Top 5 Steps Involved in Human Resource Planning Process

1. Analysis of Organisational Plans and Objectives:

Human resource planning is a part of overall plan of organisation. Human resource planning process
begins with the analysis of overall plan of the organisation into departmental, sectional and sub-
sectional plans and functional plans like sales, marketing, technological plans. This break up of overall
plan provides for assessing the human resource requirement for each department and activity. Besides
analyzing the organisational plans, the objectives of the organisation are also analyzed.

If the objective of the organisation is speedy growth and expansion, it requires more manpower in all
functional activities and departments to meet the challenges of increased market share, finances, size of
assets, new markets, inventory, and new products. The new growth strategy of the organisation
requires large number of skilled manpower. The human resource department needs to go for quick
recruitment and training to meet the human resource requirement of the organisation.

In case the organisation facing tough times of falling demand for its products has to curtail production
thereby needs to reduce manpower. The human resource department has to take some harsh decisions
to retrench the existing manpower. In modern corporate world mergers and acquisitions pose fresh
challenge to human resource department.

The human resource department has to face tough time because of conflicting corporate culture and
working environment of the two or more firms coming together in the event of merger or acquisition.
Human resource department has to formulate plans for lying off or hiring and amalgamation of
conflicting cultural working environment. Sometimes the decisions regarding wage cuts have to be
taken. This will displease the employees paving the way for labour unrest.

2. Analysis of Human Resource Planning Objectives:

Human resource planning is a part of corporate plan. Its objectives are to be fixed in the light of
corporate objectives. The emphasis is given on future requirements than the present one. The main
purpose of human resource planning is to match the present and future manpower needs of the
organisation.

The human resource department should specify the policy regarding acquisition of human resources. It
may recruit them by way of promotion; transfer i.e. from within the organisation or from external
source. It also has to clarify the selection criteria and the need for training and development.

It has to decide on abolishing or continuing some old and routine jobs or replace them by meaningful
new jobs to meet challenges thrown by the speedily changing business and industrial environment.
These objectives should be integrated with the objectives of all the functional areas of the organisation.
The emphasis should also be given on to maximize the return on investment in human resources.

3. Forecasting for Human Resource Requirement:

The correct forecasting for required human resources for the organisation becomes simple if design and
structure of the jobs examined thoroughly keeping in view the skills, potentialities and knowledge
required to perform them and make an estimate for the future requirements. It should not be taken for
granted that the design and structure of the existing jobs are perfect and cannot be changed overtime.
The recent development in technology and use of computers and robots in manufacturing has changed
the scenario.

Now the computer aided designs (CAD) and computer aided manufacturing (CAM) has entered in
ousting the traditionally used old methods. This has changed the design of jobs altogether. In modem
times welding and other related jobs are done by robots.

The point is the need of capabilities, skills, knowledge, potentialities in the employees present and
future must be reviewed. It will change the human resource planning. The improved techniques have
not only upgraded the quality of the product but also have brought about restructuring of jobs design.
The new jobs design requires more people with the knowledge of computer, engineering and other
technology. There is, therefore, a growing demand for engineers and technocrats with management
background by the companies.

The other factors dominating the forecast for human resources are the following:

(a) Expansion of the enterprise,

(b) Mergers and acquisitions,

(c) Retirement, death, resignation and terminations,

(d) Change in style of leadership,

(e) Improvement in productivity.

The above factors dominate the quality and quantity of the human resources. The various skills required
to perform the jobs will enable the forecasting of human resource requirement for the organisation.
Determining the skill needs and fulfilling them is vital aspect of human resource planning. The demand
for human resources is forecasted by using some statistical and work study methods and managers
opinions regarding the manpower requirements for their respective departments. This is how the
forecasting of demand for quality and quantity of human resources for the whole organisation is made.

4. Assessment of Supply of Human Resources:

To make assessment of supply of human resources for the organisation it should begin with the current
human resource inventory of the organisation. It is also known as auditing of human resource to be
undertaken by the departments of the organisation where complete information regarding skills,
abilities, qualifications, capacity for hard work is available and so also the quantity and quality of human
resources manning various positions, the probable retirements.
On the basis of this information they can determine the supply of manpower which is sufficient enough
to meet the departmental need or in excess or in short supply. This can be quantitatively and
qualitatively worked out. The sum total of supplies of all departments shall equal the organisations
supply of human resources. In this way the current or present human resource inventory is accounted
for.

The supply of human resources may be less because of layoffs, dismissals, voluntary retirements,
retirements, deaths etc. If the supply is less than the demand for or is inadequate to meet the
requirement for human resources then it can be fulfilled through external sources. The graduates from
educational institutions serve the purpose.

Also the existing manpower be asked to work extra and overtime wages may be paid to them. This is
purely ad hoc arrangement. After some time the organisation has to hire the required number and kind
of people to meet the need.

5. Matching Demand and Supply:

It is one of the objectives of human resource planning to assess the demand for and supply of human
resources and match both to know shortages and surpluses on both the side in kind and in number. This
will enable the human resource department to know overstaffing or understaffing. In case of shortages
of human resources to meet certain jobs in the organisation and are not available in the labour market
then under such circumstances it is advisable to change the objectives of the organisation.

In case of shortages the human resource department should be in touch with all the known sources to
meet the requirement. The human resource manager may recommend the retention plan for the
employees such as higher pay, improvement in work life or to grant extension to those employees are
on the verge of retirement. In case of surplus human resources in some departments then the scheme
for redeployment in other departments or other job may be recommended.

If the surpluses could not be absorbed in any of the departments or jobs then in consultation with the
employee’s union retrenchment may be undertaken giving them full benefits under the law. A promise
may be given to the retrenched employees for help to get job elsewhere or whenever vacancies exist
they will be preferred. Human resource planning must get a support from the organisation with relevant
personnel policy statement. The human resource plan becomes an action plan for the organisation as
regards manpower requirement.

The organisation must follow the human resource philosophy as a guiding principle. Career planning
must be kept in view while planning for human resources. Any individual who joins the organisation has
a long way to go. During his long span he aspires high and wants that his talent should get recognition by
way of further promotion on high level and should be rewarded monetarily. This is especially important
for those who are professionals joining vocations. Thus an organisation gets professionals or experts in
particular field. It is because of this certain people are becoming professional. The career planning is a
part of human resource development.
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