HRM re sourcing strategy is a process to obtain
the right basis material in the form of a workforce
endowed with the appropriate qualities, skills,
knowledge & potential for future training.
The selection & recruitment of workers best suited
to meet the needs of the organization ought to
form a core activity upon which most HRM policies
geared towards development & motivation could
The concept that the strategic capability of a
firm depends on its resource capability in the
shape of people provides the rationale for re
The aim of this strategy is to ensure that a firm
achieves competitive advantage by employing
more capable people than its rivals.
These people will have a wider & deeper range of
skills, & behave in ways that maximize their
The organization attracts such people by being the
employer of choice.
It retains them by providing better opportunities &
rewards than others & by developing a positive
psychological contract which increases commitment &
creates mutual trust.
5. Components of Re sourcing
1] Re sourcing plans
2] Flexibility plans,
3] Retention plans.
Re sourcing strategy provides the basis for
plans within the framework of business needs.
6. Scenario Planning:
It is a formal strategic planning technique.
It is also considered as an informal approach to
thinking about the future in broad terms, based
upon an analysis of likely changes in internal &
A scenario can be defined as an imagined sequence
of future events.
Scenario planning is a simple, more or less
formalized process for establishing a view about any
changes that can be foreseen to the scale & type of
activities in the organization & to the structure, & for
identifying any external environment changes that are
likely to affect it.
The creation of a scenario involves making broad
assessments of likely internal developments in the
direction in which the organization is going & the
implications this has on people requirements.
The assessments may have to be made in the
absence of any articulated business plan, & thus see
the future, & asking them to interpret what this means
in terms of their HR needs.
Assessments also have to be made
on likely changes in the external
environment as it may affect the labor
10. Estimating future HR
Scenario planning is in some situations as
far as it is possible to go in estimating future
people requirements, but where it is feasible
& appropriate, attempts can be made to
produce demand & supply forecasts, & to
determine what action needs to be taken if
the forecasts indicate the possibility of a HR
deficit or surplus.
Demand Forecasting: is the process of estimating
the future numbers of people required & the likely skills
& competences they will need.
The ideal basis of the forecast is an annual budget &
longer term business plan, translated into activity
levels for each function & department, or decisions on
In a manufacturing company the sales budget would
be translated into a manufacturing plan giving the
numbers & types of products to be made in each
From this information the number of hours to be
worked by each skill category to make the quota for
each period would be computed.
The demand forecasting techniques that
can be used to produce quantitative
estimates of future requirements are:
Managerial/ expert judgment: is the most
typical method of forecasting & may be
linked to some form of scenario planning. It
simply requires managers/specialists to sit
down, think about future workloads, &
decide how many people are needed. This
is reliable only if reliable evidence is
available of forecast increases in activity
levels /new demands for skills.
Ratio trend analysis: Here the past ratio
between the number of direct workers &
indirect workers in a manufacturing plant, &
forecasting future ratios, having made some
allowance for changes in organization/
methods are studied.
Activity level forecasts are then used to
determine direct labor requirements & the
forecasts ratio of indirect to direct is used to
calculate the number of indirect workers
Work study techniques: can be
used when it is possible to apply work
measurement to calculate how long
operations should take & the number
of people required.
Work study techniques for direct
workers can be combined with ratio
trend analysis to calculate the number
of indirect workers needed.
Forecasting skill & competence
requirements: Forecasting skill
requirements is largely a matter of
This judgment is exercised on the basis of a
careful analysis of the impact of projected
product market development & the
introduction of new technology or
Supply forecasting: it measures the
number of people likely to be available
from within & outside the organization
having allowed for attrition[ labor
wastages & retirements],
absenteeism, internal movements &
promotions, & changes in hours &
other conditions of work.
The forecasting can be based on:
an analysis of existing HR in terms of
numbers in each occupation, skills &
forecast losses to existing resource thru’
forecasts changing to existing resources
thru’ internal promotions.
sources of supply from within the
organization & from outside in the national
& local labor markets.
Mathematical modeling techniques
aided by computers can help in the
preparation of supply forecasts in
situations where comprehensive &
reliable data on stocks can be
provided. These methods are seldom
19. Analyzing demand & supply
The demand & supply forecasts can then
be analyzed to determine whether there are
any deicits/ surpluses.
This provides the basis for recruitment,
retention & downsizing plans when needed.
Computerized planning models can be
used for this purpose.
The basic forecasting calculations can be
carried out on a spreadsheet that sets out &
calculates the number required for each
occupation where plans need to be made.
No. currently employed 70
Annual wastage rate based
on past records 10 %
Expected losses during the year 7
Balance @the end of the year 63
Number required@ the end of
the year 75
Number to be obtained during
the years [5-4] 12
21. Action Planning
Action plans are derived from broad re
sourcing strategies & more detailed analysis
of demand & supply factors.
These are short termed & flexible because
of the difficulty of making firm predictions
about HR requirements in times of rapid
Plans need to be prepared in the areas of
re sourcing, flexibility & downsizing.
The re sourcing plan: this needs to
consider approaches to obtain people from
within the organization, to recruiting them
externally, & to attract high quality
candidates [ employer of choice].
Internal re sourcing: the first step is to
analyze the availability of suitable people
from within the organization by reference to
assessments of potential & skills database .
The latter should contain a regularly
updated list of employees with the sort of
skills needed by organization.
Decisions are then made on what
steps should be taken to promote,
redeploy, & as necessary, provide
additional experience & training to
Plans can also be made to make
better use of existing employees,
which may include flexibility
The recruitment plan: this incorporates
the numbers & types of employees required
to make up any deficits, when they are
The likely sources of candidates- schools,
colleges of further education, universities,
advertising, the internet…
Plans for tapping alternative sources such
as part-timers or widening the recruitment
net to include-more women re-entering the
Flexibility plan: should provide for
greater operational flexibility, improve
the utilization of employees ‘skills &
capacities, reduce employment costs
& help to achieve downsizing
smoothly & in a way which avoids the
need for compulsory redundacies.
Increase Productivity: the plan can be based on a
radical look at traditional employment patterns.
This means identifying the scope for using
alternatives to full-time permanent staff, which could
include increasing the number of part-timers, job-
sharing the expansion of home-working/ tele-working
or employing more temps.
Consideration can also be given to make more use of
sub-contractors /outsourcing work, & to the
introduction of more flexible working arrangements.
Use of part-time workers: The
advantages of using part-time workers:
more scope for flexible hours worked, better
utilization of plant & equipment by the
introduction of a twilight shift, lower unit
labor costs because overtime levels for full-
time workers are reduced, higher
productivity on repetitive work because part-
time workers can give more attention to
their work during their shorter working day.
Disadvantages: part-timers are
generally less willing to undertake
afternoon/ evening work, may find it
more difficult to vary their hours of
work, & may be less mobile, rates of
labor turnover may be higher,
commitment is less.
Job sharing: is an arrangement whereby two
employees share the work of one full-time position,
dividing pay & benefits between them according to the
work done by each.
Job sharing can involve splitting days/weeks or they
may work alternate weeks.
The advantage is , it reduces employee turnover &
absenteeism because it suits the needs of the
individuals. There is greater continuity in work
schedule. Also, it generates more employment.
The disadvantages are the administrative costs
involved are high & the risk of the responsibility is
Home- working/ tele-working:
Home based employees can be
employed in jobs like consultants,
analysts, designers, programmers or
various administrative work.
Advantages :flexibility to respond to
fluctuations in demands, reduced
overheads, lower employment costs if
the home-workers are self- employed.
Tele-working involves people working at
home with a terminal which is linked to the
main company or networked with other
Its aim is to achieve greater flexibility, rapid
access to skills & the retention of skilled
employees who would otherwise be lost to
Tele-workers can be used in a number of
functions such as marketing, finance & IT.
Sub-contracting: it enables resources to
be concentrated on core business activities,
employment costs are reduced, flexibility &
productivity can be increased, job security
for core employees can be enhanced.
The disadvantages are the legal status of
the employees, negative reactions from
employees & unions who prefer work to be
kept within the company.
The down–sizing plan: If there is decline
in business, if nothing works, then it may be
necessary to deal with unacceptable
employment costs or surplus numbers of
employees,. This is downsizing.
This plan should be based on the timing of
reductions & forecasts of the extent to
which these can be achieved by natural
wastage or voluntary redundancy.
the total no. of people who have to go, &
when & where this needs to take place,
arrangements for informing & consulting
with employees & their trade unions, a
forecast of the number of losses that can be
taken up by natural wastage,any financial or
other inducements to encourage voluntary
redundancy, a forecast of the likely
numbers who will want to leave, a forecast
of the balance of employees, who will have
to be made redundant.
The redundancy terms: any
arrangements for retraining
employees & finding them work
elsewhere in the organization.
This can be done by counseling,
contacting other employers or offering
the services of outplacement
36. The contribution of HR to
develop the Resource
HRP, in the broader meaning of the term, is
one of the fundamental strategic roles of the
HR can make a major contribution to
developing the resource capability of the
firm & therefore its strategic capability by
systematically reviewing the firm’s strategic
objectives & by ensuring that plans are
made that will ensure that the HR are
available to meet those objectives.