HUMAN RESOURCE

PLANNING
Anything HR Solutions
MEANING AND DEFINITION
 In simple words, HRP is understood as the
process of forecasting an organization's
future demand for, and supply of, the right
type of people in the right number.
 After this only the HRM department can
initiate the recruitment and selection
process
 Its called by manpower planning, personal
planning or employment planning
DEFINITION OF HRP
• It includes the 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 personal supply equals
personnel demand at the appropriate point in the
future.
• Basically it’s the process by which an organization
ensures that it has the right number & kind of people,
at the right place, at the right time, capable of
effectively & efficiently completeing those tasks that
will help the organisation achieve its overall objectives.
Importance of HRP

 Future personnel needs

 Part of strategic planning
 Create highly talented personnel
 International strategies
 Foundation for personnel functions
 Increasing investments in HR
 Resistance to change and move
IMPORTANCE OF HRP
1. 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 HRP

5. 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
FACTORS AFFECTING HRP
II. 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 HRP
IV. 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
 ENVIRONMENT

ORGANISATIONAL
OBJECTIVES AND POLICIES

HR NEEDS FORECAST HR SUPPLY FORECAST

HR PROGRAMMING

HRP IMPLEMENTATATION

CONTROL AND
EVALUATION OF PROGRAMME

SURPLUS SHORTAGE
RESTRICTED HIRING RECRUITMENT
REDUCED HOURS AND SELECTION
VRS, LAY OFF, etc

THE HRP PROCESS

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.
Forecasting Techniques
 Managerial judgement
 Ratio-trend analysis
 Work study techniques
 Delphi technique
 Flow models
 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.
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 – Once demand and supply of
human resources are forecast, the two must be
balanced.
 Vacancies should be filled by the right employees
at the right time.
 Shortage of employees
a. Hire new employees
b. Postpone retirement
c. Reduce turnover
d. Overtime
e. Sub contract work to another company.
 Surplus of Employees
a. Voluntary Retirement
b. Freeze Hiring
c. Reduce work hours
d. Lay off employees
 HRP Implementation – Converting HR Plan to
action.
a. Recruitment, Selection and Placement –
hiring and placing the right people for right
job.
b. Training – Train the employees to perform on
the job.
c. Retention Plan – Avoid separation of
employees through compensation, and other
benefits.
d. Downsizing Plan – Trimming of labor force.
• Control and Evaluation of HR Program – Compare
actual performance to standard performance. For .
E.g. No. of employees recruited against recruitment
targets.
Recruitment
Selection & placement

 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
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