Employee resourcing
Introduction
No government or organisation can afford to have too many people working as it is a cost that needs to be controlled. Similarly, no government or organisation can perform well if there are not enough, well trained and motivated workers. With the current trend of globalisation, governments and organisations require the ability to respond to human resource requirements and challenges at all times. There are no any other ways governments and organisations can be effective in production and service delivery without conscious development and commitment to effective employee resourcing. This is not an easy task because employee resourcing is a continuous process, which requires careful decision making, strong commitment and use of enormously scarce resources including information, time, and money. However, although administrators and managers may find it unrealistic to develop and utilise human resource plans that can effectively ensure that staffing functions are properly done (because of the above mentioned constraints); experience has shown that treating employees as capital and hence developing appropriate measures for acquisition, placement, and retention will always pay.
Therefore, at the end of this chapter, learners should be able to:
· Explain why the government or any organisation has to plan for human resources.
· Know the status of human resource planning in a given ministry/department or organization.
· Describe the human resource planning process, the challenges faced and how to overcome them.
· Acquire techniques for resolving budgetary constraints conflicts in HRP.
Employee resourcing as innovation in people management Employee resourcing is a phrase in human resource management that has been in continuous development since the 1990s within human resource management. It is a philosophical shift from manpower planning, which actually had more to do with quantitative aspects of manpower and qualitative concerns of employees as scarce resources, rather than just power to be acquired and utilised. In this regard, McKennan & Beach (2002: 116) looks at employee resourcing as the process of acquiring and utilising human resources in the organisation which involves a number of activities to ensure that there is sufficient quantity and quality of human resources available to meet organisational objectives. Developing the same argument, Price (2007) has raised some important points about employee resourcing in saying that resourcing is a strategic approach to managing people by minimising costs, maximising employee value and obtaining the correct combination of behavioural attributes for the job and the organisation.
There are two main theories that provide the understanding of employee resourcing. The first is the resource dependency theory. The thesis of this theory is that employees are a scarce resource that should be carefully acquired, developed and retained. The second is the human capital theory that considers employees as capital because of their individual, group, and organisational knowledge they possess and is a strong base for competitive advantage. The two theories cement the argument that rational administrators and managers cannot overestimate the importance of strategic acquisition, utilisation, development and retention of valuable scarce resource/capital. Strategic human resource management in people management is the process of acquiring employees and starts with human resource planning. Therefore, the following section will cover some critical issues in human resource planning process.
What is human resource planning?
Armstrong (2003) defines human resource planning (HRP) as a ‘both quantitative and qualitative process of ensuring that the organisation has the right people at the right time doing the right job’. The emphasis is on employee competencies and their stability rather than the precision of the numbers obtained through rigorous forecasting techniques. Furthermore, Pattanayak (2006) considers HRP as a process of analysing an organisation’s human resource needs under changing conditions, and developing the solutions necessary for satisfying those needs. Therefore, an organisational mission, goals, objectives, strategies and policies must guide HRP.
The focus of HRP is on the following:
1. To have the right skills and jobs at the right time,
2. To forecast the types of human resources needed,
3. To ensure replacements will be available and be prepared to fill vacant posts,
4. To ensure recruitment policies meet the present and future number of jobs and qualities,
5. To ensure that there is effective utilisation of human resources,
6. Facilitate personnel procedures for the present and future jobs e.g. recruitment, placement, training, career planning etc.
Human resource planning model
There are various models in HRP although seemingly they aim to achieve the same objective of ensuring that the organisation has effective means to acquire, utilise, reward, develop and retain staff. Some models are inclined to traditional manpower planning (Walker 1980; De Cenzo & Robbins 1998; Pattanayak 2006) while others are more fashionable in reflecting current thinking in HRM (Ivancevich 2004; Torrington et al. 2005). However, for the purpose of convenience the model by Ivancevich is used here as pictured in Figure.
Figure ; Human resource planning model
The model begins with the review of an organisational strategic plan or corporate business strategy, which tells about the future of the organisation in terms of vertical or horizontal growth in business or service volume as expected in the mission, goals and objectives. For example, for the private sector, the future of the business may lie with growth, survival, mergers, closing down, or diversifying. The business strategy will be followed with the question on whether human resources will be required and what the best resourcing strategy is. Price (2007) has proposed three types of resourcing strategies namely, reallocation of tasks among employees, promotions and transfers and lastly, recruitment. The success of the first strategy will depend much on the extent to which the organisation has staff with multiple attributes capable of handling different tasks. The second strategy is about reallocating available human resources to positions and places where they are best put to work. That is, vertical and horizontal staff movement. This is common in many organisations and becomes very successful if the organisation has a strong career and succession plan and job rotation systems in place. Recruitment and selection from within and outside the organisation is often used as strategy for filling human resource gaps. This strategy is fully covered in chapter 5. Therefore, human resource strategy will involve a number of steps in decision making, which primarily, will aim to close the gap between human resource demand and supply as indicated by the arrows. If there is more demand than supply, then decisions have to be made regarding resourcing strategies described above. If there is surplus, it means strategies to reduce human resource available have to follow, including layoffs, use of part time staff or early retirement. The planning scenario will involve a number of processes and activities including the assessment of the present and future environments of an organisation in the context of plans and human resource implications and the economic, political and social factors such as population, labour market trends, technology, legislation, financial markets, and investments.
Labour market analysis trends in human resource turnover will help to determine the strength and ability of an organisation to retain staff. For example, high turnover demotivates others and it is costly, not only in terms of recruitment, but also because the organisations may be left with poor performers. However, some level of turnover is healthy because the organisation will be able to attract new ideas from outside, which are essential for creativity and innovation. Labour turnover is measured by using different methods depending on the type of question that needs to be answered (Torrington et al. 2005) has summarised the following methods:
· Labour turnover index: The percentage of leavers over the average number of employees.
· Survival Rate: percentage of the original employees’ cohort who have survived for several years.
· Half-life index: the number of years of cohort to survive by half.
· Stability index: Tendencies for the older job cohort to remain in the organization.
Labour demand forecast examines the present and future needs (looking at the activities and budgets, current inventory of staff, known waste, and human resource programmes). Depending on the organisation’s vision, mission, goals and objectives, human resource managers will use these findings to forecast and plan how such demand will be met.
Labour supply forecast deals with the identification of the existing human resources, the likely effect of changing working conditions if any, and sources of internal and external labour supply. The data from labour demand and supply forecast are compared and decisions are made in the process of human resource planning. Human resource plans are prepared using various methods to assist in decision making. The most common methods are managerial judgment (top, middle, lower levels) by banking on the power, authority and responsibility conferred to their positions, and the use of more scientific methods such as ratio trend analysis between different categories of employees. Another is to compare the present and future activity levels and budgets and work study by determining man hours and hence the total number of people in each and with reference to:
· Areas where there is underutilization.
· Areas where there is overstaffing.
· Number and competence levels required.
· Available opportunities from internal and external sources.
Human resource plans will depend on environmental analysis. In this case, a number of questions have to be answered. For example:
1. To what extent is the work environment conducive for attracting quality job seekers?
2. Does the organisation have an effective system for effective human resource utilisation?
3. To what extent do employees feel proud of their jobs and the organisation?
HR plans must also be supported by evidence from operational effectiveness analysis. This will include to what extent an employee is utilised, employees’ productivity and readiness to respond to a changing environment through flexible work schedules. The development of human resource plans will focus on resourcing, retention, development, utilisation, work flexibility, downsizing, and productivity strategies. If a government or an organisation ignores human resource planning, this will have serious problems in attracting and retaining the desired staff, being caught up in shortages/surpluses, failing to competitively respond to the environment and failing to utilise and develop staff to meet present and future demand.
Given the above importance of HRP, administrators and managers have reasons to take a step back and reflect on the status of manpower in their organisations.