HUMAN RESOURCE PLANNING

Human Resource is an important corporate

asset and the overall performance of

companies depends upon the way it is put to

use.

Globally Major issues in today’s organizations

are skill shortages, competency gaps,

redundancies, downsizing, rightsizing.

INTRODUCTION:

HUMAN RESOURCE PLANNING

The process of analyzing and identifying the need

for and availability of Human Resources so that the

Organization can meet its objectives.

The Process of determining an Organization’s human

resources needs.

Or

Contd.,

“HRP includes estimation of how many

qualified people are necessary to carry out

the assigned activities, how many people

will be available, and what , if anything,

must be done to ensure that personnel

supply equals personnel demand at the

appropriate time in the future.”

-Terry L.Leap and

Michael

OBJECTIVES OF HRP:

Forecast future requirements of human resources with

different levels of skills.

Assess surplus or shortage, if any, human resources

available over a specified period of time. Anticipate the

impact of technology on job and requirements for

human resources.

The ultimate objective is to relate future human

resources to future enterprise needs so as to maximize

the future return on investment in human resources.

Control the human resources already

deployed in the organization.

Provide lead time available to select and

train the required additional human

resource over a specified time period.

Contd..

NEED AND IMPORTANCE OF HRP

Large numbers of employees who retire,

die, leave organizations, or become

incapacitated because of physical or mental

ailments, need to be replaced by new

employees. Human Resource Planning

ensures smooth supply of workers without

interruption

IMPORTANCE OF HRP1. FUTURE PERSONNEL NEEDS• Surplus or deficiency in staff strength• Results in the anomaly of surplus labour with the lack of

top executives

2. COPING WITH CHANGE• Enables an enterprise to cope with changes in competitive

forces, markets, technology, products & government regulations

3. CREATING HIGHLY TALENTED PERSONNEL• HR manager must use his/her ingenuity to attract & retain

qualified & skilled personnel• Succession planning

4. PROTECTION OF WEAKER SECTIONS• SC/ST candidates, physically handicapped, children of the

socially disabled & physically oppressed and backward class citizens.

IMPORTANCE OF HRP5. INTERNATIONAL STRATEGIES• Fill key jobs with foreign nationals and re-assignment

of employees from within or across national borders

6. FOUNDATION FOR PERSONNEL FUNCTIONS• Provides information for designing & implementing

recruiting, selection, personnel movement(transfers, promotions, layoffs) & training & development

7. INCREASING INVESTMENTS IN HUMAN RESOURCES• Human assets increase in value

8. RESISTANCE TO CHANGE AND MOVE• Proper planning is required to do this

IMPORTANCE OF HRP

9. OTHER BENEFITS• Upper management has a better view of the HR

dimensions of business decision• More time is provided to locate talent• Better opportunities exist to include women &

minority groups in future growth plans• Better planning of assignments to develop

managers can be done

HRP Process

Interfacing with strategic planning and scanning the

environment

Taking an inventory of the company’s current human

resources

Forecasting demand for human resources

Forecasting the supply of HR from within the

organization and in the external labor market

HRP Process Cont.

Comparing forecasts of demand and supply

Planning the actions needed to deal with anticipated

shortage or overages

Feeding back such information into the strategic planning

process.

FACTORS AFFECTING HRPI. TYPE & STRATEGY OF ORGANISATION

Internal growth

Informal

Inflexible

Growth through M & A

Reactive

Flexible

Proactive

Formal

FACTORS AFFECTING HRPII. ORGANIZATIONAL GROWTH CYCLES &

PLANNING• Embryonic stage – No personnel planning• Growth stage – HR forecasting is essential• Maturity stage – Planning more formalized & less

flexible• Declining stage – Planning for layoff,

retrenchment & retirement

III. ENVIRONMENTAL UNCERTAINITIES• Political, social & economic changes• Balancing programmes are built into the HRM

programme through succession planning, promotion channels, layoffs, flexi time, job sharing, retirement, VRS, etc….

FACTORS AFFECTING HRPIV. TIME HORIZONS• Short-term & Long-term plans

V. TYPE & QUALITY OF FORECASTING INFORMATION• Type of information which should be used in

making forecasts

VI. NATURE OF JOBS BEING FILLED• Difference in employing a shop-floor worker &

a managerial personnel

VII. OFF-LOADING THE WORK

THE HRP PROCESS

Organizational objectives and

policies

HR Needs forecast

HR Supply forecast

HR Programming

HRP Implementation

Control and evaluation of programme

Surplus Restricted Hiring,Reduced

Hours,VRS,Lay off etc

Shortage Recruitment and

Selection

HR Demand Forecast Demand forecasting is the process of

estimating the future quantity and quality of people required.

The basis of the forecast must be the annual budget and long-term corporate plan, translated into activity levels for each function and department

Demand forecasting must consider several factors both internal and external. Among external factors are

competition(foreign and domestic), economic climate, laws and

regulatory bodies, changes in technology and

social factors. Internal factors include budget constraints,

production levels, new products and services, organizational structure and employee

separation.

Demand forecasting helps to :◦ Quantify the jobs necessary for producing a given

number of goods◦ Prevent shortage of people where and when they

are needed most◦ Determine what staff-mix is desirable in the future◦ Monitor compliance with legal requirements with regard to reservation of jobs ◦ Asses appropriate staffing levels in different parts of the organization so as to avoid unnecessary costs

Forecasting Techniques

Managerial judgment Ratio-trend analysis Work study techniques Delphi technique Other techniques

Managerial Judgement In this all managers sit together, discuss

and arrive at a figure which would be the future demand for labour.

This technique may involve a ‘bottom-up’ or ‘top-down’ approach. A combination of both could yield positive results.

Ratio-trend analysis This is the quickest forecasting technique. This technique involves studying past ratios,

say, between the number of workers and sales in an organization and forecasting future ratios, making some allowance for changes in the organization or its method.

Work-study techniques Work study techniques can be used when it

is possible to apply work measurement to calculate the length of operations and the amount of labour required.

Delphi technique• This technique is the method of forecasting

personnel needs.• It solicits estimates of personnel needs from

a group of experts, usually managers.• The HRP experts act as intermediaries,

summarize the various responses and report the findings back to the experts.

• Summaries and surveys are repeated until the experts opinion begin to agree.

HR SUPPLY FORECAST

Supply forecasting measures the no of people likely to be available from within and outside an organisation,after making allowance for absenteeism, internal movements and promotions, wastage and changes in hours and other conditions of work.

Need for supply forecast Quantify no of people and positions

expected in near future. Clarify the staff mixes. Prevent shortage of people Asses present staffing levels in different

parts of organization.

Supply Analysis Existing human resources

Internal sources of supply

External sources of supply

Existing human resources

• Skill inventories – info about non-managers.

1. Personal data 2. Skills 3. Special qualifications 4. Salary and job history 5. Company data 6. Capacity of individual 7. Special preference of individual

Contd..

• Management inventories 1. Work history 2. Strengths 3. Weakness 4. Promotion potential 5. Career goals 6. Personal data 7. Number and types of employees supervised 8. Total budget managed 9. Previous management duties.

Uses of HR Information system

HR planning and analysis Equal employment Staffing HR development Compensation and benefits Health,saftey and security Employee and labor relations

Internal supply and techniques

Inflows and outflows IS= current supply – outflow + inflow

Turnover rate No of seperations during one year ×

100 Avg no of employees during the year

Contd… Conditions of work and absenteeism. Absenteeism is given by no of persons – days lost

×100 Avg no of persons × no of working days

Productivity level

Movement among jobs

External supply New blood and new experience

To replenish old personnel

Organizational growth and diversification

HR programming After personal demand and supply are

forecast the vacancies should be filled at right time with right employees.

HR Plan implementation Converting HR plan into action. Action programmes are..

Recruitment Selection & placement Training and development Retraining & redeployment The retention plan The redundance plan The succession plan

If Shortage of employees- Do-

Hire new full-time employees Offer incentives for postponing retirement Re-hire retired employees on part-time basis Attempt to reduce turnover Bring in over-time for present employees Subcontract work to another company Hire temporary employees Re-engineer to reduce needs

If surplus of employees is expected-Do-

Do not replace employees who leave Offer incentives for early retirement Transfer or reassign excess employees Use slack time for employees training or

equipment maintenance Reduce work hours Pay off employee

Training and development It covers no. of trainees required It necessary for existing staff Identification of resource personal for

conducting development programmes Frequency of training and development

programmes Budget allocation

Retraining and redeployment:◦ New skill should be imported to existing employee

Retention plan:Compensation planPerformance appraisalEmployees leaving in search of green pasturesThe induction crissShortagesUnstable recruits

Downsizing plan Who is to be redundant and where and

when Plans for re-development or re-training Steps to be taken to help redundant

employees finding new jobs Policy for declaring redundancies Programme for consulting with unions or

staff associations

Managerial succession planning Analysis of demand Audit of existing executives Planning of individual career path Career counseling Accelerated promotions Performance related training and

development Planned strategic recruitment Filling the openings

Control and evaluation Establish the reporting procedures Identifying who are in post and those who

are in pipe line It should report employment costs against

budget and trends in wastage and employment ratios

Human resource planning and the government Institute of Applied Manpower Research

Requisites for successful HRPRecognize of corporate planningBacking of top management for HRPHRP responsibilities should be centralizedPersonnel record must be complete, up-date and readily

availableThe time horizon of plan should be long for remedial actionThe techniques of planning should be best suitPlans should be prepared by skill levelData collection, analysis, techniques of planning should be

constantly revised

Barriers to HRP People question the importance of making HR practices

future oriented and role assigned to HR practitioners in formulation of organizational strategies

HR practitioners are perceived as expert in handling personnel matters, but are not experts in managing business.

HR information often is incompatible with the information used in strategy formulation.

Conflicts may exist between short term and long term HR needs.

Conflicts between quantitative and qualitative approaches to HRP.

Non-involvement of operating managers renders HRP ineffective.