Computer Model for HR Planning and Budgeting
Computer models simulating the effect of variables in the planning mix are very useful in projecting the numbers of people by department, function and job level. This is described as Macro Planning in chapter 14 of The Visible Hand.
The approach or indeed any kind of effective HR planning requires the existence of at least some job evaluation system in the organisation.
The resultant picture is illustrated in Figure below.
Reading across the row showing grade 2 movements, the depicted plan starts from an existing establishment of 70 people. Applying the expected corporate growth rate of 10% at that level yields a forecast number of 77. Allowing for the 2 promotions into grade 2, 2 promotions out of grade 2, a labour turnover of 12 people (rate 17.1%) requires the recruitment of 18 people.
The result can be useful in delegating the task of planning and budgeting to relevant departmental heads. It provides a basis for the department’s training, recruitment and salary budgets.
Indeed one might state that no business planning, in an organisation which relies on human resources to any degree, can omit something akin to this macro HR planning model as part of its total corporate plan or its departmental budgeting.