Human Resource Planning

Process of forecasting a firms demand for and supply of

• the right type of people

• at the right time and
• in the right number
 Benefits of HRP
• Personnel costs may be less(anticipation)
• More time to provide/locate talent
• Better inclusivity achieved
• Better business decisions
• Resistance can be tackled
• International expansion can be facilitated
 Factors affecting HRP
1. Type and Strategy of the organisation

• Internal growth or growth through M&A

• Narrow or broad focus
• Informal or Formal plans
• Reactive or Proactive
• Flexible or inflexible
 …Factors affecting HRP

• 2. Organisational Growth Cycle and Planning

• 3. Environmental Uncertainties
 …Factors affecting HRP
4. Time Horizons: means:
Short Term Planning v/s Long Term Planning
• Many new Competitors v/s Strong competitive position
• Revolutionary changes v/s Evolutionary changes
• Stable demand patterns v/s erratic demand patterns
• Strong practices v/s Poor practices
 …Factors affecting HRP
5. HRIS : Type and Quality of information(about
customers/products/competition/geographical limits of the market etc)

6. Labour market
• Demographics of labour market
• Employability of people
• Demand in the country
• Technology

7.Outsourcing
 The Planning Process

• Environmental Scanning :PEST as well as Demographic Trends

• Organisational Objectives and Policies
• Demand Forecasting

• Supply Forecasting
 Forecasting Techniques
• 1. Managerial judgement ( Bottom –up or Top down)

• 2.Ratio Trend Analysis

• 3.Regression Analysis ( Y axis – employee size/ X axis –Sales)

 Forecasting Techniques
• 4. Work Study Technique

• Planned output for next year 20,000 units

• Standard hours /unit 5
• Planned hours for the year 100,000
• Productive hours per man/year 2000
• Number of workers required 3/4
 Forecasting Techniques
• 5.Delphi Technique

• 6. Flow Models

• 7. Mathematical Model
 Supply Forecast

• Internal Sources
• External Sources
• Existing HR
 Skills Inventory

• Personal Data
• Skills
• Sp. Qualifications
• Salary /Job History
• Company Data : retirement plan, benefits ,etc
• Individual capacity data like psychological test, health information,etc
• Special preferences like location, type of job, etc
 Management Inventory
• Work history
• Strengths/Weakness
• Promotion Potential and Career Goals/ retirement date
• Number and types of employees supervised
• Total Budget managed
• Previous duties and responsibilities
• Educational background ,etc
• Current Job performance/specializations
• Job and geographical preferences;Personal data;psychological assess.
 Internal Supply
• Inflows and Outflows

• Turnover Rate:
Number of separations in a year/Av number of employees in a year
x100

• Conditions of work and absenteeism:

Number of persons-days lost /Av number of persons x no. Of working
days x100
 …Internal Supply

• Productivity level

• Movement of jobs
 External supply
• New recruits
• Replenishing lost personnel propensity
• Organisational growth
 Strategies for Managing Shortages
• Recruit new permanent employees
• Incentivise retirement postponement
• Rehire retirees part time
• Reduce turnover
• Overtime
• Subcontract or temporary employees
• Redesign jobs so fewer employees are needed
 Strategies for Managing Surplus
• Hiring freeze
• No replacement
• Offer VRS
• Reduce work hours/ pay cuts/variable pay plan
• Leave of absence/layoff
• Reduce outsourced work
• Employee training
• Expansion
 Have Retention Plans
• Work on Compensation
• Good Performance Appraisal
• Prevent quitting due to Conflicts
• Improve Induction programs
• Training [L&D]
• Reduce Unstable recruits
 Downsizing Plan
• Who is to be made redundant and Why
• Plan for Redevelopment and Training
• Outplacement Services
• Consultations with Unions
• Clear policy for redundancies and redundancy payments
 HRP Process

• Organisational Objectives and Policies

• Demand and Supply forecast
• HR programming
• HRP Implementation
• Control and Evaluation

• Discuss: Requisites and Barriers for HRP