What is Human Resource Planning?
Human Resource Planning is a process that forecasts the company’s future manpower demand by analyzing the current supply and the gaps if any.
The ultimate mission or purpose of Human Resource Planning is to align the future human resources to future organizational strategies and needs so as to maximize the future returns on investment in human resources.
It ensures that an organization is always equipped with the right number and kind of people, at the right place and time. They should be capable of effectively and efficiently accomplish their tasks that are required to achieve the goal of the organization as a whole.
Table of Contents
- 1 What is Human Resource Planning?
- 2 Human Resource Planning Definition
- 3 Nature of Human Resource Planning
- 4 Scope of Human Resource Planning
- 5 Features of Human Resource Planning
- 6 Objectives of Human Resource Planning
- 7 Factors Affecting Human Resource Planning
- 8 Human Resource Planning Process
- 9 Barriers to Human Resource Planning
- 10 Summary
- 11 Reference
Human Resource Planning Definition
According to Geisler, “Manpower 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,
- At the right places,
- At the right time,
- Doing work for which they are economically most useful”.
Nature of Human Resource Planning
The nature of human resource planning can be understood as follows:
- Human Resource Planning deals with the manpower needs of an organisation.
- HRP helps in discovering the unused talent presently available with the organisation.
- HRP tells about the present inventory of manpower of the organisation.
- It also projects the future manpower needs of the organisation.
- It deals with the procurement, utilization, improvement and preservation of manpower.
Scope of Human Resource Planning
- It keeps the record of current manpower with the organization.
- Assessing the future requirements of manpower for organization objectives.
- To make the manpower recruitment plans.
- To phase out the surplus employees.
- To make a layout of a training programme for different categories of employees.
Features of Human Resource Planning
These are features of human resource planning:
- Well Defined Objectives
- Forecasting Future Manpower Requirements
- Making an Inventory of Present Manpower Resources
- Anticipating Manpower Problems by Projecting Present Resources into the Future
- Planning the Necessary Programmes
Well Defined Objectives
Organisational objectives and goals in its strategic planning and operating planning may form the objectives of human resource planning. On the basis of an organisation’s goals, human resource needs are planned.
Forecasting Future Manpower Requirements
In this, we use mathematical projections to project trends in the economic environment and development of the industry.
Making an Inventory of Present Manpower Resources
After making the inventory; assessment has to be done to the extent to which these resources are employed optimally. Procuring competent personnel as per the requirement requires positive recruitment efforts and the development of a variety of recruitment sources.
Anticipating Manpower Problems by Projecting Present Resources into the Future
Then comparing them with the forecast of requirements to determine their adequacy, both quantitatively and qualitatively.
Planning the Necessary Programmes
Proper planning of the requirement, selection, training, development, utilization, transfer, promotion, motivation and compensation should be done in order to ensure that future manpower requirements are properly met.
Objectives of Human Resource Planning
The main objective of Human Resource Planning is to determine its future HR requirements and to plan as to how the existing HR can be utilized optimally. It aims to ensure the best fit between employees and jobs while avoiding manpower shortages and surpluses.
Further, the objectives of Human Resource Planning are discussed below:
- To Forecast Future Requirements for HR
- Realizing Organizational Goal
- Effective Management of Change
- Effective Utilization of Human Resources
- Promoting Employees
To Forecast Future Requirements for HR
HR Planning is essential to project the future manpower needs of an organization. If HR planning is not done effectively it can lead to overstaffing or understaffing.
Realizing Organizational Goal
The basic aim of HR planning is to have an accurate and optimum number of employees at any given point in time. They should have the skills required to accomplish each job to meet the organizational objectives.
Effective Management of Change
An organization faces constant internal and external changes e.g mergers, acquisitions, govt regulations, technology etc. These changes are to be proactively assessed from time to time so that HR plan would fit in with the strategic business objectives.
HR planning should ensure that even during such times of changes the organization should not suffer due to non-availability of qualified people.
Effective Utilization of Human Resources
HR assesses the current human resources capacity based on their competencies, skills, training, qualification etc. against the capacity needed to achieve the organizational goal.
Keeping the inventory of the existing personnel helps utilize the existing resources more effectively in relation to the job requirement. HR strategies, plans and programs are then designed, developed and implemented to close the gaps.
HR planning is required to maintain data and assess the performance of each employee. A promotion is viewed as desirable by employees as it is a form of recognition for those who make significant and effective work contribution.
HR plan continuously works on ensuring regular promotions to competent people on a justifiable basis.
Factors Affecting Human Resource Planning
Human resource planning can be very clearly defined as the process of identifying the number of people required by an organisation in terms of quantity and quality. The various factors affecting HRP are as follows:
- Technical Changes in Society
- Organisational Changes
- Demographic Changes
- Shortage of Skill due to Labour Turnover
- Multicultural Workforce
The employment situation of any country affects HRP in different ways, i.e. in countries where there is greater unemployment; there may be more pressure on the organisation, from the government to appoint more people. Similarly, there are some organisation’s may force a shortage of skilled labour and they may have to appoint people from other countries.
Technical Changes in Society
Technology changes at a very fast pace and new people having the required knowledge are required for the organisation. In some cases, the organisation may retain existing employees and train them the new technology but in some cases, the organisations have to remove existing people and appoint new.
Changes take place within the organisation from time to time i.e. the company diversify into new products or close down business in some areas etc. In all such cases, the HRP process of appointing or removing people will change according to the situation.
Demographic changes refer to things referring to age, population, the composition of workforce etc. From every organisation, a number of people retire every year. A new batch of graduates with specialization turns out every year and this will affect the existing workforce.
Shortage of Skill due to Labour Turnover
The accuracy in human resource planning may reduce the cases of high labour turnover rate but if some error is there in the process, it will affect the organisation badly.
Workers from different countries and different cultural background travel to other countries in search of a job. It is very important for organisations to consider all these things when they are planning about human resources.
Human Resource Planning Process
Human Resource Planning is a process whereby organizations forecast the future personnel needs required to meet business and customer demands.
Human Resource Planning Process usually consists of the following steps:
- Forecasting Manpower Need
- Assessing Current Manpower Inventory
- Identifying Manpower Gap
- Formulating Manpower Plan
Forecasting Manpower Need
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.
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 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 an 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. To do this there are plans charted out to recruit the right people. After recruitment, the selection process is also professionally designed.
- 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. Example: voluntary retirement schemes to the employees, laying off the redundant staff etc.
Barriers to Human Resource Planning
Planners face significant barriers while formulating an HRP. The major ones are the following:
- People always question the importance of making HR practices future-oriented. For this, the role assigned to HR practitioners in the formulation of organisational strategies.
Their argument is simple; there are people when needed. The organisation offer an attractive package of benefits to them to quit when you find them in surplus.
- HR practitioners are perceived as experts in handling personnel matter i.e. complete planning of human resources but are not experts in managing a business.
The personnel plan conceived and formulated by the HR practitioners when involved with the organisational plan might make the overall strategic plan itself defective.
- HR information provided often is incompatible with the information used in strategy formulation. The strategic planning efforts have long been oriented towards financial forecasting often to the exclusion of other types of information.
- There are high chances of conflict may exist between short-term and long-term HR needs say for example, there arises a conflict between the pressure to get work done on time and long-term needs, such as preparing people for assuming greater responsibilities.
- There is a conflict between a quantitative and qualitative approach to HRP because some people view HRP as a number game designed to track the flow of people across the departments. These people will follow a strictly quantitative approach to planning.
Others take a qualitative approach and focus on individual employee concerns such as promotability and career development aspects but best results would accrue if there is a balance between the quantitative and qualitative approaches.
- Non-involvement of operating managers renders HRP ineffective and it is not strictly an HR department function. Successful planning needs a co-coordinated effort on the part of operating managers and HR personnel.
Human Resource Planning is a process that forecasts the company’s future manpower demand by analyzing the current supply and the gaps if any.
The process of human resource planning starts with forecasting manpower
needs, assessing the current manpower supply, identifying the gap between
the two and then formulating and implementing the plans to fill the gap.
- Walker J.W. (1992) Human Resource Planning, 1990s Style. In: Schweiger D.M., Papenfuß K. (eds) Human Resource Planning. Gabler Verlag
- P.Reilly, “Human Resource Planning”, The Institute of Employment Studies, London 1997
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