Understanding the real imbalance when conducting human resource planning.

• Author: Soberg, Andrea
• Position: Report

1. INTRODUCTION

   The human resource planning process involves "analyzing an organization's human resource needs under changing conditions and developing activities necessary to satisfy these needs" (Walker, 1980). In order to analyze an organization's needs and develop good strategies a seven-step approach can be applied.

1. Identify the objectives of human resource planning.

2. Gather data on the current HR management practices and activities.

3. Determine the supply of labour.

4. Determine the demand for labour.

5. Identify the imbalance.

6. Develop and implement HR action plans.

7. Monitor the results.

   One of the critical steps in the process of human resource planning is Step 5--identifying the imbalance. The imbalance takes into account all the factors that are used to determine the actual needs of an organization. Some organizations assume that the demand for labour identifies the future requirements for labour, but all this does is identify one part of the equation. All factors that identify both the demand for and supply of labour must be considered before Step 5 is attempted. Theamount and type of people identified at this stage is what is used in the Action Planning stage. If the right numbers and types of labour are not clearly identified then actions that are identified and implemented in Step 6may not effectively address the overall challenges the organization is experiencing as it attempts to achieve its mission.

   The goal is to have the right number and type of people in the right job at the right time. To calculate the imbalance the HR planner (this can be a manager within the organization or a HR professional) indicates for both the supply and the demand the following:

   * the job positions that the organization has now and plans to have in the future

   * the qualities, knowledge, skills and abilities needed to meet the requirements of the jobs listed

   * the geographic location where the employee(s) will work

   * the timing of when a vacancy will need to be filled and the readiness of the supply

   The imbalance is then determined bysubtracting the demand for labour from the supply of labour. The imbalance is the gap between what an organization needs in the way of people to be successful and what it currently has or will have in the future.

   1.1 The Types of Imbalances

   Due to the fact that the supply of and demand for labour are determined by assessing both factors within the internal and external marketplace, the result can be one, or all, of four different imbalances. These types of imbalances (Soberg, 1996) are:

1. Quantitative

2. Qualitative

3. Structural

4. Environmental

   An HR planner must determine all types of imbalances before any action plans are identified. This paper discusses the different types of imbalances, how to effectively calculate them, and the risks associated with not addressing them.

2. QUANTITATIVE IMBALANCE

   A quantitative imbalance is the gap between the number of people an organization needs to achieve its goals and the amount that it has. There are three types of quantitative imbalances. When the demand for labour is subtracted from the supply of the labour the result is a number that is either positive, negative, or zero. A positive number indicates a surplus gap which means that the number of positions in an organization is less than the number of qualified people available. A negative number indicates a shortage gap which means that the number of positions in the organization is greater than the number of qualified people available. A zero indicates a balance gap which means that the number of positions in the organization is the same as the number of available, qualified people.

   Determining the quantitative imbalance is the simplest way of calculating an imbalance. The HR planner uses the actual numbers that were identified in the determination of supply and demand in Steps 3 and 4 of the HR Planning Process. These numbers represent the amount of people with particular knowledge, skills and abilities (KSAs) that an organization needs to achieve its mission in the present and in the future. When the HR planner discusses the quantitative imbalance with the management team, the managers sometimes don't feel that the quantitative gap is something with which they need to be concerned. They may feel that the organization could still achieve its mission, for a period of time, with a surplus or shortage of labour. If this is the case, there must be an understanding of the risks associated with such a decision.

   2.1.Risks associated with maintaining a quantitative imbalance

   When major labour shortages are predicted in the marketplace, some managers may feel that it is a smart idea to keep some excess supply of labour in their organization in order to be prepared for a possible future need. This may be a strategically wise decision...