Human Resource Planning

Defining Human Resource Planning

❑HRP includes the estimation of how many qualified people are
necessary to carry out the assigned activities, how many people
will be available, and what, if anything has to b done to ensure
that personnel supply equals personnel demand at the
appropriate time in the future.

❑HRP is the process by which an organization ensures it has the

right number of people, at the right place, at the right time,
capable of effectively and efficiently completing those tasks that
will help the organization achieve its overall objectives. HRP
translates the organization’s objectives and plans into the
number of workers needed to meet those objectives. Without
clear-cut planning, estimation of an organization’s human
resources need is reduced to mere guesswork.
 To recruit and retain the human resources of
required quantity and quality.

To foresee the employee turnover and make

Objectives of arrangements for minimizing turnover and filling up
of consequent vacancies.
Human
Resource To meet the needs of the programmes of
expansion, diversification, etc.
Planning To foresee the impact of technology on work,
existing employees and future human resource
requirements.

To improve the standards, skills, knowledge,

ability, discipline, etc.
Objectives of HRP (Contd.)

To assess the surplus or shortage of human resources and take measures

accordingly.

To maintain congenial industrial relations by maintaining optimum level and

structure of human resources.

To minimize imbalances caused due to non-availability of human resources of

the right kind, right number, in the right time, at the right place.

To estimate the cost of human resources.

 ❑The shortage in certain categories of employees
and/or variety of skills despite the problem of
unemployment.
❑The rapid change in technology, marketing,
management, etc. and consequently the need for

Need for
new skills and new categories of employees.
❑The changes in organization design and structure
affecting manpower demand.

HRP ❑The demographic changes like the changing

profile of the workforce in terms of age, sex,
education, etc.
❑The government policies in respect of reservation,
child labour, working conditions, etc.
❑The labour laws affecting the demand for and
supply of labour.
❑Pressure from trade unions, political
forces, sons of the soils, displaced
persons, etc.
❑Introduction of computerization and
robotics.
❑The involvement of lead time in
manning the job with the most
Need for
suitable candidate.
HRP (contd.)
 ❑Helps determine Future Personnel Needs: surplus or
deficiency in staff strength is the result of the absence
of or defective planning.
❑Coping with Change: Enables an enterprise to cope
with the changes in competitive forces, market
conditions, technology, products and government
regulations. Such changes generate change in job

Importance content, skill demands and number and type of

personnel.
❑Attracting, Creating and Retaining a Pool of Qualified
of HRP and Skilled personnel.
❑Protection of Weaker Sections of Society – Such as
SC/ST candidates, Handicapped candidates, etc.
❑HRP serves as a Foundation for all other HR Functions.
❑HRP is Imperative in the Light of Increasing
Investments in Human Resources.
 ❑Protects (pre-plans) to Reduce the Adverse
Effects resulting from the Resistance to
Change and Move.
❑Other Miscellaneous Benefits:
❑Gives Top Management a Better View of
the HR Dimension of Business Decisions
❑Reduces Personnel Costs as
Importance Management can Anticipate HR
Imbalances before they become
Unmanageable and Prohibitively
of HRP(contd.)
Expensive
❑Gives More Time to Locate Talent
❑Gives Better Opportunity to include
Women and Minority Groups in Future
Growth Plans.
❑Better Planning of Assignments to
Develop Managers can be done.
❑Major and Successful Demands on Local
Labour Markets can be made
Factors Affecting HRP
External Factors Internal Factors
❑Government’s Policies ❑Corporate strategies of
❑Level of Economic the company.
Development including ❑Human Resource Policy of
future supply of human the Company.
resources. ❑Formal and Informal
❑Business Environment Groups
❑Level of Technology ❑Job Analysis
❑Natural Resources ❑Time Horizons
❑International Factors ❑Type and Quality of
Information
❑Company’s Production
and Operations Policy
❑Trade Unions
The Human Resource Planning Process
Organizational Objectives
and Policies

HR Needs HR Supply
Forecast Forecast

HR Programming

HR Programme
Implementation

Control and Evaluation

of Programme

Surplus Shortage
Restricted Hiring, Recruitment
Reduced Hours, and
VRS, Layoffs, etc. Selection
Methods of Forecasting HR Demand
Quantitative
Qualitative Methods
Methods
• The Expert Estimate • Trend Analysis and
• Delphi Technique Projection
• Nominal Group • Simple Long-run trend
Technique projection/analysis
• Averaging • Regression Analysis
• Sales Force Estimate • Simulation Models
• Managerial Judgment • Workload Analysis
• Unit-demand Forecasting • Markov Analysis
• Ratio Analysis
• Scatter Plot
• Computerized Systems
Forecasting Human Resource Supply
❑ Human resource supply forecasting measures the number of people likely to be
available from within and outside the organization, after making allowances for
absenteeism, internal movements and promotions, wastage and changes in work hours,
and other conditions of work.
❑ Through supply forecasting, an organization is able to estimate, the availability of
employees with the necessary KSAs. It also locates the sources of personnel suitable for
employment.
❑ It is more common for organizations to conduct a HR Demand/Needs forecast than a
Supply/Availability forecast. However, the following benefits accrue when organization
undertake detailed supply forecasts:
❑ helps quantify the number of people and positions expected to be available in the future to help
the organization realize its plans and meet its objectives,
❑ helps clarify probable staff mixes that will exist in the future,
❑ assess the existing staffing levels in different parts of the organization,
❑ prevent shortage of personnel where and when they are most needed, and
❑ monitors expected future compliance with legal requirements of job reservations.
Forecasting Human Resource Supply (contd.)
❑ Supply/Availability Analysis covers:
❑ Audit of Existing Human Resources
❑ Internal Sources of Supply and
❑ External Sources of Supply
HR Audit and Preparation of HR (Skills and Management)
Inventories
❑ Analysis of the current stock of personnel is greatly facilitated by HR audits. HR Audits
summarize each employee’s skills and abilities. The audits of non-managerial personnel
yield ‘skills inventories’, while those of managerial personnel yield ‘management
inventories’.
❑ Skills Inventories (may include):
1. Personal data – age, sex, marital status
2. Skills – education, job experience, training
3. Special qualifications – memberships in professional bodies, special achievements
4. Salary and job history – present and past salary, dates of pay raises, various jobs held
5. Company data – benefit plan data, retirement information, seniority
6. Capacity of individual – scores on psychological and other tests, health information
7. Special interests of individual – geographic location, type of job
HR Audit and Preparation of HR (Skills and Management)
Inventories
❑ Management Inventories (may include)
1. Work history
2. Strengths
3. Weaknesses – identification of specific training programmes needed to remove weaknesses.
4. Promotion potential
5. Career goals
6. Personal data
7. Number and types of employees supervised
8. Total budget managed
9. Previous management duties
10. Educational background
11. Current job performance
12. Field of specialization
13. Job preferences
14. Geographic preferences
15. Anticipated retirement date
16. Personal history – including psychological assessments
Estimating Internal Supply of Human Resources
❑ Internal supply of employees refers to the availability of employees within the
organization.
❑ Techniques generally used for the purpose of estimating internal HR supply
include:
❑ Flow Models (Inflows and Outflows)
❑ Replacement Charts –
❑ Turnover Rates
❑ Overtime and Absenteeism
❑ Productivity Level
❑ Movement Among Jobs
1. Inflows and Outflows:
Sources of No. of People Current Sources of No. of People
Inflows Personnel Outflows
Level
Resignations 13
Transfers in 12 Discharges 2
Promotions in 10 250 Demotions 4
Operators Retirements 10
Promotions 13
Total Inflows: 22 Total Outflows: 42
Current personnel level – Outflows + Inflows = Internal Supply of Operators
250 – 42 + 22 = 230
2. Replacement Chart
3. Turnover Rate
𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑺𝒆𝒑𝒂𝒓𝒂𝒕𝒊𝒐𝒏𝒔 𝒅𝒖𝒓𝒊𝒏𝒈 𝒕𝒉𝒆 𝒚𝒆𝒂𝒓
𝑻𝒖𝒓𝒏𝒐𝒆𝒗𝒓 𝑹𝒂𝒕𝒆 = × 100
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑬𝒎𝒑𝒍𝒐𝒚𝒆𝒆𝒔 𝒅𝒖𝒓𝒊𝒏𝒈 𝒕𝒉𝒆 𝒚𝒆𝒂𝒓

Example: A company wants to increase and hold skilled fitters at

200. During a year, 30 out of an average of 150 skilled fitters left
the company (i.e., 20% turnover) and this trend is to continue.
Extra fitters as per expansion plan (200 – 150) = 50
(+) Replacement for separations (20% of 150) = 30
80
 4.Overtime and Absenteeism
➢The overtime policies of an organization can also affect its HR
availability. When the organization allows overtime for its
employees, its future HR demands could be met through the
existing workforce working overtime.
➢Absenteeism (unauthorized leave) can influence the availability of
the availability of HR in the organization critically.
➢When absenteeism is well under control, it can help the
organization achieve production goals with the presently available
human resources. In contrast, the organization may require
additional employees if absenteeism is continuously high.
➢Mathematically, absenteeism may be calculated as:
𝑁𝑜. 𝑜𝑓 𝑝𝑒𝑟𝑠𝑜𝑛 − 𝑑𝑎𝑦𝑠 𝑙𝑜𝑠𝑡
× 100
𝐴𝑣𝑔. 𝑛𝑜. 𝑜𝑓 𝑝𝑒𝑟𝑠𝑜𝑛𝑠 × 𝑁𝑜. 𝑜𝑓 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦𝑠
5. Productivity Level
➢Any change in productivity would affect the number of persons
required per unit of output.
➢When productivity levels increase, they bring down the HR
requirements of the organization.
➢In such cases, the employees rendered surplus by production
increases are usually considered for other vacant positions.
The are retrained and transferred to other jobs.
➢For example: If the average productivity of each employee is
120 units per day and total employee strength in the
organization is 2,000. Gross production per person would be
2,40,000. If the productivity now increases to 130 units per
employee, the number of employees required to maintain the
existing gross production level would be 2,40,000/130 = 1,846.
The surplus 154 employees could now be used for fulfilling the
future HR demands of the organization.
6. Movement among jobs
➢Some jobs are sources of personnel for other jobs. For example
bank branch managers may be obtained from deputy branch
managers.
Human resource programmingng
Once an organization’s personnel demand and supply are
forecast, the two must be reconciled or balanced in order that
vacancies can be filled by the right people at the right time.
 Six key HR programmes:
• Hire resources to meet the needs of the organization’s plans.
Hire

• Train existing resources or train resources obtain trained resources to meet the
Train business need.

• Identify areas of surplus resources or redundant resources to re-skill them with new
Re-train skills that are required to meet business needs.

• Letting go of resources in accordance with organizational norms and industry

Retrench standards.

• No action to be taken by HR team to either hire or retrench in a structured manner. Ad

No Action hoc staffing needs from time to time might prevail.

• This activity might take place independent or as apart of the HRP process. Key positions
Succession and successors are identified and groomed to take on these responsibilities.
HR Plan Implementation
➢Implementation requires converting a HR plan into action.
➢A series of action programmes are initiated as a part of the HR
plan implementation.
➢Some such programmes are:

Recruitment , Retention plan

Training & Retraining and
selection and & Redundancy
Development Redeployment.
training Plan
Strategic HR Initiatives

Strategies for managing shortages Strategies for managing surpluses

• Recruit new and permanent employees • Hiring freeze
• Offer incentives to postpone retirements • Do not replace those who leave
• Rehire retirees part-time • Offer VR Schemes
• Attempt to reduce turnover • Reduce work hours
• Work current staff overtime • Leave of absence
• Subcontract work to another company • Layoffs
• Hire temporary employees • Reduce outsources work
• Redesign job process so that fewer • Employee training
employees are required • Switch to variable pay plan
• Expand operations.