Lecture 5

Strategic resourcing and

Workforce planning
Part 1 – Strategic resourcing
 1.1. The objective of strategic resourcing

• Strategic resourcing aims to ensure that the organization has the

people it needs to achieve its business goals

Slide 3
 1.2. The strategic HRM approach to resourcing

The integration of business and resourcing strategies is based on an understanding

of the direction in which the organization is going and the determination of:

 the numbers of people required to meet business needs;

 the skills and behavior required;

 the impact of organizational restructuring;

 plans for changing the culture of the organization

Slide 4
 1.3. The components of strategic employee resourcing

Developing the
organization’s
Workforce employee value Talent
Resourcing plans Retention plans Flexibility plans
planning proposition and management
its employer
brand

Slide 5
Part 2 – Workforce Planning
HR planning Recruitment Selection

• How do • How do • How do

we know we get we
what them choose
employee interested the best
resources in us and person
we need? the job? for the
job?

International HRM © Bex Hewett 2014 Slide 7

 2.1. Impact of poor resourcing

• High levels of turnover

• Poor individual performance
• High recruitment costs • Poor organisational performance
• Negative impact on customer
service or product quality
• Poor interpersonal relations
• Negative impact on individual
wellbeing

International HRM © Bex Hewett 2014 Slide 8

 2.2. Why HR planning is important
• Clear links between organisation and HR plans = better competitive advantage

• Better control over staffing costs and ensuring appropriate numbers employed
to meet current and future needs

• Enables better judgements to be made about the skills and attitude mix in the
organisation

• To maintain an appropriate profile of staff (e.g. diversity)

HR planning
International HRM © Bex Hewett 2014 Slide 9
 2.3. Aspects of HR planning
• Identifying which jobs are needed to achieve organisational aims (right
jobs at the right time)

• Forecasting demand and supply:

• future HR needs
• internal supply
• external supply

HR planning
International HRM © Bex Hewett 2014 Slide 10
 2.4. Assessing demand
In order to have adequate future HR needs forecast, following points should be taken
into account:
1. Organization, behaviour and culture
HR implications checklist
- New tasks?
- For whom?
- What competencies needed?
- Relative importance of team/individual behaviour
- Deleted tasks?
- How will managers need to manage?

Slide 11
 2.4. Assessing demand
In order to have adequate future HR needs forecast, following points should be taken
into account:
1. Organization, behaviour and culture
Strategic brainstorming exercise: managers write a corporate goal in the centre and
brainstorm changes that need to take place in each of the four areas, one area at a time

Organization

Culture Corporate goal Formal and

informal system

People Slide 12
 2.4. Assessing demand
In order to have adequate future HR needs forecast, following points should be taken
into account:

2. Employee numbers and skills (demand forecasting)

 It’s the traditional area of forecasting employee number demand based on the
organization’s strategic objectives.
 Both objective and subjective approached can be employed

Slide 13
 2.4. Assessing demand
• Objective methods
– Using information about past labour requirements to plan for the future and
– Taking into account changing requirements influenced by organisational goals,
technology, growth/decline etc.
• Subjective methods
– ‘Top-down’ – senior management make judgement based on the organisational
direction/strategy
– ‘Bottom up’ – dept. managers make bids for resources based on their experiences
on the ‘front line’

International HRM © Bex Hewett 2014 Slide 14

 2.5. Assessing supply
• Internal
– High labour turnover may be a problem for supply (HR need to ask who is leaving
and why – push and pull factors)
– Are the right skills and attributes available internally? (linked to learning &
development strategy)

• External
– When unemployment is high, the potential pool of candidates is bigger.
– But is there a large enough pool of candidates with the right skills and attributes?
– Globalisation provides a potentially larger pool but immigration laws may restrict
movement for certain jobs

International HRM © Bex Hewett 2014 Slide 15

 2.5. Assessing Internal supply
Analysing the current situation and projecting forward
1. Organization, behaviour and culture
- Employee engagement
- Motivation of employees
- Job satisfaction
- Organizational culture
- The way that people are managed
- Attitude to minority groups and equality of opportunity
- Commitment to organization and reasons for this
- ….
Slide 16
 2.5. Assessing Internal supply
Analysing the current situation and projecting forward
2. Current and projected employee numbers and skills (employee supply)
Current employee supply can be analysed in both individual and overall statistical terms.
Factors need to be considered such as:
- Number of employees classified by function, department, occupation, job title,
competencies, skills, qualifications, training, age, length of service, performance
assessment results
- How the internal supply of employees will change and primarily how many will leave
- Current level of employee turnover rate with segmented groups.
- Behavioural aspects: why people leave

Slide 17
2.5. The PESTEL framework for external analysis (1)

The PESTEL framework categorises environmental

influences into six main types:
political, economic,
social, technological,
environmental legal

Thus PESTEL provides a comprehensive list of

influences on the possible success or failure of
particular strategies.

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 The PESTEL framework (2)
• Political Factors: For example, Government policies, taxation
changes, foreign trade regulations, political risk in foreign markets,
changes in trade blocks (EU).

• Economic Factors: For example, business cycles, interest rates,

personal disposable income, exchange rates, unemployment rates,
GDP trends.

• Socio-cultural Factors: For example, population changes, income

distribution, lifestyle changes, consumerism, changes in culture and
fashion.

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 The PESTEL framework (3)
• Technological Factors: For example, new discoveries and technology
developments, ICT innovations, rates of obsolescence, increased
spending on R&D.
• Environmental (‘Green’) Factors: For example, environmental
protection regulations, energy consumption, global warming, waste
disposal and re-cycling.
• Legal Factors: For example, competition laws, health and safety laws,
employment laws, licensing laws, IPR laws.

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 2.5. Assessing External Labor Market

• External supply pool from which employers attract employees

• Components of labor market
• Labor force population: All individuals who are available for selection if all
possible recruitment strategies are used
• Applicant population: Subset of the labor force population that is available for
selection using a particular recruiting approach
 2.5. Labor Market Components
• Applicant pool: All persons who are actually evaluated for selection
• Applicant tracking system - Makes the recruiting process more effective
• Individuals selected for a job - When the candidates reject the offer:
• HR staff members must move back up the funnel to the applicant pool for other candidates
• HR staff, in extreme cases, may need to reopen the recruiting process
 2.5. Unemployment Rates and Labor Markets

• Unemployment rates vary with business cycles

• Strict hiring adopted by companies due to recessionary conditions
• Decreased customer spending
• Increased business competition
• Decreased need for new employees due to developments in technology
 2.5. Different Labor Markets and Recruiting
Industry and Occupational Labor Markets
These jobs represent the health care, retail, and
education industries

Educational and Technical Labor Markets

Considering the educational and technical
qualifications that define the people being recruited
Labor Markets

Geographic Labor Markets

Markets can be local, area or regional, national, or
international

Global Labor Markets

Firms expand by exporting work to overseas labor markets when
doing so is advantageous
 2.6. Recruiting Presence and Image

• Employment brand: Image of the organization that is held by both

employees and outsiders
• Company brand can help generate more recruits through applicant self-
selection
 2.7. Organization-Based
versus Outsourced Recruiting

• Recruitment process outsourcing (RPO)

• Improves the number and quality of recruiting candidates
• Reduces recruiting costs
• Professional Employer Organizations (PEO) and employee leasing
• Employer signs an agreement with the PEO
 2.7. Organization-Based
versus Outsourced Recruiting

• Staff is hired by the leasing firm and leased back to the company for a fee
• Leasing firm:
• Writes the paychecks
• Pays taxes
• Prepares and implements HR policies
• Keeps all the required records for the employer
 2.8. Regular versus Flexible Staffing

• Employers are hesitant to hire full-time employees due to:

• Increased cost
• Economic conditions
• Excessive competition
• Government considerations
 2.8. Regular versus Flexible Staffing

• Temporary workers - Employers can hire their own staff members or

make use of agencies on a rate-per-day/week basis
• Purpose of hiring temporary workers
• Match the firm’s needs with the right workers
• Avoid costs associated with benefits
• Enhance staffing flexibility
 2.8. Regular versus Flexible Staffing

• Independent contractors - Workers who perform specific services on a

contract basis
• Advantageous for the employer as they do not have to pay benefits
• Done by individuals who are:
• Highly skilled
• Highly experienced
• Not affected by familial responsibilities
 Staff on
Staff on permanent
permanent contract. ‘Functional
contract.
HR planning ‘Functional
flexibility’ == applying
flexibility’ applying skills
skills across
across aa wide
wide
range of
range of tasks.
tasks. Both:
Both:
Self-employment -- ‘Horizontal
‘Horizontal flex.’
flex.’ == tasks
tasks outside
outside of
of
immediate job
immediate job
The flexible firm -- ‘Vertical
‘Vertical flex.’
flex.’ == taking
taking onon more
more senior
senior or
or
1: Secondary workers,
internal, numerical junior jobs
junior jobs
and functional flex.

Core group:
Primary workers Sub-
Agency
Internal labour market contracting
workers
Functional flexibility

2: Secondary workers, Two sets

Two sets of
of secondary
secondary workers:
workers:
external, numerical 1. Semi-permanent,
1. Semi-permanent, numerically
numerically flex.
flex. so
so
flex. contracts can
contracts can be
be terminated
terminated easily.
easily. Also
Also
Periphery workers,
Periphery workers, e.g.
e.g. self-employed,
self-employed, or
or functionally flex.
functionally flex.
employed by
employed by another
another organisation.
organisation. Highly
Highly 2. Little
2. Little employment
employment security
security (so
(so numerical
numerical
Out-sourcing
numerically flex.
numerically flex. flex.) Employed
flex.) Employed to to do
do specific
specific job
job (no
(no
functional flex.)
functional flex.)

Atkinson (1984) – see Marchington and Wilkinson, 2012