This company has approximately 2,000 employees. The workforce is grouped into three divisions. Workers that belong to the second and third divisions perform the same task. It must be pointed out that the second and third divisions hired employees that were all necessary to perform their duties and responsibilities. However, the company started hiring additional personnel in anticipation of growth. Unfortunately, the second division experienced stagnant growth, and therefore the additional workers that were hired are no longer needed. On the other hand, there is understaffing in the third division. Furthermore, not everyone in the second division can perform necessary duties, while all workers in the third division can be considered as above average. An overview of the problem will reveal that this is not simply a matter of over-hiring, but the root cause is the lack of human resource planning.
An effective and cost-efficient human resource planning begins with a correct understanding of HRM activities. It must be made clear that HRM “consists of all the activities involved in acquiring, maintaining, and developing an organization’s human resources”. Once the purpose of HRM has been clarified, it is time to proceed with human resource planning. There are three basic phases in HR planning. The first phase is concerned with the identification of the number and kind of employees this company will need in the future. Thus, the company cannot fire present workers even if there is a perceived over-hiring. The company’s HR managers must determine first if there is no anticipated growth in the near future that will require a particular set of workers to be added to the workforce.
The second phase in HR planning is to determine the availability of qualified workers in the employment market in the event that there will be a need for additional workers in the future. Thus, the company cannot afford to fire current workers if there is no way to hire qualified replacements when the need arises. At the same time, it is necessary to add that the company must take extra care to fire personnel that belong to the third division. It can be argued that workers in the said division can be considered as good performers. According to human resource consultants, “The costs of losing a good performer are greater than the costs of losing an average performer”. Thus, the HR manager must not make hasty decisions until all pertinent information is collected.
The third and final phase in the HR planning process is the development of “specific course of action to assure the institution that it will have the appropriate number and kind of people in the right places at the right times” in order to complete the tasks required by the company. When all the phases of the planning process have been completed, then it is time to make important decisions necessary to streamline the operations of the organization.
In the context of this company’s problems, the first thing that has to be done in accordance with the three phases of the HR planning process is to determine the future growth of the company in relation to the second and third divisions. If top management is able to present data that will point to future growth, then the HR manager must determine the number and type of workers that will be needed for that future event.
The next step is to find out the availability of workers that can be readily hired by the company. The HR manager will look into job applications sent by applicants, as well as data coming from other reliable sources that will enable him to find out if the company can easily hire these workers at a moment’s notice. However, if competition from other companies and unavailability of skilled workers pose as problems, then the company is not advised to fire the additional workers currently absorbed by the second division.
The first scenario is an optimistic one and it anticipates future growth. However, the second scenario is not ideal for the company. It simply means that the second division will continue to experience stagnant growth. Thus, over-hiring can be a pronounced problem. Thus, there is a need to fire workers that are no longer needed by the company. Nevertheless, the problem is made more complicated by another factor: The third division is experiencing growth, and therefore there is a need for more workers to be added to this group.
The HR manager must quickly realize that although the third division needs more personnel, the solution cannot simply rely on moving workers from the second division. Although the second and third divisions perform the same tasks, it has been reported that not all workers in the second division are as skilled as those assigned to the third division. A possible solution to this predicament is to fire workers that do not possess skills required for the job and hire people who are already skilled in this particular type of job. However, if there are no available workers that can be hired from external sources, then it is better to train workers in the second division and add them to the third division.
It has been discovered that the root cause of the problem is the lack of human resource planning. The company had no way of determining future growth, and therefore it was impossible to predict future needs when it came to the number and type of workers that would fit a particular job requirement. Nonetheless, once the company has established a way to determine future growth or lack of growth for every division in the workforce, then the company can begin to develop strategies to acquire, train, and retain workers needed in the future. Aside from the ability to predict or estimate future growth, the company must also have a system that can help the HR manager determine the availability of qualified workers in the labor market. Once the HR manager has the tools needed, he can begin to make decisions on whether to fire the workers from the second division or not. If hiring is a problem, then the HR manager should train current workers under the second division so that they can be on a par with workers in the third division.