HUMAN RESOURCE

PLANNING
BY DR. SAMINA KARIM
 IMPORTANCE OF HRP
• Future Personnel Needs: HRP determine the future personnel needs of the organization - staff surplus or
deficiency, this adds to the significance of HR planning. All public sector enterprises find themselves
overstaffed because of limited or no planning for personnel requirement and recruitment spree. Usually,
organizations follow VRS ‘voluntary retirement scheme’. Effective HRP system will also enable the
organization to have good succession planning.
• Part of Strategic Planning: HRP has become an integral part of strategic planning as HRP provides inputs in
strategy formulation process in terms of deciding whether the organization has got the right kind of human
resources to carry out the strategy. HRP is also necessary during the implementation stage, to make resource
allocation decisions related to organization structure, process and human resources.
• Creating Highly Talented Personnel: despite a great pool of educated unemployed, it is the discretion of HR
manager to recruit the right person with right skills. Manpower planning in the form of skill development is
required to help the organization in dealing with the problem of skilled manpower shortage.
 IMPORTANCE OF HRP

• International Strategies: An international expansion strategy of an organization is facilitated to a great

extent by HR planning. The HR department’s ability to fill key jobs with foreign nationals and reassignment of
employees from within or across national borders remains a major challenge for the organizations. Without
effective HRP and attention to employee recruitment, selection, placement, development, and career
planning, the growing competition for foreign executives may lead to expensive and strategically descriptive
turnover.
• Foundation for Personnel Functions: HRP provides essential information for designing and implementing
personnel functions, such as recruitment, selection, training and development, personnel movement like
transfers, promotions and layoffs.
• Increasing Investments in Human Resources: Organizations are making increasing investments in human
resource development compelling the increased need for HRP. Organizations are realizing that human assets
can increase in value more than the physical assets. Personnel investment is made either through direct
training or job assignment, yet it is difficult to assess the financial value of the trained, flexible, motivated
productive workforce. It is acknowledged that quality of work force is responsible for both short term and
long term performance of the organization.
 IMPORTANCE OF HRP
• Resistance to Change: Employees are always reluctant whenever they hear about change
or about job rotation. Planning is required to move employee from one employee from
one department to another. Even planning is required for job rotation to match the skills
required and existing skills of the employees.
• Uniting the Viewpoint of Line and Staff Managers: HRP helps to unite the viewpoints of
line and staff managers. Though HRP is initiated and executed by the corporate staff, it
requires the input and cooperation of all managers within an organization. Each
department manager knows about the issues faced by his department more than anyone
else. So communication between HR staff and line managers is essential for the success of
HR Planning and development.
• Succession Planning: HRP prepares people for future challenges. The ‘stars’ are picked up,
trained, assessed and assisted continuously so that when the time comes such trained
employees can quickly take the responsibilities and position of their seniors as and when
situation arrives.
 IMPORTANCE OF HRP

• Other Benefits:
(a) HRP helps in judging the effectiveness of manpower policies and procedures.
(b) It develops awareness on effective utilization of human resources for the
overall development of organization.
(c) It facilitates selection and training of employees with adequate knowledge,
experience and aptitudes so as to carry on and achieve the organizational
objectives
(d) HRP encourages the company to review and modify its HR policies and
practices and to examine the way of utilizing the human resources for better
utilization.
FACTORS AFFECTING HRP
Type and Strategy of the Organization:
• Type of the organization determines the production processes involve, number and
type of staff needed and the supervisory and managerial personnel required.
• HRP need is also defined by the strategic plan of organization. If the organization has a
plan for organic growth then organization need to hire additional employees.
• On the other hand If the organization is going for mergers and acquisition, then
organization need to plan for layoffs, as mergers can create, duplicate or overlap
positions that can be handled more efficiently with fewer employees.
• Organization first decides whether to be reactive or proactive in HRP. Organizations
either carefully anticipate the needs and systematically plan to fill the need in advance
(proactive) or can simply react to the needs as they arise (reactive).
 FACTORS AFFECTING HRP
• Organizational Growth Cycles and Planning: All organizations pass through different stages of
growth from the day of its inception. In the stage of growth, organization determines the
nature and extends of HRP. Small organizations in the earlier stages of growth may not have
well defined personnel planning but in growth stage it is required to plan its human resource.
At this stage organization gives emphasis upon employee development, but when the
organization reaches the mature stage it experience less flexibility and variability resulting in
low growth rate. HR planning is more formalized, less flexible and innovative and the problem
like retirement and possible retrenchment dominate planning. During the declining stage of
the organization HRP takes a different focus like planning to do the layoff, retrenchment and
retirement. Organization is reactive in this stage.
• Environmental Uncertainties: Political, social and economic changes affect all organizations
and the fluctuations that are happening in these environments affect organizations drastically.
Personnel planners carefully formulate recruitment, selection, training and development
policies and procedures. The balance in the organization is achieved through careful
succession planning, promotion channels, layoffs, flexi time, job sharing, retirement, VRS and
other personnel related arrangements.
FACTORS AFFECTING HRP
• Time Horizons: HR plans can be short term or long term; where short term plans
spans from six months to one to three year, while long term plans spread over
three to twenty years. The extent of time period depends upon the degree of
uncertainty that is prevailing in an organizations environment. Greater the
uncertainty, shorter the plan time horizon and vice versa.
 FACTORS AFFECTING HRP
• Type and Quality of information: There are multitude of sources. The forecast
depends to a large extent upon the type of information and the quality of data that is
available to personnel planners. The quality and accuracy of information depend
upon the clarity with which the organizational decision makers have defined their
strategy, structure, budgets, production schedule and so on.
 FACTORS AFFECTING HRP

• Nature of Jobs Being Filled: Careful concern about the nature of the jobs
being filled is required. Employees on lower tier can be filled with limited
skills hastily but, while hiring employees for higher posts, selection and
recruitment needs to be careful. Organization need to anticipate vacancies far
in advance as possible, to provide sufficient time to recruit suitable
candidate.
• Outsourcing: Several organizations outsource part of their work to outside
parties. Outsourcing is a regular feature both in the public sector and private
sector companies. Outsourcing is usually done for non critical activities and is
part of HRP.
HRP PROCESS
• Environmental Scanning:
It is a systematic monitoring of the external forces that influence the organization. The
following forces are essential for pertinent HRP.
• Economic factors, including general and regional conditions.
• Technological changes
• Demographic changes including age, composition and literacy,
• Political and legislative issues, including laws and administrative rulings
• Social concerns, including child care, educational facilities and priorities. By scanning
the environment for changes that will affect an organization, managers can anticipate
their impact and make adjustments early.
• Organizational Objectives and Policies: HR plan and its specific requirements in terms of
number and characteristics of employees should be derived from organizational
objectives. The HR department must specify its objective through HR utilization in the
organization.
 HRP PROCESS….
• HR Demand Forecast: Demand forecasting is the process of estimating the future quantity and quality of people required
to meet the future needs of the organization. When corporate plan are translated into activity, it forms basis for HR
forecast.
For example,
1. in the case of a manufacturing company, the sales budget will form the basis for production plan giving the number and
type of products to be produced in each period. This will form the basis upon which the organization will decide the
number of hours to be worked by each skilled category of workers.
2. Once the number hours required is available organization can determine the quality and quantity of personnel required
for the task.
3. Demand forecasting is influenced by both internal factors and external factors: external factors include competition,
economic climate, laws and regulatory bodies, changes in technology and social factors whereas internal factors are
budget constraints, production level, new products and services, organizational structure and employee separations.
1. Demand forecasting is essential because it helps the organization to 1. Quantify the jobs, necessary for producing a
given number of goods, 2. To determine the nature of staff mix required in the future, 3. To assess appropriate
levels in different parts of organization so as to avoid unnecessary costs to the organization, 4. To prevent shortages
of personnel where and when, they are needed by the organization. 5. To monitor compliances with legal
requirements with regard to reservation of jobs.
Techniques like managerial judgment, ratio- trend analysis, regression analysis, work study techniques, Delphi
techniques are some of the major methods used by the organization for demand forecasting.
 HRP PROCESS….

• HR Supply Forecast: Supply forecast determines the supply of required number of workers
from within and outside an organization, after making allowance for absenteeism, internal
movements and promotions, wastage and changes in hours, and other conditions of work.
• Supply forecast is required because it is needed as it 1. Helps to quantify the number of
people and positions expected to be available in future to help the organization realize its
plans and meet its objectives 2. Helps to clarify the staff mixes that will arise in future 3. It
assesses existing staffing in different parts of the organization. 4. It will enable the
organization to prevent shortage of people where and when they are most needed. 5. It
also helps to monitor future compliance with legal requirements of job reservations. Supply
analysis covers the existing human resources, internal sources of supply and external
sources of supply.
 HRP PROCESS….

• HR Programming: Once an organization’s personnel demand and supply are forecasted, this needs to be
balanced to fill the vacancies.
• HR Plan Implementation: HR implementation requires converting an HR plan into action which follows a
series of action as a part of HR plan implementation. The activity may includes recruitment, selection and
placement, training and development, retraining and redeployment, retention plan, succession plan etc.
• Control and Evaluation: Control and evaluation represent the final phase of the HRP process that includes
budgets, targets and standards. The achievement of the organization will be evaluated and monitored
against the plan. During this final phase organization will be evaluating on the number of people employed
and the employment cost against the budget and wastage accrued so that corrective action can be taken in
future.
HRP PROCESS
REQUISITES FOR SUCCESSFUL HRP
• HRP must be recognized as an integral part of corporate planning
• Support of top management is essential
• There should be some centralization with respect to HRP responsibilities in
order to have co-ordination between different levels of management.
• Organization records must be complete, up to date and readily available.
• Techniques used for HR planning should be those best suited to the data
available and degree of accuracy required.
• Data collection, analysis, techniques of planning and the plan themselves
need to be constantly revised and improved in the light of experience.
 BARRIERS TO HRP
Human Resource Planners face significant barriers while formulating HRP. The major barriers are elaborated
below:
• The personnel plan conceived and formulated by the HR practitioners when enmeshed with organizational
plan, might make the overall strategic plan of the organization ineffective.
• HR information often is incompatible with other information used in strategy formulation. Strategic planning
efforts have long been oriented towards financial forecasting, often to the exclusion of other types of
information. Financial forecasting takes precedence over HRP.
• Conflict may exist between short term and long term HR needs. For example, there can be a conflict between
the pressure to get the work done on time and long term needs, such as preparing people for assuming greater
responsibilities. Many managers are of the belief that HR needs can be met immediately because skills are
available in the market as long as wages and salaries are competitive. Therefore, long times plans are not
required, short planning are only needed.
• There is conflict between quantitative and qualitative approaches to HRP. Some people view HRP as a number
game designed to track the flow of people across the department. Others take a qualitative approach and
focus on individual employee concerns such as promotion and career development. Best result can be
achieved if there is a balance between the quantitative and qualitative approaches.
• Non-involvement of operating managers renders HRP ineffective, as HRP is not limited to HR department only.
Successful planning needs a co-ordinated effort on the part of operating managers and HR personnel.
Thank You