a captain, it is better to decide not to hire additional staff than to
risk having to downsize later.

 If downsizing becomes necessary, deal as humanely as possible with our employees: the
employees you let go and the employees who remain. Communicate, communicate, and
communicate during the whole process. We have to be appearing rational, thoughtful,
and fair in your process for employees to continue to trust us and to retain our position as
an employer of choice.

 Find ways to buffer your employees to minimize the impact of an economic downturn:

o Have telecommuting policies in place.

o Encourage employee carpooling.

o Sponsor brown bag lunches and book clubs.

o Provide training in-house minimizing the need for employee travel and
inconvenience.

o Effectively communicate the redeployment of any internal resources to minimize

employee distress. And, change expectations of the group that has fewer resources
simultaneously.

 Provide investment information - not recommendations - so employees can make good

choices for their future.

 Support more casual dress code policies so employees are not spending the big bucks
either trying to impress or to create an entire formal set of clothing used only for work.
  Adopt Health Savings Accounts (HSAs) so healthy employees can build up savings and
less healthy employees can set money aside for health care costs.

 Offer more team building activities for employees outside of work that are inexpensive,
yet involve employee families in bonding, not in finding expensive recreational activities.
Ice skating, picnics, renting a movie theater, Halloween costume parades at work,
discounted tickets and transportation to sporting events, pot luck suppers, a popcorn
machine and DVDs shown in the company lunch room for families, are all inexpensive
ways to build the team.

Expect these concerns to spill over into the workplace and prepare your managers. They need to
understand that they walk a fine line between expressing concern and asking questions if an
employee's performance changes, and turning into counselors. Counseling is not a role for which
they are trained nor is it advisable to involve themselves too deeply in the personal affairs of
their reporting staff. Pay attention and coach managers who stray too far from the line.

Offer your employees training sessions at brown bag lunches that provide information about
recession-related topics. Educate employees about how they can cut their credit card debt, how
they can make and stick to a budget, and how they can increase their savings return. Offer
educational sessions, too, for the Baby Boomer generation of employees, who will soon be
retiring or working less, stretching retirement savings, and perhaps, how they can avoid retiring.

Putting these plans in place we can make our business, and especially our employees, recession-
proof in the midst of economic uncertainty.

WHAT IS HUMAN RESOURCE PLANNING

Right number of people with right skills at right place at right time to implement organizational
strategies in order to achieve organizational objectives
In light of the organization’s objectives, corporate and business level strategies, HRP is the process of
analyzing an organization’s human resource needs and developing plans, policies, and systems to
satisfy those needs
Setting human resource objectives and deciding how to meet them
Ensuring HR resource supply meets human resource demands.

WHAT IS HUMAN RESOURCE PLANNING Process

Interfacing with strategic planning and scanning the environment
Taking an inventory of the company’s current human resources
Forecasting demand for human resources
Forecasting the supply of HR from within the organization and in the external labor market
Comparing forecasts of demand and supply
Planning the actions needed to deal with anticipated shortage or overages
Feeding back such information into the strategic planning process.

1.Basic Human Resources Planning Model

2.Organizational Objectives
3.Human Resource Requirements
4.Human Resource Programs
5.Feasibility Analysis

Strategic Human Resource Planning

-Links 1 & 5: HR objectives are linked to organizational objectives and planning
-Designed to insure consistency between organization's strategic planning process and HRP.
-So objectives of strategic plan are feasible and
-HR programs are designed around what organizational objectives and strategies require in terms of
human resource goals

Operational Human Resource Operation Planning model.

-Steps 2,3, & 4
-Ensure HRP programs are coordinated and allows the organization to meet its human resource
requirements.

Link 1: Determine Demand

(labor requirements)
How many people need to be working and in what jobs to implement organizational strategies and
attain organizational objectives.
Involves forecasting HR needs based on organizational objectives
Involves consideration of alternative ways of organizing jobs (job design, organizational design or
staffing jobs)
Example - Peak production could be handled by temporary workers or assigning overtime. Machine
breakdowns assigned to maintenance department or handled by machine operators.

Link 2: Determine HR Supply (availability)

Choose HRM programs (supply)
Involves forecasting or predicting effect of various HR programs on employee flowing into, through
and out various job classifications.
First determine how well existing programs are doing then forecast what additional programs or
combination of programs will do
Need to know capabilities of various programs and program combinations.

Determine Feasibility
Links 3 & 4
Capable of being done
Requires knowledge of programs, how programs fit together and external environmental constraints
(e.g., labor force, labor unions, technology created skill shortages) and internal environmental
constraints (skill shortages within the organization, financial resources, managerial attitudes, culture)
Do the benefits outweigh the costs
Difficulty in quantifying costs and benefits.

Forecasting as a Part of Human Resource Planning

DEMAND FORECASTING / SUPPLY FORECASTING
-Determine organizational objectives
-Demand forecast for each objective
-Aggregate demand forecast
-Does aggregate
-supply meet
-aggregate
-demand?
-Go to feasibility analysis steps

Choose human resource programs

External programs
Recruiting
External selection
Executive exchange
Internal programs
Promotion
Transfer
Career planning
Training
Turnover control
Internal supply forecast
External supply forecast

Aggregate supply forecast

Internal Supply Forecasting Information
Organizational features (e.g., staffing capabilities)
Productivity - rates of productivity, productivity changes
Rates of promotion, demotion, transfer and turnover.

External Supply Forecasting

Information
External labor market factors (retirements, mobility, education, unemployment)
Controllable company factors on external factors (entry-level openings, recruiting, compensation]

Demand Forecasting
Information
Organizational and unit strategic plans
Size of organization
Staff and Managerial Support
Organizational design

Considerations in Establishing a Forecasting System

How sophisticated
Appropriate time frame
Subjective versus objective forecasting methods.

System Sophistication
Organizational size
large organizations require more complex forecasting systems and likely to have the required skilled
staff
Organizational complexity
complex career paths and diverse skill requirements lead to more complex forecasting systems
Organizational objectives
the greater the gap between current HR situation and desired HR situation the more sophisticated the
system
Organizational plans and strategies
the complex the plans are the more complex the forecasting system.

Forecasting Time Frame

Depends on degree of environmental uncertainty
Factors creating uncertainty (shortening time frame)
many new competitors, changes in technology, changes in social, political and economic climate,
unstable product demand
Factors promoting stability (longer time frame)
strong competitive position, slowly developing technology, stable product demand.
Subjective VS. Objective Forecasting
Objective is inappropriate when:
Lack expertise to use objective methods
Lack the historical data or HR data base is inadequate
Forecasting horizon is too long for the available objective method.

Demand Forecasting Methods

Delphi Method
Staffing Table Approach
Regression Analysis
Time Series Analysis
Linear Programming.

Supply Forecasting Methods

Skills Inventory
Replacement Charts
Succession Planning
Flow Modeling/Markov Analysis
Computer Simulations
@@@@@@@@@@@@@@@@@@@@
THIS IS THE APPROACH
TO HR PLANNING.

STEP ONE ---IDENTIFYING

***FIRST STAGE
THE DIFFICULT factors, YOU MUST KEEP IN MIND WHILE ''HR PLANNING''.
FACTORS COULD INCLUDE --- GOVERNMENT/ ECONOMIC/LEGAL/SOCIAL
*********************************************************************************
*****
-as the economy grows/declines, the demand for HR resources
changes not only in quantity but also in quality/ types.

-social pressure to provide the right environment for employees.

-political pressure to employ local population, irrespective

of skills/ knowledge.

-legal challenges to recruitment / compensation on

discrimination .

-technology changes means getting right type of people

or provide the right type of training.

-competitive pressure to get the right talent at the right

compensation.

-CORPORATE strategic planning seeks strategic HR planning.

-BUDGET constraint put pressure on HR to get the

best resources for the least.

-sales / production increases in business, puts pressure

on HR to recruit more.

-sales / production decreases in business, puts pressure

on HR to rationalise recruitment.

-new venture means demand for new type of skills/ knowledge.

-acquisitions / mergers means rationalization of HR.

-Organization development means HR implementing new

structure, new culture, new systems etc.

-Job redesign means HR implementing new

methods, new process, new systems etc.

-Globalization means managing HR diversity, new culture

change, new training etc.

-HR challenges / difficulties include

*managing retirement
*managing voluntary retirement schemes
*managing terminations
*managing leave of absence.
*managing part time workers/ causals.
*managing layoffs

-Balancing the INTERNAL SUPPLY ESTIMATES AND

EXTERNAL SUPPLY ESTIMATES.

*INTERNAL SUPPLY ESTIMATES

-staff skills inventories
-management inventories
-replacements requirements
-transition requirements

*EXTERNAL SUPPLY ESTIMATES

-labor market supply
-community attitude
-demographic trends

*MANAGING WORK OPTIONS

-shorter weeks
-flexitime
-telecommuting
-virtual organizations.
==================================
***SECOND STAGE
HR PLANNING SHOULD TAKE INTO CONSIDERATION
INTERNAL COMPANY FACTORS LIKE
******************************************************************
1.Corporate VISION

2. Corporate Mission

3. Corporate Objective

4. Corporate Strategy

5.Corporate Organization Policy/ Budget Guidelines.

6. Corporate HR objective/ strategy

7. Corporate Industrial Relations Policy

8. Corporate Sales forecasts

9. Corporate Product Plans

10. Corporate Product sourcing forecasts.

=============================================
***THIRD STAGE
AS PART OF HR PLANNING , review the following
CHANGING FACTORS WHICH AFFECTS HUMAN RESOURCES
************************************************************************
1.The impact of technological change on task needs.
2. Variations in the efficiency, productivity, flexibility of labor as a
result of training, work study organizational change, new motivations, etc.

3. Changes in employment practices [ e.g. subcontractors or

outsourcing etc ]
4.Other variations due to new legislations like new health requirements,
safety requirements etc.

5.Changes in government policies like tax/ tariff etc

6. Labor demand and supply .

7. Skills levels availability

What should emerge from this analysis / reviews is a "thought out"

and logical staffing demand schedule for varying dates in the future
which can then be compared with the crude supply schedule.
The comparison will then indicate what steps must be taken to
achieve a balance.

===========================================
*** FOURTH STAGE
HR SUPPLY FORECASTING -- CONSIDER THE FOLLOWING
DEMAND AND SUPPLY IN THE JOB MARKET
*********************************************************************************
*
1.EXPERT
-informal internal surveys.
managers prepare their own estimates based on workload.
-------------------------------------------------------------------------------------
-formal external surveys.
planners survey managers, using questionnaires or
or focused discussion.
----------------------------------------------------------------------------------
-delphi techniques
solicit estimates from a group of managers, until the
estimates converge.
============================================
2.TREND PROJECTIONS
-extrapolations
extending past rates of change into the future.
---------------------------------------------------------------------------------
-indexation
matching employment growth with , say, sales.
----------------------------------------------------------------------------------
-statistical analysis
=================================================
3. OTHERS
-planning and budgeting systems
based on strategic and corporate plannings/ budgeting.
---------------------------------------------------------------------------------------
-new venture analysis
making comparisons with similar operations.
-------------------------------------------------------------------------------------
-computer models
using multiple variables.
=================================================
***FIFTH STAGE
HR DEPARTMENT IS A SUPPORT FUNCTION.
HENCE HR PLANNING RELIES HEAVILY ON THE ANNUAL CORPORATE
PLANNING, OBJECTIVES, STRATEGIES AND PLANS.
*********************************************************************************
******************************
In THIS company, HRM is part of senior management.
HRM makes contribution to the development of
-corporate mission statement
-corporate objectives
-corporate strategy.

The senior management team or TOP management would

consists of
-ceo or managing director
-corporate planning manager
-finance manager
-marketing manager
-product sourcing manager
-sales manager
-supply chain manager
-HR manager
etc.

STEP 1[a]
TOP management would
-evaluate the current [ last 12 months] performance against the
objectives / target set previously, which includes return on investment,
profitability , etc and also the performance of various departments
like marketing, sales, HR, product sourcing , etc etc.

STEP 1 [b]
TOP management will also evaluate the current mission,objectives,
strategies and policies.
-----------------------------------------------
STEP 2[a ]
MD will take the summary of the evaluation of the current
performance to the board for review.

STEP 2 [ b ]
Based on the review plus the external environmental factors,
the board will make decisions on
-new mission statement
-new corporate objectives
-new corporate governance
-------------------------------------------------------------

STEP 3[a ]
TOP management will scan and assess the company's
external environment --political/ economic/social/ technology.
to determine the strategic factors that pose as
OPPORTUNITIES / THREATS.

STEP 3[ b ]

TOP management will scan and assess the company's

internal environment --structure/ culture/resources etc
to determine the strategic factors that pose as
OPPORTUNITIES / THREATS.

STEP 3[ c ]
TOP MANAGEMENT will analyze the the strengths / weaknesses
of the organization and pinpoint the problems areas that needs
attention and the strengths that could be exploited.

STEP 4
Based on the above analyses, TOP management will generate,
evaluate, and select the best strategic factors.

STEP 5
TOP management will review and revise [ if necessary ] the
mission statement and corporate objectives.

STEP 6
TOP management will generate and evaluate strategy alternatives
and objectives.

STEP 7
This final corporate mission statement, objectives and strategies
becomes the foundation information for the various departments
to work out their departmental objectives/strategies/plans.

STEP 8
After working out their respective objectives/strategies/plans
and the budgets , the departmental managers send their
respective information to the TOP management for
approval.

STEP 9
On receiving the approved package from the TOP management,
the departmental managers develop the implementation plan.

STEP 10.

NOW you have mission/objectives/strategies/plans/budget/schedules.

======================================================

STEP TWO --- DEFINING

*** SIX STAGE

IN case of HR, which is a department by itself,
MUST discuss with other departments of their
expectations/ intentions on HUMAN RESOURCES.
****************************************************************************

This final corporate mission statement, objectives and strategies

becomes the foundation information for the HR department
to work out your departmental objectives/strategies/plans.

STEP A
Discuss with the various other departments like sales/ production/
distribution/accounting/ IT etc about their requirements
-for manpower
-recruitments
-replacements
-training
etc etc

Once you get their departmental requirements, HRM develops

*INTERNAL SUPPLY ESTIMATES FOR EACH DEPARTMENT/TOTAL

-staff skills inventories
-management inventories
-replacements requirements
-transition requirements

*MANAGING WORK OPTIONS FOR EACH DEPARTMENT / TOTAL

-shorter weeks
-flexitime
-telecommuting
-virtual organizations.
==================================
*** SEVENTH STAGE

-HR PLANNING

HR Planning includes

CURRENT SITUATION/ ANALYSIS OF COMPANY HR

1.Assessment / Audit of the current manpower profile

-numbers
-skills
-ages
-flexibility
-sex
-experience
-capabilities
-character
-potential

and also

-normal turnover,
-staff movements planned
-retirements
-succession planning
etc.

2. KEY SUCCESS FACTORS OF HR

3. HR [ SWOT ] ANALYSIS
-STRENGTHS
-WEAKNESSES
-THREATS
-WEAKNESSES

4. HR MARKET [ DEMAND/SUPPLY]
-SKILL AVAILABILITY
============================================
STEP THREE --- DEVELOPING

*** EIGHTH STAGE

1.HR OBJECTIVES

2.HR STRATEGY

3. HR PLANNING

These include

-Recruitment/ Selection PLAN

-Induction / Orientation PLAN
-Training / Developement PLAN
-Compensation PLAN
-Salary administration PLAN
-Payroll Administration PLAN
-Performance Appraisal PLAN
-Performance Management PLAN
-Industrial Relations PLAN
-Promotions PLAN [ IF ANY ]
-Terminations PLAN
-Transfers PLAN
-Staff amenities. PLAN
-retraining plan
-early retirement plan
-redundancy plan
-changes in workforce utilization plan
-career path plan
-succession plan.
-personnel and career plans
--------------------------------------------------------------------------
===========================================
LASTLY BASED ON THE ABOVE PLANS,
YOU DEVELOP HR BUDGET.

The elements in HR department budget would vary with

-company policy
-budget process
-company accounting system
-nature of the business operation
-HR PLANNING
etc

HERE is a broad set of guidelines.

-recruitment/ selection [ internal/ outsourcing ]

-PLACEMENT contractors [external ]
-salary/ wages
-training/ development [ includes induction/ orientation]
-staff benefits
-staff amenities
-workplace facilities
-workplace safety [ OHS]
-salary contingency
-workers compensation
-staff communication [ includes newsletter/ intranet ]
-labor relations [ legal/ investigations]
-HR administration
-HR travels
etc etc.
======================================================
These plans will help to bring supply and demand into equilibrium,
not just as a one-off but as a continual workforce planning
exercise the inputs to which will need constant varying to reflect
the actual as against predicted experience on the supply side
and changes in production actually achieved as against forecast
on the demand side.

THE ABOVE APPROACH / CONTENTS IS FOCUSED ON

-achieving the corporate objectives/ results.
-achieving the productivity improvements.
-achieving the organization effectiveness.
-achieving the organization efficiency.