Human Resource Planning is a process that forecasts the company’s future manpower demand by analyzing the current supply and the gaps if any.
It also takes into consideration the impending retirements and transitions, the existing personnel supply and filling the gap through personnel related programs and training.
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Human Resource Planning Process
Human Resource Planning Process usually consists of the following steps:
- Forecasting Manpower
- Assessing Current Manpower Inventory
- Identifying Manpower Gap
- Formulating Manpower Plan
HR Planning ensures that a predetermined number of people with correct qualification and skill sets are available for the future. This needs to be done to guarantee the availability of the human resources needed by an organization to meet its strategic business objectives.
- The basis of forecasting is that the annual budgets and long term projections are divided into activity levels for each function and department.
- This further helps in determining the quality and quantity of personnel required to perform those activities effectively.
Demand forecasting is dependent on several factors both external and internal.
- External factors include regulatory, governmental, economic and social changes, technical development and competition etc.
- Internal factors include organization’s strategic plan, sales and production budgets, investment in new products, services and ventures, impending retirements, terminations, resignations etc.
Assessing Current Manpower Inventory
The next step in HR Planning is to estimate the quantity and quality of employees available within the organization to fill the positions.
- In the case of internal labour supply, the HRIS (human resource information system) is referred to, HRIS uses computers for collecting, storing, maintaining and updating data from time to time of its employees.
- In order to foresee and estimate the absenteeism, turnover and attrition rate historical trends are recorded and examined.
This gives an idea of an approximate time period when the important positions might fall vacant and the number of employees who will be present in the various positions within the organization at any given point in time.
Identifying Manpower Gap
Once the number and type of employees needed are determined and the supply of manpower is estimated, a reconciliation of the two will determine the quantitative and qualitative gaps in the organization.
It will throw a light on the number of people to be recruited or make the organization aware whether there has been overstaffing. This forms the foundation of preparing a HR plan.
Formulating Manpower Plan
Once the human resource requirements and necessary changes to be applied are identified, they need to be translated into a concrete HR plan supported by policies, programs, strategies etc.
Below are some of the plans and strategies implemented to achieve the goals-
- Recruitment and selection plan: Recruitment and selection is the process of hiring the right number and type of people at the right place and at the right time.
- Redeployment and training: To keep the employees abreast with the changing technology or product lines they should be imparted new skills.
- Alternatives to Hiring: There are other alternatives that can be undertaken as an alternative to hiring additional employees for e.g encouraging employees nearing retirement to extend their years of service by rewarding late retirements, rehire, launching overtime schemes by paying a higher commission for overtime etc.
- Retention Plans: Various retention plans are implemented to avoid attrition in an organization. Organizations might increase the wages, provide better career opportunities, improve the working conditions, avoid hiring unstable recruits etc.
- Downsizing Plan: Organizations resort to downsizing plans when the supply of manpower exceeds the demand and there is a surplus in the staff. In such a case staff is underutilized and there is a need for trimming the labour force.
Examples: voluntary retirement schemes, laying off the redundant staff etc.
- P.Reilly, “Human Resource Planning”, The Institute of Employment Studies, London 1997
- J. Walker, “Human Resource Planning: 1990s Style”, Human Resource Planning, 13, 1990
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