Human Resource Planning

5-2

DEFINE

It is process by which an organisation should move from its current manpower position to its desired manpower position. Though planning management strives to have the right number and right kind of people at the right place at the right time.

Objective

The basic purpose of HRP is to decide what positions the organisation will have to fill and how to fill them.

Objectives of human resource planning

Forecast personnel requirements

Cope with changes

Use existing manpower productively Promote employees in a systematic way

OBJECTIVES OF HUMAN RESOURCE PLANNING

To recruit and retain the HR of required quantity and quality. .

To foresee the employee turnover and make the arrangement for minimising turnover and filling up of consequent vacancies

OBJECTIVES OF HUMAN RESOURCE PLANNING

To meet the needs of the programmes of expansion, diversification etc.

To assess the surplus or shortage of HR and take measures accordingly

Estimate the cost of human resource

IMPORTANCE
Organisations use HRP to meet future challenges, cut costs, and achieve greater effectiveness

Importance of human resource planning

Create a talent pool Prepare people for future

Cope with organisational changes

Cut costs Help succession planning

The Process Of HRP

The HRP is a four step process: demand forecasting, supply forecasting, estimating manpower gaps and formulating HR plans. The demand for human resources is influenced by several factors

Forecasting resources

the

demand

for

human

External challenges Economic developments Political, legal, social, technological changes Competition

Organisational decisions Workforce factors

The Process Of HRP

The HRP is a four step process: demand forecasting, supply forecasting, estimating manpower gaps and formulating HR plans. The demand for human resources is influenced by several factors

FACTORS Of HRP
External Challenges: Liberalisation, privatisation and globalisation (LPG era) have created huge demand for people in software, finance marketing, and manufacturing fields.

Organisational Decisions: Decisions such as expansion, diversification, and relocation leading to demand for people possessing requisite skills Workforce Factors: Such as retirement, resignation, and termination etc creating manpower gaps.

Forecasting Techniques

HR forecasts are an attempt to find out an organisation's future demand for employees
Forecasting techniques

Expert forecasts Trend analysis Workforce analysis Workload analysis

Forecasting techniques
Expert Forecasts: These are based on the judgements of those who possess good knowledge of future human resource needs

Trend Analysis: This is based on the assumption that the future is an extrapolation from the past. Human resource needs, as such, can be
estimated by examining past trends.
2001-02 2002-03 2003-04 Production of Units No. of Workers : : : :

AN EXAMPLE OF TREND ANALYSIS

5,000 100 50 8,000 8000 /50

Ratio5000/100 No. of Workers required

Estimated Production :

100 = 160 5000 If supervisors have a span of 20 workers, 8 supervisorsare also needed in 2003-04.

Forecasting techniques

Workforce Analysis: All relevant factors in planning

manpower flows in a firm such as transfers, promotions,

new recruitments, retirement, resignation, into account while estimating HR needs etc are taken

Manpower flows in a bank

TRANSFERS IN

TRANSFER OUT/PROMOTION OUT RETIREMENT

RECRUITMENT IN

VRS
TERMINATION

PROMOTION IN

RESIGNATION

Forecasting techniques
Workload analysis: Based on the planned output, a firm tires to calculate the number of persons required for various jobs. An example of workload analysis
Planned output for the year Standard hours per piece 10,000 pieces 3 hours

Planned hours required

Productive hours per person per year No. of workers required

30,000 hours
1,000 hours (estimated on annual basis) 30

(allowing for absenteeism, turnover, idle time etc.)

If span of control in the unit is 10 per officer, then 3 officers are also required.

5-11

Supply Forecasting
A) Internal labour supply: a manpower inventory in

terms of
available

the
(their

size and quality of personnel

age, sex, education, training,

experience, job performance, etc) is prepared by HR departments.

usually

5-12

Estimated internal labour supply for a given firm

Sources of Inflows The Firm Projected Outflows Promotions Transfers Prom otions New Recruits Recalls Employees In Current Staffing Level Employees Out Quits T erminations Retirements Deaths Layoffs

Current staffing level

Projected outflows this year

Projected inflows this year

Firm s internal supply for this tim e next year

5-15

Supply Forecasting

Skills inventory: It is a summary of the skills

and abilities of non managerial employees used

in forecasting supply.

Skills inventory: an example

Name : A.K. Sen Number : 429 Key words Word Accounting Book Keeping Auditing Description T ax Ledger Computer records Education Degree MBA B.Com Computer Literacy

Date printed : 1-4-2004 Department : Work experience From 1998 2000 2002 T o 2000 2002 2003 T ax clerk Accountant Officer Special Qualifications Y ear 1998 1995 Course DBF Risk Management Position preference Accounting Auditing Date 1996 1999 Location choice Kolkata Delhi Bangalore Memberships 1. AIMA 2. ISTD 3. ICA Hobbies ABC Company XYZ Co. 41

Activity Supervision and analysis Supervision Analysis

Chief Accounts TT Bank

Major Finance Accounts

Languages

T ally Banking Software

French

Chess Football Boating

Employees Signature __________ Date _______________________

HR Department________ Date ________________

Supply Forecasting

Replacement chart: It is a visual

representation of who will replace whom in

the event of a job opening.

5-18

Replacement chart
G e nera lM a na ger V .K .G a rg A/2 P A to G e nera lM a na ger L. M athew s B /1 A ssista nt G e nera lM an ag er R .K .A rora A /2 B .K .N eh ru B /3 K ey N am es g ive na re repla cem ent ca nd id ates A . P ro m o ta ble n ow B . N ee ding d eve lo pm ent C . N o t suitab le to po sition 1. S u pe rio rp erform a nce 2. A bove A verag ep erform an ce 3. A cce ptab le pe rfo rm an ce 4. P o or p erform a nce

D ivisio n: H RM an a g er C .P . Th akur A /1

D ivision : A ccoun ting & T a xa tio nM an ag er A .T .R o y C /2 C e ntral R e gion M a na g er S .P .K um a r A /1 R .P a n de y B /3

D ivision : P lan n in gM a na ge r A .N .G up ta A /1 K .P .R a o B /1

T echnical A dvisor N .R .M urth y B /3

N orth ern R e gion M a na g er L.C .S riva tsav A /2 A .T ha pa r C /4

S ou th ern R e gion M an ag er A .S u bra m a nya m B /2 B .K .M e n on B /1

E a stern R eg io n M a na g er R .K rish na B /3

Formulating HR Plans
Once supply and demand for labour is known adjustments can be made formulating requisite HR plans

A variety of HR plans

Recruitment plan

Redeployment plan Redundancy plan Training plan Productivity plan Retention plan

Limitations Of Human Resource Planning

HR professionals are basically confronted with three problems while preparing and administering HR plans: accuracy, inadequate top management support, lopsided focus on quantitative aspects.