HRM1501 – Introduction to Human Resource Management
TOPIC 2 - HRM Functions
WORKBOOK 05: Human Resource (HR) Planning
5.1 Introduction
The reason why organisations embark on an HR planning process is to ensure that job seekers with the
relevant skills and competencies are available as soon as job openings occur. Both industry and society are
aware that not all people fit the same job profiles at the same time, therefore, it is important to conduct an
HR planning process.
5.2 Defining HR Planning
It is important for an organisation to anticipate in advance what kind of employees it would need in the
future. In doing this, the organisation should take into account its current size and how big it aims to grow in
the future, its nature, its niche in the market and how much profit it aims to achieve. This illustrates that HR
planning is not just about filling positions but about ensuring that the right mix of people is available as and
when needed.
The SA National HRM Standards defines HR planning (or workforce planning) as
“… the systematic identification and analysis of organisational workforce needs culminating in a workforce
plan to ensure sustainable organisational capability in pursuit of the achievement of its strategic and
operational objectives. The workforce plan will set out the actions necessary to have the right people in the
right place at the right time. “(SABPP 2013)
5.3 HR Planning Process
Step 1: Scanning the environment - Environmental scanning refers to identifying the extent to which
factors in the macroenvironment are likely to influence how organisations should perform HR planning.
Factors in the macroenvironment involve the following: political- governmental factors, economic factors,
social factors, physical factors and technological factors.
Step 2: Determining the HR demand - The concept of demand and supply was postulated by Adam Smith
around the 18th century in his book The wealth of nations. The concept HR demand simply refers to how
many employees with which skills and abilities an organisation would need at some time in the future.
This means that an organisation should always be aware of how many of a certain type of employee it would
need.
Step 3: Determining the HR supply - after determining the demand for human resources based on the
environmental scan, the organisation has to consider its skills inventory or stock to determine if its current
human resources would meet the forecasted demand. If not, the organisation has to consider what skills are
offered by the labour market.
The HR supply refers to the number of available people with the necessary skills and abilities required by
the organisation. If HR demand and HR supply are not at equilibrium, then an HR gap exists.
Step 4: Determining the HR gap – an HR gap exists when the demand for employees differs from the supply
of appropriate employees. When the demand for employees is more than the supply, then a labour
shortage exists, and appointments should be considered to close the HR gap. On the other hand, when the
supply of employees exceeds the demand, then an oversupply is experienced. When this situation prevails,
alternative sourcing actions such as retrenchments, transfers, recall of subcontracted work, restructuring
and lay-offs may be considered.
Page 1 of 14
HRM1501 Notes by L Petzer (2019 S2)
, HR Planning is a means to more effective resource management and helps organisations to:
- Develop an HR plan and enable them to be ahead of the game
- Plan for continuity of key expertise and positions
- Plan for individual career development so that managerial responsibility and technical leadership are
maintained.
- Plan for core competence training to be available as needed.
Activity:
Think of how many strikes our country experiences each year and the impact these strikes have on the
overall economy. Also consider the labour legislation our government has promulgated to regulate and
control the extent of these strikes. Give your opinion about the impact of these strikes on HR planning.
The Constitution of the Republic of South Africa 108 of 1996 provides for the right to freedom of association (section
18) and the right to labour relations (section 23). This means that every employee has the right to join a trade union
of their choice and all trade union representatives have the right to carry out trade union activities during working
hours and at the workplace. Section 12 of Chapter 3 of the Labour Relations Act 66 of 1995 (available at
http://www1.chr.up.ac.za/undp/domestic/docs/legislation_30.pdf ) also provides for the right to strike. Although
employees have the right to strike, trade unions should ensure that their members engage in protected strikes to
avoid situations of illegal striking. When employees go on strike, productivity stops which has a general impact on
the gross domestic product (GDP) as well as our gross national product (GNP). HR managers should always guard
against strikes by planning in advance for casual and temporary replacements should the strikes be drawn out.
5.4 The Impact of changes on HR Planning
As HR planners cannot predict what the future will hold for their organisation, they must be on guard and
prepare for the unknown. Muller-Camen, Croucher and Leigh (2008) identify a number of factors that must
be taken into consideration when planning for human resources.
The vision, strategy and goals of the organisation
When planning for human resources, organisations should consider their broader vision and mission, goals
and overall business strategy.
According to Wärnich, Carrel, Elbert and Hatfield (2015:119), strategic HR planning is a process by which
company goals as put forth in mission statements and company plans are translated into HR objectives to
ensure that the company is not overstaffed or understaffed, and that employees with the appropriate
talents, skills and desire are available when needed to carry out their tasks at the right time and in the right
jobs.
Demographic changes
How would the content and context of jobs change due to changes in the demographic profiles of the labour
force? What impact does the brain drain have on the organisation?
Financial situation of the organisation
Would the organisation have sufficient financial muscle to cater for all the unforeseen organisational needs
in terms of new appointments, office space, machinery and tools, and the overall restructuring processes?
Legal requirements
Labour laws often have an impact on organisational functioning with regard to working conditions,
remuneration, health and safety, and social services. Organisations need to anticipate and act resourcefully
when legislation is enforced.
Page 2 of 14
HRM1501 Notes by L Petzer (2019 S2)
TOPIC 2 - HRM Functions
WORKBOOK 05: Human Resource (HR) Planning
5.1 Introduction
The reason why organisations embark on an HR planning process is to ensure that job seekers with the
relevant skills and competencies are available as soon as job openings occur. Both industry and society are
aware that not all people fit the same job profiles at the same time, therefore, it is important to conduct an
HR planning process.
5.2 Defining HR Planning
It is important for an organisation to anticipate in advance what kind of employees it would need in the
future. In doing this, the organisation should take into account its current size and how big it aims to grow in
the future, its nature, its niche in the market and how much profit it aims to achieve. This illustrates that HR
planning is not just about filling positions but about ensuring that the right mix of people is available as and
when needed.
The SA National HRM Standards defines HR planning (or workforce planning) as
“… the systematic identification and analysis of organisational workforce needs culminating in a workforce
plan to ensure sustainable organisational capability in pursuit of the achievement of its strategic and
operational objectives. The workforce plan will set out the actions necessary to have the right people in the
right place at the right time. “(SABPP 2013)
5.3 HR Planning Process
Step 1: Scanning the environment - Environmental scanning refers to identifying the extent to which
factors in the macroenvironment are likely to influence how organisations should perform HR planning.
Factors in the macroenvironment involve the following: political- governmental factors, economic factors,
social factors, physical factors and technological factors.
Step 2: Determining the HR demand - The concept of demand and supply was postulated by Adam Smith
around the 18th century in his book The wealth of nations. The concept HR demand simply refers to how
many employees with which skills and abilities an organisation would need at some time in the future.
This means that an organisation should always be aware of how many of a certain type of employee it would
need.
Step 3: Determining the HR supply - after determining the demand for human resources based on the
environmental scan, the organisation has to consider its skills inventory or stock to determine if its current
human resources would meet the forecasted demand. If not, the organisation has to consider what skills are
offered by the labour market.
The HR supply refers to the number of available people with the necessary skills and abilities required by
the organisation. If HR demand and HR supply are not at equilibrium, then an HR gap exists.
Step 4: Determining the HR gap – an HR gap exists when the demand for employees differs from the supply
of appropriate employees. When the demand for employees is more than the supply, then a labour
shortage exists, and appointments should be considered to close the HR gap. On the other hand, when the
supply of employees exceeds the demand, then an oversupply is experienced. When this situation prevails,
alternative sourcing actions such as retrenchments, transfers, recall of subcontracted work, restructuring
and lay-offs may be considered.
Page 1 of 14
HRM1501 Notes by L Petzer (2019 S2)
, HR Planning is a means to more effective resource management and helps organisations to:
- Develop an HR plan and enable them to be ahead of the game
- Plan for continuity of key expertise and positions
- Plan for individual career development so that managerial responsibility and technical leadership are
maintained.
- Plan for core competence training to be available as needed.
Activity:
Think of how many strikes our country experiences each year and the impact these strikes have on the
overall economy. Also consider the labour legislation our government has promulgated to regulate and
control the extent of these strikes. Give your opinion about the impact of these strikes on HR planning.
The Constitution of the Republic of South Africa 108 of 1996 provides for the right to freedom of association (section
18) and the right to labour relations (section 23). This means that every employee has the right to join a trade union
of their choice and all trade union representatives have the right to carry out trade union activities during working
hours and at the workplace. Section 12 of Chapter 3 of the Labour Relations Act 66 of 1995 (available at
http://www1.chr.up.ac.za/undp/domestic/docs/legislation_30.pdf ) also provides for the right to strike. Although
employees have the right to strike, trade unions should ensure that their members engage in protected strikes to
avoid situations of illegal striking. When employees go on strike, productivity stops which has a general impact on
the gross domestic product (GDP) as well as our gross national product (GNP). HR managers should always guard
against strikes by planning in advance for casual and temporary replacements should the strikes be drawn out.
5.4 The Impact of changes on HR Planning
As HR planners cannot predict what the future will hold for their organisation, they must be on guard and
prepare for the unknown. Muller-Camen, Croucher and Leigh (2008) identify a number of factors that must
be taken into consideration when planning for human resources.
The vision, strategy and goals of the organisation
When planning for human resources, organisations should consider their broader vision and mission, goals
and overall business strategy.
According to Wärnich, Carrel, Elbert and Hatfield (2015:119), strategic HR planning is a process by which
company goals as put forth in mission statements and company plans are translated into HR objectives to
ensure that the company is not overstaffed or understaffed, and that employees with the appropriate
talents, skills and desire are available when needed to carry out their tasks at the right time and in the right
jobs.
Demographic changes
How would the content and context of jobs change due to changes in the demographic profiles of the labour
force? What impact does the brain drain have on the organisation?
Financial situation of the organisation
Would the organisation have sufficient financial muscle to cater for all the unforeseen organisational needs
in terms of new appointments, office space, machinery and tools, and the overall restructuring processes?
Legal requirements
Labour laws often have an impact on organisational functioning with regard to working conditions,
remuneration, health and safety, and social services. Organisations need to anticipate and act resourcefully
when legislation is enforced.
Page 2 of 14
HRM1501 Notes by L Petzer (2019 S2)
