ACQUIRING HUMAN

RESOURCES

HUMAN RESOURCE
PLANNING

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 Human Resource Planning
 “An effort to anticipate future business
and environmental demands upon
and organization and to provide
personnel to fulfill that business and
satisfy that demand”

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 HUMAN RESOURCE PLANNING
 Definition: It is the process by which management
determines how an organisation should move from its
current manpower position to its desired manpower
position. Through it management strives to have the
right number and the right kind of people at the right
places, at the right time, doing things which result in
both the organisation, and the individual receiving,
maximum long-rang benefit”

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Purpose of HR Planning

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 Strategic Planning

The process by which top

management determines overall
organizational purposes and
objectives and how they are to be
achieved.

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Strategic Importance

 Human resources management (HRM): the

philosophies, policies, and practices that an
organization uses to affect the behaviors of
people who work for the organization

 Strategic use of HRM activities can improve

organizational effectiveness

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 Objectives of HRP
 To ensure optimum use of  To estimate cost of Hr and
existing HR Housing needs of
 To forecast future Employees
requirements for HR  To provide a basis for
 To provide control MDP
measures  To facilitate productivity
Bargaining
 To link HRP with
Organizational Planning  To meet the needs of
Expansion and
 To determine levels of Diversification
Recruitment and Training programmes
 To assess shortage and
surplus of Hr
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 Need and Importance of HRP
 To carry on its work  HRP is useful in
and to achieve its anticipating Cost of HR
objectives which facilitates
 HRP identifies gaps budgeting easier
 There is need to  HRP facilitates Career
replace employees and succession
 HRP facilitates planning
expansion and growth  HRP helps in planning
 HRP helpful in effective for physical facilities like
utilization of canteen staff quarters
etc
HR and Technology

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 Why HRP gained so much
focus in recent times…
 Employment  Lead time
situation  Hiring costs
 Technological
 Increased Mobility
Changes
 Organizational  Shortage of Skills
Changes  Legislative Controls
 Demographic  Pressure Groups
Changes  Systems Concepts
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 Human Resource Planning

Assessing Future
Assessing Current
Human Resource
Human Resources
Needs

Developing a
Program to Meet
Needs

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Human Resource Planning

Strategic
Strategic
Formulation
Implementation

SWOT tells us Deploying human

how well our capital is one of
workforce is ‘musts’ of strategic
deployed implementation

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HR PLANNING PROCESS

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 Scanning the External
Environment
 Environmental Scanning
 The process of studying the environment of the
organization to pinpoint opportunities and threats.
 Environment Changes Impacting HR
 Governmental regulations
 Economic conditions
 Geographic and competitive concerns
 Workforce composition

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 Internal Assessment of the
Organizational Workforce

 Auditing Jobs and Skills

 What jobs exist now?
 How many individuals are performing each
job?
 How essential is each job?
 What jobs will be needed to implement
future organizational strategies?

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 Process of HRP

1. Analyzing Organizational Plans

2. Forecasting Demand for HR
3. Forecasting supply of HR
4. Estimating Manpower Gaps
5. Action Planning
6. Monitoring and Control

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 The HRP Process
How many?
Strategic plans &
What quality?
Organizational design
Where?
Resultant
Labor Demand Forecasting

1. Current
Current supply (internal) supply
2. Surplus / shortage?
situation
(internal & external)

Staffing plans Implementation

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HRP Process

Organizational Objectives

HR Needs Forecast HR Supply Forecast

HR Programming

HRP Implementation

Control & Evaluation

Surplus - Restricted Hiring, Shortage - Recruitment &

Lay Off, VRS, Reduced Hours Selection
 Human Resource Planning Process
External Environment
Internal Environment
Strategic Planning

Human Resource Planning

Forecasting Comparing Forecasting

Human Requirements Human Resource
Resource Availability
Requirements and Availability

Demand = Surplus of Shortage of

Supply Workers Workers

No Action Restricted Hiring, Recruitment

Reduced Hours,
Early Retirement, Selection
Layoff, Downsizing

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 Demand for Labor

Strategy / Design

Primary demand for labor

Demand for X number of employees,

of certain types / quality, in
particular parts of organisation

Short term Long term

(static) demand (fluid) demand
Forecasting

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 Labour Supply

Current supply
Assess internal supply against
demand
Forecasted supply

Based on current supply,

is there a shortage / surplus?

Staffing plans

Shortage:
Surplus:
•Overtime
•Downsizing
•Outsourcing
•Transfers
•Retrained transfers
•Work sharing
•New hires
•Retirement
•Technological innovation
•Natural attrition
•Retraining 21
 Forecasting HR Supply and Demand
 Forecasting

The use of information from the

past and present to identify
expected future conditions.

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Forecasting HR Supply and Demand …

Forecasting Methods
Judgmental
 Estimates—asking managers’ opinions, top-down
or bottom-up
 Rules of thumb—using general guidelines
 Delphi technique—asking a group of experts
 Nominal groups—reaching a group consensus in
open discussion
 Ratio trend analysis
 Regression analysis
 Work study techniques
 Delphi technique
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Forecasting HR Supply and Demand

 Forecasting Periods

 Short-term—less than one year

 Intermediate—up to five years
 Long-range—more than five years

 Forecasting the Supply for Human Resources

 External Supply
 Internal Supply

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 Forecasting HR Supply and
Demand

 Forecasting the Demand for Human Resources

 Organization-wide estimate for total demand
 Unit breakdown for specific skill needs by number and
type of employee
 Develop decision rules (“fill rates”) for positions to
be filled internally and externally.
 Develop additional decision rules for positions
impacted by the chain effects of internal
promotions and transfers.

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 Forecasting HR Supply and
Demand
 Forecasting External HR Supply
 Factors affecting external

 Individuals entering and leaving the workforce

 Individuals graduating from schools and colleges
 Changing workforce composition and patterns
 Economic forecasts
 Technological developments and shifts
 Actions of competing employers
 Government regulations and pressures
 Other factors affecting the workforce

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 Managing Human Resource
Surplus or Shortage

 Workforce Reductions and the WARN Act

 Identifies employer requirements for layoff advance
notice.

 60-day notice to employees and the local

community before a layoff or facility closing
involving more than 50 people.
 Does not cover part-time or seasonal workers.
 Imposes fines for not following notification
procedure.

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 Managing Human Resource Surplus or Shortage

 Workforce Realignment
“Downsizing”, “Rightsizing”, and “Reduction in Force” (RIF) all
mean reducing the number of employees in an organization.

 Causes
 Economic - weak product demand, loss of market share to competitors
 Structural - technological change, mergers and acquisitions

 Positive consequences
Increase competitiveness
Increased productivity

 Negative consequences
Loss of specialized skills and experience
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Loss of growth and innovation skills
Managing Human Resource Surplus or Shortage

 Downsizing approaches

 Attrition and hiring freezes

 Not replacing departing employees and not hiring new employees.

 Early retirement buyouts

 Offering incentives that encourage senior employees to leave the
organization early.

 Layoffs
 Employees are placed on unpaid leave until called back to work
when business conditions improve.
 Employees are selected for layoff on the basis of their seniority or
performance or a combination of both. 29
 Assessing HR Effectiveness

 Diagnostic Measures of HR Effectiveness

 HR expense per employee

 Compensation as a percent of expenses
 HR department expense as a percent of total expenses
 Cost of hires
 Turnover rates
 Absenteeism rates
 Worker’s compensation per employee

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