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INTRODUCTION OF HUMAN RESOURCE PLANNING

The process used by an organisation to assess the demand

for and supply of future human resources. It is the process
used to determine the numbers and kinds of employees an
organisation will recruit or retrench, consistent with the
business strategy or strategic plan.
Is performed by both line managers and HR managers.
 Definition::
Definition

Occording to Geisler, ³Manpower planning is the

process ± including forecasting, developing and
controlling by which a firm ensures that it has-
‡ The right number of people,
‡ The right kind of people,
‡ Ot the right places,
‡ Ot the right time, doing work for which they are
economically most useful´.
The Four Phases of the HR Planning
1. Situational Analysis/Environmental Scanning
2. Forecasting HR demand - Assessment future
HR needs
3. HR supply analysis - Assessment of current
HR
4. Action planning or programme of action to
fulfil future HR needs
 ãey Elements of HRP Process
Prof. Geisler outlined the responsibilities of Human Resource Department
in
respect of manpower planning thus:

‡ Assist and counsel operating managers to plan and set objectives.

‡ Collect and summaries manpower data keeping long-run objectives and

broad organizational interests in mind.

‡ Monitor and measure performance against the plan and keep top
management informed about it.

‡ Provide proper research base for effective manpower and organizational

planning.
Thus, the three key elements of the process are

Forecasting the demand for labor,

Performing a supply analysis, and

Balancing supply and demand considerations.

Rnce the corporate strategy and objectives are clear, estimates of demand and
supply can be made with the help of certain approaches and methods.When each
projection is formulated, the difference between them is determined. This
difference is termed as known as Manpower gap.The whole purpose behind
human resources planning is to close this gap!!
Rne thing, which we should consider before beginning the process of forecasting:
Always decide on
a.The approach of how the estimation are to be based- qualitative or qualitative,
b. Basic factors to be considered, whether we are projecting wastage or
redundancy or labor costs or absenteeism or labor turnover,
c. Frequency of the forecasting exercise (that is, dealing with: rate of changes and
matching estimations), and finally,
d. Specific techniques to be adopted (this depends upon the approach adopted)
such as time series analysis, Markov analysis, probability techniques, work load
analysis, work study analysis, job analysis etc.

abour Demand equals Supply«
RESPR SE:
| Replacement of quits form inside or
outside
| Internal transfers and redeployment
 Forecasting the demand for labour
þMorecasting a company¶s future demand in human resources is a necessary procedure in light
of organizational objectives and strategies.

þMorecasting is based on information from the past and the present to identify expected future
conditions. Such information may come from external environmental scanning and/or the
assessment of internal strengths and weakness.

þO key component of HRP is forecasting the number and type of people needed to meet
organizational objectives. Since it¶s an open system that we exist in, a variety of organizational
factors, including competitive strategy, technology, structure, and productivity can influence the
demand for labor. Mor example, utilization of advanced technology is generally accompanied by
less demand for low-skilled workers and more demand for knowledge workers.

þThe HR expert or an experienced manager who handles the forecasting process needs to
consider specific openings that are likely to occur and to use such data as the basis for planning.
Openings are created when employees leave a position because of promotions, transfers, and
terminations.
þOnce human resources needs have been identified, the availability must be checked. The
forecast of the availability of human resources is considering both internal and external
supplies.

þInternally, succession plans developed to identify potential personnel changes, due to

promotion, retirement, resignation, etc for each department in an organization are examined.
By the end of this analysis, the organization is able to know if there are employees to cover
future demand from within its resources.

þExternally, there are many factors, such as the labor-force population estimates, trends in
the industry, technological developments. The organization must take such factors into
consideration to be able to know if ideal candidates can be located.

þThe basis of the manpower forecast should be the annual budget and long term corporate
plan, translated into activity levels for each function and department. In a manufacturing
company, the sales budget would be translated into a manufacturing plan, giving the
numbers and types of products to be made in each period. Mrom this information the number
of man-hours, by skill categories, to set the target for production, would start from the
production plan setting out a programme.


  
 
   
  
  


 
  
  

    




 

 
     


 




 

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þTechnology, however, is a double-edged weapon and hence, its impact on HR plans is difficult to
predict. Mor example, computerization programs in Banks, Railways, Post and Telegraph
Departments may reduce demand in one department (book keeping, for example) while
increasing it in another (such as computer operations.)

þ High technology with all its attendant benefits may compel organizations to go lean and
downsize workforce suddenly. Employment planning under such situations becomes complicated

þExternal factors such as business cycles-economic and seasonal trends-can also play a role. The
Internal Revenue Service, for example, relies heavily on temporary employees between January
and Opril when tax returns are received for processing.
There are several techniques use
for forecasting
1. Managerial Judgment
2. Trend Analysis
3. Ratio Analysis
4. Scatter Plot
5. Computerized Forecast
6. Work Study Technique
7. Delphi technique
8. Regression Analysis
9. Econometric Models

cont«..
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Method which forecast employments requirements

on the basis of some organizational index and is one
of the most commonly used approaches for
projecting HR demand.
1. Business Factor Annual Volume of Sales.
2. Total umber of Employees.
3. Compare the Productivity Ratio.
4. Calculate Human Resources demand.
5. Forecasted Human Resource Requirements.
 ` 


Another approach , Ratio analysis , means making

forecasts based on the ratio between.

1. Some causal factor (like sales volume)

2. The number of employees required

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The nominal group technique is a decision making

method for use among groups of many sizes, who
want to make their decision quickly, as by a vote, but
want everyone·s opinions taken into traditional voting.

I. Introduction and Explanation

II. Silent Generation of Ideas
III. Sharing Ideas
IV.Group Discussion
V. Voting and Ranking
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 SUPP

A D DEMA D:
´RRGA ISATIR A
IMPACTSµ

| Product demand and need for increased

productivity, can create labour demand

| The Internal and External

abour Markets
are the sources of
abour Supply
 FORECASTING SUPPLY

Once an organization has forecast its future requirements for

employees, it then goes on to the next search that is from where can
it fulfill its requirements. It therefore needs to determine if there are
sufficient numbers and types of employees and how many are
eligible for the plausible positions. Supply analysis thus, involves
planning for procurement: who, from where, how and when of
recruitment. It scans the internal and external environment for the
best-fit candidate for the positions in question.
Thus, there are two source of supply-
þInternal

þExternal.
 Internal sources:

þThe most popular approach to be followed by all managers is to look within the
organization among its cadre first. Until and unless the opening is not related to
immensely diversified field of which the existing workforce might not possess
requisite skills, and the cost of training may be working out to be high, it is easier to
go in for an internal source for recruitment. Because it is cost saving in many ways
to utilize what is already available to the organization.

þO profile of employee in terms of age, sex, education, training, experience, job

level, past performance and future potential is continuously maintained for use
whenever required. Mor instance, the HRM group might include the job titles of HR
assistant, HR manager, and HR director. The secretarial group might include
secretarial clerk, principal secretary, senior secretary, and administrative assistant.

þThus, if the requirements in terms of growth/diversification, internal movements of

employees (transfer, promotions, retirement, etc.) are determined in advance then the
data can be very useful.
 External sources
þItis only when the cost of procuring the labour from internal sources is
more and also the present staff cannot be spared for the future
assignment, the company can refer to the regularly on what is available
now, what will be available later.
þMor example, a company in the present scenario wanting to start its BPO
operations in India may not have problem which a company 10 years
back would have faced, as there are ample requisite skills available in
the market. Not only skilled labor but also they are motivated to join
such company for fast earnings.
þThus, HR planners need to keep themselves abreast of the Labour
market conditions such as local employment, trends of relevant
categories of employees, competition for such skills, availability of part
time labour, migration trends of labor, etc external market.
 Overcoming employee shortages

þRvertime
þPart time workers
þTemporaray employment agencies
þTransfers
þContract workers
þPromotions
þFull time employees
 Managing Oversupply
þHiring freeze
þEarly retirement offers
þJob sharing
þUse of part time workers
þInternal transfers


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 SOURCES OF SUPPLY OF MANPOWER

Internal supply:
Armed with HR audits, Planners can proceed with the analysis of internal supply.
The techniques generally used for the purpose are
(i) inflows and outflows,
(ii) conditions of work and absenteeism,
(iii) productivity level, and
(iv) movement among jobs.

External Supply:
In addition to internal supply, the organization needs to look out for prospective employees from
external sources.
External sources are important for specific reasons:
(i) new blood and new experience will be available
(ii) organization needs to replenish lost personnel, and
(iii) organizational growth and diversification create the needs to use external sources to obtain
additional number and type of employees.

Sources of external supply vary from industry to industry, organization to organization, and also
from one geographical location to another. Some organizations have found that their best source
of further employees is colleges and universities, while others achieve excellent results from
consultants, competitors or unsolicited applications .
 Future Manpower requirements

Morecast has to be based on some estimate of the future demand for

| Minal products or service produced

| Changing in technology and financial resources
| The probable condition of the external labour market
| Internal manpower capabilities
| Total staffing requirements to achieve the organisational goals
THANãS