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 demo-
tivates others and it is costly, not only in terms of recruitment, but also because the or-
ganisations 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 ques-
tion 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 pro-
grammes). Depending on the organisation’s vision, mission, goals and objectives, hu-
man 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 ex-
ternal 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:
- To what extent is the work environment conducive for attracting quality job
seekers?