Abstract
This research is on human resource forecasting and viability of small business enterprises in
Rivers State Nigeria. Specifically, the study aimed to pursue the following objectives: compare performance of small businesses in Rivers state before and after professional future recruitment drives, ascertain the effect of succession planning on business failure in small business enterprises, determine the difference in the mean growth rate of small business enterprises in Rivers state prior to and after systematic human resource needs forecasting, and compare performance of small businesses who pay for professional human resource forecasting with those who do not in Rivers State, Nigeria. In this work, the survey research method was adopted, making use of interview guide and a questionnaire as instruments for data collection. The sources of data were mainly from primary sources. The study had a population of 3,248 small business enterprises in Rivers state and a sample size of 375 which was obtained using Cochran (1963) sample size determination formula. Data were presented in tables while the hypotheses were tested using Pearson Product Moment Correlation Coefficient and t-test. The findings indicated that there was significant positive difference in performance of small business enterprises in Rivers State before and after professional future recruitment drives (p = 0.000 <
0.05); succession planning had a significant positive effect on business failure (r = .87, P<.05); there was significant positive difference in mean growth rate of small business enterprises in Rivers state after the adoption of systematic human resource needs forecasting (p = 0.000 <
0.05); there was significant positive difference in performance of small businesses who pay for
professional human resource forecasting with those do not in Rivers state, Nigeria (p = 0.000 <
0.05). The study therefore concludes that human resource forecasting had a significant positive
effect on viability of small businesses in Rivers state Nigeria. In the light of the forgoing therefore, it was recommended that professional future recruitment drives should be encouraged as it has been found to improve performance of small businesses in Rivers state; succession planning as a means of human resource forecasting should be taken seriously as no one lives forever; human resource forecasting should be conducted in a systematic manner so as to reduce environmental influences which may encumber its success; and cheaper but quality professional human resource forecasting be utilized as the end may actually justify the means.
CHAPTER ONE INTRODUCTION
1.1 Background of the Study
The survival of business organizationshinges on the availabilityof capital to keep the business running. However, central to the growth, viability and continued survival of any organization be it private or public, academic or social, manufacturing or non- manufacturing; is the utilization of capital by the human element of the organization. The quality of human resources ensures effective combination of other resources – time, money (no matter how vast the financial resources), materials, technology (no matter how sophisticated the machines, tools and equipments),etc in the most appropriate manner in order to achievestated organizational objectives.Human resources or human capital is so critical to organizational survival such that it has, judging by today’s complex business environment, been acclaimed as the most important resource available to any organization going by the assertion of Nnadozie and Nwana (1993) that employees are the most valuable resources of any organization. This view is also echoed by Ewurum and Unamka (1995) who argue that the most important asset of an organization is its human resources, otherwise referred to as manpower.
The success or failure of the organization hinges on the calibre of its work force and the quality of the effort put in the service of the organization. The policies and programme an organization devises for its manpower resources are of crucial importance because people differ widely in the range and type of their abilities, in their character, attitudes, general behaviour, in their interests and motivation. To achieve maximum efficiency, therefore, individuals and jobs must be managed and matched. In an ideal business organization, human resources and management enjoy a symbiotic relationship which ensures none can survive or grow without the other. It is the human element in the organization that performs its management functions while management is also burdened with the responsibility of combining and coordinating the human, financial, material and other resources to achieve the goals of the organization. Griffin (1997) defines management as a set of activities (including planning and decision-making, organizing, leading and controlling) directed at an organization’s resources (human, financial, material and information) with the aim of achieving organizational goals in an effective and efficient manner. Therefore, human
resources are very important and occupy a cardinal position in management. This implies that one is safe to say that human resource management is the pivot of all sorts of management in an organization.
An important development in human resources management is manpower planning. As a crucial matter, manpower planning has spread rapidly to every organization in almost every kind of business. There is no organization that can function very well even if it is well to do technologically, financially and otherwise without a well- designed manpower planning process (Obi, 2003). To get a better understanding of what manpower planning is and how it has emerged, the evolution and development of manpower planning will be described. Since the origins of the modern industrial organization, human resource planning has been a management function (Walker,
1980). Division of labour, specialization, organization of management into levels, work simplification, and application of standards for selection employees and measuring their performance were all principles applied early in industrial management.
Planning for the staffing of work to be done has grown to become what it is today. The relatively sophisticated techniques available to management today are outcomes of a long period of evolution in practice, which started decades ago with simple, pragmatic, short term planning. The techniques used by management tended to fit
contemporary conditions and events (Storey, 1995). During the first part of the 20th
century, for example, the focus in manpower planning was upon the hourly production worker. The aim of improving efficiency through work engineering and early industrial psychology applications was consistent with the need to improve productivity and introduce greater objectivity to personnel practices (Ling,
1965;Merril, 1959; Yoder; 1952).
During the Second World War and the post war years, the focus intensified on employee productivity. There was also greater concern regarding the availability of competent managerial personnel, as there was a talent shortage in combination with significant demand for goods and services. New technologies and interests in behavioural aspects of work also added complexities to the manpower planning task.
In the 1960’s the demand for high talent personnel increased due to high technology programmes, rapid corporate expansion and diversification. In order to handle this increase, manpower planning practices were focused on balancing supply with demand, particularly demand for managerial, professional and technical personnel.
Human resource planning was viewed as a system linking the organization with its environment (Patten, 1969; Vetter, 1967). Walker (1980) argues that the most common view of manpower planning at the time, which also dominated the literature until the 80s, was that “companies forecast their needs for manpower into the future, forecast their internal labour supply for meeting these needs, and identify the gaps between what will be needed and what will be available.” Further, manpower planners develop plans for recruiting, selecting and placing new employees, provide for training and development and anticipate necessary promotions and transfers (Burack,
1972: Geisler, 1967; Henemann, 1968; Wikstrom, 1971).
The 70s came with new legislation, court decisions and governmental regulations. Management attention then turned to affirmative action planning and other aspect of compliance. While many companies adopted the techniques that had been introduced by leading companies during the previous decades, others experimented with new tools such as career planning, activity analysis, and reshaping of work (Walker, 1980). The majority of companies, however, were mainly concerned about the compliance with the significant new regulations governing discrimination, safety and pensions. Generally, it was an unsettled decade, during which managers had to deal with the energy crisis, uncertain costs and profits, the slowing of business expansion and the increased concern regarding women’s liberation and reverse discrimination (Bramham, 1994).
However, according to Bramham, it was during this time or decade that “manpower planning’’ was broadly being termed “human resources” planning and became widely established as astaff activity in major business and governmental organizations. The term “human resources planning” implied a scope broader than just supply-demand balancing or quantitative forecasting. Human resource planning shifted focus from being a quantitative approach, although recognizing its importance, to a more comprehensive view of the process encompassing both needs forecasting and program
forecasting. During the 80s and early 90s, human resource management researchers and professionals tended to place greater emphasis on employee attitudes and on the development of personnel strategies to search for the enhancement of positive employee feeling and commitment (Zeffane and Mayo, 1994).
Generally, these strategies lacked sufficient concentration on the need to control the flow of personnel within and across organizational boundaries (Walker, 1989). Richards-Carpenter (1989) argue that this meant that human resource planning took a backward step in priority placing within the overall human resource management system. However, due to the increasingly uncertain socio-economicclimate during the
90s, it was anticipated that the HRP function was to become the focal activity, as it was increasingly becoming an essential function across the organization (Zeffane and Mayo, 1994). As such, the function underlined the importance and crucial role of dealing with the necessary changes in volume and make-up of the workforce.
Zeffane and Mayo (1994) further state that manpower planning during the early 90s fundamentally consisted of a range of tasks designed to ensure that the appropriate number of the right people are in the right place in the right time. Manpower planning was seen as a way to plan for the future demand for people, which was carried out by certain dynamic process, designed to manage the flow of people into, through and out of the organization.Damm and Tengbland (2000) argue that in the future, the role of the HR personnel is to provide and develop an attractive organizational environment in which the individual feels inspired to grow and develop his/her competence. This goes without saying thatmanpower planning as an activity in the human resource department is responsible for quite a number of tasks that starts with determining labour need, quality and number; maintain and improve organisation’s ability to achieve corporate objectives by developing strategies which are designed to increase the present and future conditions of manpower. Thus, it is the process by which management attempts to provide for its human resources to accomplish its needs.
Sincewe live in a constantly evolving environment, determining the manpower needs of the organization is seen as a prerequisite to manpower management and planning. Banjoko (1996) shares this view with his assertion that that once an organization has realistically and reliably determined its present and future manpower needs through
its human resources planning process, the next logical step is to embark on the appropriate human resource management strategy necessary to improve and sustain organizational efficiency. One such strategy is forecasting, which is an essential ingredient in manpower planning going by Ibojo’s (2012) assertion that manpower planning serves as a tool for identifying an organization’scurrent and future human resources requirements, developing and implementing plans tomeet these requirements and monitoring their overall effectiveness.
Walter (1980) opine that forecasting manpower requirements or needs for use in general labour market analysis, vocational and technical education design, career education, etc. has received increased attention with the formation of regional councils of government. Identifying a relationship between forecasting manpower needs and growth, he stressed that providing for future employment needs within a planning framework leads to an avoidance of recurrent shortages which impede growth. Forecasting is intrinsically intertwined with decision-making (Manganelli,
2006). Several decision-making processes need accurate forecasts in order to choose proper actions relevant to manpower planning, production planning, sales budgeting, new product launches, promotion planning, etc. (Kalchschmidt, 2010). For thisreason, over the years, practitioners and academics have devoted particular attention to howforecasting can be improved to increase forecast accuracy (Wright, 1986; Armstrong,2001; Caniato et al., 2002a, 2002b).This is evident in Ogbuefi’s (2002) assertion that forecasting is becoming a subject matter of study on its own.
While the adoption of this technique has been studied by several authors (Mentzer and
Cox, 1984; Dalrymple, 1987, Sanders and Manrodt, 1994; Sanders and Ritzman,
2001); it is pertinent to note that forecasting has a long history. According to Hawkins (2005), the ancient Egyptiansforetold harvests from the level reachedby the Nile in the flood season. The Oracles of Delphi and Nostradamus are earlyexamples of often ambiguous forecasters. In the 17th century, Sir William Pettydiscerned a seven-year business cycle, suggesting a basis for systematic economicforecasts. In the USA a forecasting industry developed around 1910-1930 but much ofit was wiped out by the Great Depression — which it failed to foresee (Hawkins, 2005)!Official forecasts were produced regularly soon after World War II in theScandinavian countries, and
the practice spread to the UK in the early 1950s and mostother advanced economies by the 1960s.
Literature regarding the impact of forecasting on organizational performance has devotedsignificant attention to forecast accuracy and its role (Kalchschmidt, 2010). Inaccuracies in forecasting can mean excess inventories or loss and can lead to severe cost impact on manufacturing systems (Biggs and Campion,1982; Lee and Adam,
1986; Vollmann et al., 1992; Ritzman and King, 1993; Ho and Ireland,1998). Therefore it is no surprise that several surveys show accuracy as the most importantcriterion in selecting a forecasting approach (Dalrymple, 1987; Mahmoud,
1988).Forecast inaccuracy causes major rescheduling and cost difficulties for manufacturing (Ebertand Lee, 1995) and may impact on logistic performance, such as delivery timeliness andquality (Kalchschmidt and Zotteri, 2007). For this reason some authors have evenrecommended getting rid of forecasts altogether (Goddard,
1989).Even though the discussion is still open, what seems to beimportant is using the right approach for the right problem (Kalchschmidt, 2010).
Armstrong (1987),Mentzer and Bienstock(1998) and Moon (2003) agree with the view that a relevant research stream on forecasting claims that forecasting techniques are notsufficient to improve forecast accuracy, if they are not accompanied by proper specificprocedures and structured approaches for managing the forecasting process. Combining information and data from different functions withinthe company, and from suppliers and customers provides more knowledge regarding whatfuture demand will be and how the future trend could change, and therefore this may berelated to better accuracy (Kekre, 1990; Fisher, 1994; Bartezzaghi and Verganti,1995; Chen,
2000). Forecasting process has changed its role over time (Kalchschmidt, 2010); if at first attention wasmainly given to the quality of the forecast in terms of accuracy, now several companiesconsider forecasting an important process, useful not only for defining sales plans, but also forbetter managing product life cycles, promotions, or relationships with customers and manpower planning.
Forecasting manpower needs or human resources planning is usually seen as an essential feature of the ideal-type model of human resources management, even if it is not always given high priority in practice (Rothwell, 1995). The future manpower
requirement of an increasingly interdependent and technological economy depends on a great number of factors such as: the rate of growth of the economy; the composition of that growth industrially and geographically; the rate of technological changes, itsnature and location; population growth and its location; and social and demographic trends, generally.Forecasts of manpower needs are of interest to both public and private users. Employers planning production and organization expansion are concerned with the future manpower demand and supply situation they will have to face. Individuals concerned with vocational guidance, regional and local development, maximum growth and minimum unemployment in the economy, and last but not least educational planning;are vitally interested in such forecasts which can mean the difference between success and failure of the activities.
The essence of forecasting manpower needs is to establish what the employment expansion path will be in small and medium enterprises in Rivers State, and on the basis of that knowledge, undertake policies to move the economy’s skill endowment point nearer to that path in order to minimize unemployment and inflation; and maximize growth. At the same time, organizations are putting more and more emphasis on aligning the organization and people in their attempt to achieve business goals. The plight of Nigerian small business enterprises can be likened to that of the University of Vietnam where the number of students has risen so fast since reform and opening-up; whereas, the faculties are not enough to be sufficient to that raising (Huang, 2001). In fact, the Bachelors are outnumbered in many Vietnamese universities (Ibid). Thus, they face the problem of how to prepare and to reach the high qualified teaching/learning and faculty to adapt with the rising numbers of students in recent years and next years on. Theoretical research and practical experience in the field of long term manpower forecasting are still so recent that a number of obvious contributions may still be warranted.
1.2 Statement of the Problem
There has been little research evidence of increased use of human resource forecasting or of its success especially with regards to small businesses in the developing nations. Small business enterprises are under increasing pressure to find ways to implement their strategies in a rapidly changing business environment, in which planning lifecycles tend to shrink to reduce the ‘time-to-market’ intervals.Still literature is
silent on the challenges confronting human resource forecasting of small businesses which may be categorized into questions such as: where will we be in the next 5 to 10 years? Which factors may affect our operations in the next 10 years? What will be the rate of human resource demand and supply in the next 7 years? What will labour costs be like in the next 7 years? How do we predict our future workforce needs? How do we prepare now?
In light of this, a number of small business enterprises in Nigeria are folding up or diving into forays. Yet another question to consider is how long will these small businesses remain small? Under normal circumstance, it is expected that small business enterprises in Nigeria should be experiencing expansion and growth each year, after which they will metamorphose into medium and subsequently large businesses. The business environment of an organization also impacts on their human resource planning process. A statistical forecasting model could be appropriate when operating in a stable environment, which allows one to quantify the projected variables in a forecasting model. This statistical forecasting model would, however, be unsuitable when an organization operates its business in an unstable environment like the Niger Delta region of Nigeria. It would be difficult to specify the variable and their expected values accurately.
Forecasting human resource needs has emerged as critical aspect of organizational survival policy and human capital planning. Despite this assertion, little is known about the extent to which forecasting manpower needs is applied in Nigerian small business enterprises and challenges encountered. So it has become compelling to investigate the extent to which small business enterprises in Nigeria plan for their human resource needs in today’s unstable business environment. A look at the challenges and prospects of forecasting human resource needs in small business enterprises in Nigeria is therefore pertinent. This necessitated the need for our research.
This material content is developed to serve as a GUIDE for students to conduct academic research
HUMAN RESOURCE FORECASTING AND VIABILITY OF SMALL BUSINESS ENTERPRISES IN RIVERS STATE NIGERIA
A1Project Hub Support Team Are Always (24/7) Online To Help You With Your Project
Chat Us on WhatsApp » 09063590000
DO YOU NEED CLARIFICATION? CALL OUR HELP DESK:
09063590000 (Country Code: +234)
YOU CAN REACH OUR SUPPORT TEAM VIA MAIL: [email protected]
09063590000 (Country Code: +234)
