HR Planning (HRP) at Vybhav

As in most organisations, HRP at Vybhav Inc is an annual initiative. It formally begins six
months ahead of the start of the new year and is part of an integrated strategic exercise. At
the core of the HRP is the business plan. The process could last as long as 8–12 weeks and it
culminates with the departmental plans for all verticals and service functions. Each revenue
generating business unit at Vybhav does the necessary due diligence of collating market data
from global reports published by agencies like KPMG, Forrester, Gartner and other industry
and trade associations. Industry, country-specific, and product/market-specific data are also
collated. TheCentral Marketing Team too provides critical current-customer analyses as
inputs for the business plan. All the data are made available to the businesses through a
common portal. The planning exercise is carried out using a business planning tool called
‘BIZY’ where each department begins to provide revenue projections and the tool begins to
report costs, budgets, and resources that would be required to generate the targeted
revenue. As each team provides its data, the resources and goals/targets are likely to change
particularly when the teams discuss and exchange notes.

Let us take the example of the IT Division of Vybhav. If there is a sales projection made for
this Division of 550 millon for the coming year, and when this number is updated in BIZY, it
gets autoassigned to the seven different product verticals of the Division. When a particular
product vertical provides two release versions of the product being launched, one in July and
another in January, upon updating the sales revenue from this particular product with the
two version release date in BIZY, it reports back the number of units to sell; the marketing
budget needed to drive this; the average mandays of quality control required; and technical
support for servicing the increased sales projected. BIZY bases all its projections from the
analysis of data drawn from the past 10 years of data warehouse in the tool. BIZY’s
intelligence also comes from base data updated by the Global Corporate Strategy team prior
to the launch of the planning exercise. Of particular importance are such details as increasing
of trends, country-specific considerations, products planned to be phased out, decision to
launch new products and enter new markets.

BIZY allows Ramkumar, who heads the Banking Products Development Division, to review the
current team structure, and allocate the headcount increases necessary to reach his 20 million
mark in the next year. He can choose to add the headcount to the ‘Sr. Software Engineer’,
and ‘Architect’ roles as he foresees significant changes in the new versions of the products
proposed to be launched. Sarvana, who heads the quality control vertical at the IT Division,
decides to allocate 23 new employees uniformly across the teams using the current team
structure information that BIZY has provided to him.

The HR module on BIZY allows the HR director for the IT Division, Rohita Verma, to view the
teamwise employee headcount projection for each quarter and for each business vertical.
BIZY allows Rohita to update the attrition trends projected for the year ahead; the proposed
salary increments expected to add to employee cost post the annual review in April; any new
benefits/perquisites initiative that is planned and that could be linked to headcount and
similar relevant information. What Rohit gets as a report from BIZY is the staffing headcount
targets for each quarter and also the staffing budget that emanates. It also highlights the need
to hire additional personnel for the HR team if the hiring plan is significantly higher. Another
tab on the HR module allows her to view all the associated employee cost by quarter, cost of
compensation, benefits cost and cost of rewards/perks to the company that are projected.
The training and development tab on the HR module allows Rohita to view the training HR-
days that were provided for the existing employee base for the current year and what it
amounts to if the employee base increases. Rohita can edit the training HR-days to show
fewer HR-days if the intention is to retain the same training budget as the current year despite
the increased employee base.

Rohita can generate another report from BIZY that tells her the ratio of the HR to employee
base and highlight the need to add the headcount to the HR/staffing team/training resources,
so that she can plan the budget for the HR team of the IT Division.

Once all the business verticals do the first level of planning and freeze on the revenue and
operational plan for the coming year, BIZY is locked for edits. Gangaraman’s Business Planning
Division convenes the Business Planning Workshop which usually is a three-day off-site at a
remote location to which all of Gangaraman’s direct reports and their business managers are
invited along with the Finance and the HR Directors of the IT Division. Each leader presents
his or her rationale for the projections and this is debated indepth by all present with the
objective of ensuring that the projections are realistic, industry supported and is in sync with
the overall vision and goals of the IT Division. Changes, if any, are made to the projections.
This process normally takes two days, often beginning at 8 AM and ending at 12 in the night
and sometimes extending upto the wee hours. Day three is spent on identifying the
interdependencies and the impact on cost and human resources to understand the cost
structure for the revenue planned and the version 1.0 of the budgeted cost and estimated
revenue for the next year are frozen. Rohita would present the increase/decrease in
headcount for each team and share the HR budget for the year based on the projections made
during the earlier two days of the workshop. This is essentially the HRP for the year ahead.
Subsequent to this extensive exercise, there could be changes and modifications as teams
continue to interact and identify cost of resources/market/competitor information that could
change plans marginally. These changes are incorporated through specific meeting set up by
the concerned teams and closed by BIZY as the final numbers.

Ref: Ashwathappa, Human Resources Management Text and Cases