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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 Objectives of Human Resource Planning
- 4 Human Resource Planning Process
- 5 Summary
- 6 Reference
Human Resource Planning Definition
Human Resource planning is the process- including forecasting, developing and controlling- by which a firm ensures that it has the right number of people and the right kind of people at the right places at the right time doing work for which they are economically most useful.
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
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 work on ensuring regular promotions to competent people on a justifiable basis.
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
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 surplus in the staff. In such a case staff is underutilized and there is a need of trimming the labour force. Example: voluntary retirement schemes to the employees, laying off the redundant staff etc.
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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