HUMAN RESOURCES PLANNING

Human Resources Planning



Human Resources Planning

Introduction

Human resource (HR) planning is a combination of forecasting staffing needs and strategic planning. It involves planning, developing, implementing, administering, and performing ongoing evaluation and assessment of recruiting, hiring, orientation, and organizational exit to ensure that the workforce will meet the organization's goals and objectives. The typical role of an HR professional performing the staffing function is selecting appropriate employees to meet the needs of the organization, training them for future needs, developing their careers, and retaining them as staff so the organization will not spend time and money replacing them. In essence, HR planning results in strategies for staffing to ensure that both short- and long-term organizational objectives are met.

Strategic HR management refers to an organization's use of employees to obtain a competitive advantage over competitors in the marketplace. Through formally contributing to companywide strategic planning efforts or by being knowledgeable about concerns facing the organization, an HR professional can be strategic about HR planning. When an HR professional hires a productive employee, that action in itself is contributing to the organization's bottom line. High productivity leads to higher competitive advantage and profitability. Other HR activities that add value to an organization's competitive advantage are compensation, benefits, performance management systems, and job design. Yet many in HR perform these tasks without ever tying them to the organization's competitive advantage.

Strategic Implications

Firms employ both tangible and intangible resources in the execution of strategies. However, only intangible resources such as human capital can provide a firm with a sustained competitive advantage.Human capital has long been considered as a critical resource in most firms and represents the knowledge, skills and capabilities of individuals.The role of human capital in a firm's competitive advantage can be examined with a VRIO (value, rareness, imitability and organization) framework.Based on this framework, the resource payoff matrix shown in Table 1 explains the resource attributes of a firm along with its strategic implications. Human capital is more likely than tangible resources to produce a competitive advantage for firmsbecause it is often rare and socially complex, thereby making it difficult to imitate.Human capital is the most important resource on which firms build resource-based advantages because of the inimitable nature of the tacit knowledge and skills that employees possess.Investment in human capital significantly increases the value of the firm over the long term.Firms with greater investment in and utilization of human capital experience a higher level of performance.The selection, development and retention of human capital are vital for building and sustaining a firm's inventory of knowledge.Knowledge is the most critical competitive asset that a firm possesses, and much of an organization's knowledge resides in its human capital.Hiring new talent through the labor market enables a firm to acquire the tacit knowledge embodied in it. Knowledge, especially tacit knowledge, is an important intangible resource that is often valuable, rare and difficult to imitate because knowledge accumulation is socially complex and thus can serve as a source of a firm's competitive advantage (Agrawal, ...