Human Resource Planning

Robert L. Mathis  John H. Jackson

 Human Resource Planning

 Human Resource (HR) Planning

– The process of analyzing and identifying the need for
and availability of human resources so that the
organization can meet its objectives.
 HR Planning Responsibilities
– Top HR executive and subordinates gather information
from other managers to use in the development of HR
projections for top management to use in strategic
planning and setting organizational goals

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 Benefits of HR Planning

 Better view of the HR dimensions of business

decisions
 Lower HR costs through better HR management.
 More timely recruitment for anticipate HR needs
 More inclusion of protected groups through planned
increases in workforce diversity.
 Better development of managerial talent

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Human Resource Planning

• Through HR planning, an
organization is able to generate a
list of future human resource needs
and a plan for meeting them.
• To derive HR needs, the
organization must forecast its
demand and supply.
Human Resource Planning (Cont.)

• Demand forecasting involves predicting the number and

types of people the organization will need at some future
point in time.
• Supply forecasting involves estimating which organizational
positions are expected to be already filled.

Demand Supply HR
Forecast Forecast Needs
 Model of HR Forecasting

FORECASTING DEMAND

Considerations Techniques BALANCING

• Product/service demand • Trend analysis SUPPLY AND DEMAND
• Technology • Managerial estimates
• Financial resources • Delphi technique
• Absenteeism/turnover (Shortage)
• Organizational growth Recruitment
• Management philosophy • Full-time
• Part-time
• Recalls
Techniques External Considerations
• Staffing tables • Demographic changes (Surplus) Reductions
• Markov analysis • Education of the workforce • Layoffs
• Skills inventories • Labor mobility • Terminations
• Management inventories • Government policies • Demotions
• Replacement charts • Unemployment rate • Retirements
• Succession planning

FORECASTING SUPPLY

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 Demand Forecasting Methods

 Delphi Method

 Staffing Table Approach

 Regression Analysis

 Time Series Analysis

 Supply Forecasting Methods

 Skills Inventory

 Replacement Charts

 Succession Planning

 Flow Modeling/Markov Analysis

Forecasting Demand for Employees

Quantitative Methods

Forecasting Demand

Qualitative Methods

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 Quantitative Approach: Trend Analysis

 Forecasting labor demand based on an

organizational index such as sales:
1. Select a business factor that best predicts human
resources needs.
2. Plot the business factor in relation to the number of
employees to determine the labor productivity ratio.
3. Compute the productivity ratio for the past five
years.
4. Calculate human resources demand by multiplying
the business factor by the productivity ratio.
5. Project human resources demand out to the target
year(s).
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 Qualitative Approaches

 Management Forecasts
– The opinions (judgments) of supervisors,
department managers, experts, or others
knowledgeable about the organization’s future
employment needs.
 Delphi Technique
– An attempt to decrease the subjectivity of forecasts
by soliciting and summarizing the judgments of a
preselected group of individuals.
– The final forecast represents a composite group
judgment.

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 Forecasting the Supply of Employees:
Internal Labor Supply

 Staffing Tables
 Markov Analysis
 Skill Inventories
 Replacement Charts
 Succession Planning

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 Forecasting Internal Labor Supply

 Staffing Tables
– Graphic representations of all organizational jobs,
along with the numbers of employees currently
occupying those jobs and future (monthly or yearly)
employment requirements.
 Markov Analysis
– A method for tracking the pattern of employee
movements through various jobs.

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 Internal Demand Forecasting Tools

 Skill Inventories
– Files of personnel education, experience, interests,
skills, etc., that allow managers to quickly match
job openings with employee backgrounds.
 Replacement Charts
– Listings of current jobholders and persons who are
potential replacements if an opening occurs.
 Succession Planning
– The process of identifying, developing, and tracking
key individuals for executive positions.

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Outcomes of the HR Planning Process
Dealing with an Undersupply/Oversupply of Employees