MODULE 2 - HUMAN RESOURCE PLANNING

Lesson Presentation:
This topic explains the importance of human resource planning, how organizations
assess the future supply, and demand for human resources, how to determine the
numbers and types of employees be recruited into the organizations.

Human resource planning is the

responsibility of all mangers. It focuses
on the demand and supply of labor and
involves the acquisition, development,
and departure of people. This is
recognized as a vital HR function as
the success of an organization
depends on its employees.
The purpose of HR planning is to ensure that a predetermined number of
persons with the correct skills are available at a specified time in the future. Thus HR
planning systematically identifies what must be done to guarantee the availability of
the human resources needed by an organization to meet its strategic business
objectives. Effective HR planning considers both the internal and external
environmental influences of an organization, its objectives, culture, structure, and
human resource management.

What is Human Resource Planning?

Human Resource Planning – a process by which the management

ensures the right number of people and right kind of people, at the right place, at the
right time doing the right things for which they are recruited and placed for the
achievement of goals of the organization.

Approaches to Human Resource Planning

To forecast the organization’s future HR requirements and determine where
they will be obtained. Three sets of forecasts are required:
  a forecast of the demand for human resources – this involves an
examination of the internal and external labor supply

Forecasting human resource demand is the process of estimating the future human
resource requirement of right quality and right number. As discussed earlier, potential
human resource requirement is to be estimated keeping in view the organisation's
plans over a given period of time. Analysis of employment trends; replacement needs
of employees due to death, resignations, retirement termination; productivity of
employees; growth and expansion of organisation; absenteeism and labour turnover
are the relevant factors for human resourced forecasting. Demand forecasting is
affected by a number of external and internal factors

 a forecast of the supply of external human resources – the techniques

used for forecasting the internal supply of personnel include turnover analysis,
skill inventories, and succession planning

Human Resource supply forecasting is the process of estimating availability of human

resource followed after demand for testing of human resource. For forecasting supply of
human resource we need to consider internal and external supply. Internal supply of human
resource available by way of transfers, promotions, retired employees & recall of laid-off
employees, etc. Source of external supply of human resource is availability of labour force in
the market and new recruitment.
External supply of human resource depends on some factors mentioned below.

 Supply and demand of jobs.

 literacy rate of nation.
 rate of population
 industry and expected growth rate and levels
 technological development.
 compensation system based on education, experience, skill and age

 a forecast of the supply of human resources available within the

organization - not all vacancies can be filled from within the organization.

Two approaches used in forecasting the demand for human resources are:
- Quantitative approach - this approach uses statistical and mathematical
 techniques. The focus of this approach is on forecasting HR shortages,
surpluses and it aims to reconcile the supply and demand for human
resources given the organization’s objectives
Quantitative Approach. Is concerned with determining the number of
employees required in a future period of time. Uses of statistical or
mathematicaltechniques which will be useful in estimating the quantity of man
power

- Qualitative approach – this approach uses expert opinion ( usually a line

manager ) to predict the future. The focus is on evaluations of employee
performance and probability as well as management

Manpower Forecasting
- is the first step of the entire manpower planning activity.
The manpower planner foresees the demand and supply of different types
of manpower resources in the firm. The basic idea is to look into in which
department; unit or level there is a shortage or surplus of human requirements.

Four Basic Terms of Manpower Forecasting

1. Long Term Trend - long term forecasting is usually done for five years or more
depending on the company operations and customer demands.
2. Cyclical Variations - this refers to the reasonable and predictable movement that
occurs over one year or more.
3. Seasonal Variations - this is a reasonable prediction change over one year. This
covers firms who manufacture seasonal products and hire temporary workers for a
temporary increase in demand like Christmas and other special occasions.
4. Random Variations - this is one occasion where there is no special pattern and it
is quite difficult to predict or determine.
1. Determining the objectives of Human Resource Planning
- the objective for which the manpower planning is to be done should be
defined precisely, to ensure that the right number of people for the right kind of
job is selected.
2. Analyzing Current Manpower Inventory
- the next step is to analyze the current manpower supply in the
organization through the stored information about the employees in terms of
their experience, skills, proficiency, etc. required to perform a particular job.
3. Forecasting Demand and Supply of Human Resources
- here the required skills of personnel for a particular job are matched
with the job description and specification.
4. Analyzing the Manpower Gaps
- in case the demand is more than the supply of human resources, that
means there is a deficit, and thus new candidates are to be hired. Whereas, if
the demand is less than supply, there arises a surplus in the human resources,
and hence, the employees have to be removed either in the form of
termination, retirement, layoff, transfer, etc.
5. Employee Plan - this plan is to be formulated accordingly.
6. Training and Development
- the training programs are conducted to equip the new employees as
well as the old ones with the requisite skills to be performed on a particular job.

7. Appraisal manpower Planning

- here the human resource plan is compared with its actual
implementation to ensure the availability of many employees for several jobs. The
firm has to decide the success of the plan and control the deficiencies if any.

GENERALIZATION
HR planning must be conducted for more effective and efficient use of human
resources. It helps in scheduling recruitment and selecting effectively by providing
information that determines how many people are needed and the kinds of people
needed for job openings. Through the HR planning process, the organization can
identify the mix of skills it will need in the future.

reference :

https://businessjargons.com/human-resource-planning-process.html
https://www.academia.edu/9211771/Human_Resource_Management_Lecture_Notes