Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph.

No: 0820 25342 Email: doc.office@manipal.edu

 Introduction

▪ Definition : HRP is the process of getting the right number of qualified people into the
right job at the right time who are capable of effectively and efficiently performing their
task so that the organization can meet its objectives
▪ HRP is a forward looking function and is a sub system in the organizational planning
▪ It is an integral plan of the overall corporate plan and reflects the broad thinking of
management about manpower needs within the organization
▪ HRP seeks to make the links between strategies , structure and people more explicitly.
▪ It is prepared for varying time periods, ie. Short term plans covering a time frame of 1
or 2 years and long term plans for a period of 5 or more years

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Why Human Resource Planning ?

▪ Improper planning may lead to over staffing which increases direct cost –salary , cost
of training , amenities and others
▪ Under staffing affects production, morale and productivity of the organization
▪ HRP provides information about the manner in which existing personnel are employed,
the kind of skills required for different categories of job
▪ It gives the lead time available to select and train the required manpower

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Objectives of HRP
▪ Forecast personnel requirements – to determine the future manpower needs in an
organization.
▪ Cope with changes- It is required to cope with changes in market conditions ,
technology ,products and government regulations in an effective way.
▪ Use existing manpower productively – by keeping an inventory of existing personnel
by skill level, training , experience , it will be possible to utilize the existing resources
more usefully.
▪ Promote employees in a systematic manner – HRP provides useful information on the
basis of which management decides on the promotion of eligible employees in the
organization

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Importance of HRP

▪ Reservoir of talent- people with requisite skills are readily available to carry out the
assigned tasks
▪ Prepare people for future- people can be trained, motivated and developed in advance
and this helps in meeting future needs for high quality employees
▪ Expand operations - if the organization wants to expand its scale of operations, it can
go ahead easily.
▪ Cut costs- planning facilitates the preparation of an appropriate HR budget for each
dept
▪ Succession planning- HRP prepares people for future challenges. The ‘stars’ can then
be picked up and kept ready for further promotions whenever they arise

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Steps in the HRP process
1. Forecasting the Demand for Human Resources
- Most firms estimate the nos of employees they require in future. The demand for human
talent at various levels is primarily due to the following factors
a) External Challenges- systematic monitoring of external factors influencing the
organization
- Economic factors, including general and regional conditions
- Political , legal, social and technological changes
- Competition
b) Organizational Objectives and Policies
- Organization's strategic plans, sales, productions forecasts and new ventures must be
taken into account
Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
Reason for Demand forecast are
i) Quantify the job necessary for producing given number of goods or a given amount
services
ii) Determine what staff mix is desirable for future
iii) Prevent shortage of people where and when they are needed most
iv) Assesse appropriate staffing levels in different units of the organization
Forecasting Techniques : Organizations generally follow more than one technique. The
techniques are
v) Managerial judgement iv) Work study techniques
vi) Ratio-trend analysis v) Delphi techniques
vii) Regression analysis
Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
i. Managerial Judgment
- Managers/supervisors who are well acquainted with work load ,efficiency and ability of
employees collectively discuss and arrive at a figure and this number which would be the
future demand for employees
- This technique may involve bottom-up or to-down approach
- Combination of the two approach (participative) could yield positive results
ii. Ratio-trend Analysis
- Quickest forecasting technique
- It involves studying the past ratios (say between number of workers and sales in the
organization ) and forecasting future ratios making some allowance for changes in the
organization or its methods
Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
iii. Regression Analysis on leading indicators
- Leading indicators are an important criteria that can actually cause human resource
demand
- Regression analysis looks at the past statistic relationship between leading indicators and
staffing levels in different jobs
- If a strong relationship is found then a relationship is assumed
- Forecast on these leading indicators are then entered into the regression equation to
derive forecast for human resources
- Drawback of these methods is that they are only strategic if strategy is stable, which
often not the case.

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
iv. Work study Technique(work load analysis)
- It is used when it is possible to apply work measurement to calculate the length of operations and
amount of labor required.
Eg: the production budget is prepared in terms of volumes of saleable products for the company.
The standard hours per unit of output is identified.
1. Planned output for the year ------------------------- 20,000 units
2. Standard hours per unit ---------------------------5
3. Planned hours for the year ( 1x2)—------------------1,00,000
4. Productive hours per man/year
( allowing normal overtime, absenteeism and idle time )--- 2,000
5. Number of direct workers required (3/4) ---------------------------50
Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
v. Delphi Technique
- Estimates the personal needs from a group of experts
- HRP personnel act as intermediaries , summarize the various responses and report back
the findings back to the experts
- Summaries and surveys are repeated until the experts opinion begin to agree
- The agreement reached is the forecast of personnel needs .
- Drawback of this technique is the absence of interaction among experts

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
2.Preparing Manpower Inventory (Supply Forecasting )
Basic purpose of preparing supply forecasting is to find out the size and quality of personnel
available within the organization to man various positions.
Reason for supply forecast are
i) Helps quantify number of people and positions expected to be available in future to help
organization realize its plans and meet its objectives
ii) Assess existing staffing levels in different parts of the organization
iii) Helps clarify staff mixes that will exist in the future
Every Organization will have two major sources of supply of manpower
1. Internal labour supply 2. External labour supply

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
Internal labour supply
▪ Employee database is maintained by the HR which provides important details of each
employee
▪ These details helps the HR’s to assess the internal movement of employees ( transfer,
promotion , retirement ) well in advance.
▪ Frequent HR audits also helps in assessing the internal labour supply
▪ Other techniques that are generally used for assessing the internal labour supply are

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 1. Staffing Table/ Inflows & Outflows: It shows the number of employees in each job. The
table provides the detail whether the current employees are properly utilized or not .
Sources of inflows No.of ppl Sources of Outflows No.of ppl
Transfers in 12 Resignations 13
Promotions in 10 Current Retirement 3
Staffing level Termination 4
22 250 Death 1
21
Current staffing level –outflows+ inflows = Firms Internal supply for next year
250-21+22=251

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
2. Markov Analysis:
▪ This techniques uses historical rates of promotions , transfer and turnover to estimate
future availabilities in the workforce
▪ Based on past probabilities , one can estimate the number of employees who will be in
various positions with the organization in future
3.Replacement Chart:
▪ The chart shows the profile of job holders department wise and offers a snapshot of who
will replace whom if there is a job opening

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
4. Skill Inventory :
▪ Skill inventory is the assessment of the knowledge , skills, abilities , experience and
career aspirations of each of the current employees
▪ This record is updated once in 2 years with changes such as new skill, additional
qualifications and others
▪ Such record helps the management to quickly match forthcoming job openings

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
External labour supply
▪ When organization is growing rapidly ,diversifies into new area of operations or when it
cannot find potential employee internally to fill in the vacancies , it has to look into
outside sources
▪ If Organizations can anticipate the outside recruitments needs and its possible sources of
supply , its problem in finding the right personnel with appropriate skills at the right
time would be easier.

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
3. Determining Manpower Gaps
▪ The Existing number of personnel and their skills are compared with forecasted
manpower needs (demand forecasting )
▪ A reconciliation of demand and supply forecast will give us the number of people to be
recruited or made redundant as the case may be.
4. Formulating HR Plans
▪ The HR requirement identified along the procedure need to converted to a concrete HR
plan, along with detailed policies , programs and strategies

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
These plans will include
1. Recruitment plan- will indicate the number and type of people to recruited and when
they are needed
2. Redeployment plan – will indicate the programs for transferring or retraining existing
employees for new jobs
3. Redundancy plan –will indicate who is redundant , when and where, the plans for
retraining them
4. Training plan- will indicate training or retraining plan for existing employees and the
number of trainees or apprentices required

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
5. Productivity plan-will indicate reasons for employee productivity or reducing employee
costs through work simplification, mechanization, incentive and profit sharing schemes and
the like.
6.Retention plan – will indicate the reasons for employee turnover and strategies to avoid
through compensation policies and changes in the work culture
7.Control points – the entire manpower plan can be subjected to close monitoring from time
to time and control points can be set up to find out deficiencies and periodic updating of
manpower inventory to remove these deficiencies and develop future plans.

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Responsibility for HRP

▪ Top management are most responsible for the HR planning and it is one of the most
important success factors for the organization
▪ Though prepared by the HR department in consultation with the corporate heads , the
responsibility and accountability for manpower aspects is on the respective heads of the
divisions.
▪ The HR dept must offer counsel and advice to various divisional heads and coordinate
the various manpower estimates from time to time
▪ The HR dept can also assist and counsel operating managers to plan and set their
objectives .
▪ HR dept can monitor and measure the dept’s performance against the plan and inform
top management about it
Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Problems in HRP

▪ Accuracy- projecting manpower needs over a period of time is risky. Factors such as
absenteeism, employee turnover, seasonal trends in demand and other factors may turn
the best of manpower plans to an obsolete piece.
▪ Support- planning is generally undertaken to improve overall efficiency and support
from management is important . If they are unwilling to commit for the overall
improvement of the HR plans , the entire exercise will be waste
▪ Numbers game- HRP, in the final analysis may suffer due to an excessive focus on the
quantitative aspects . The quality side consisting of employee motivation, career
prospects, morale may be discounted thoroughly.

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu
 Effective HRP

Below guidelines to be followed for effective HRP

1. Objective –the HR plan must fit with overall objectives of the organization
2. Top Management support- the plan must meet changing needs of the organization and
should enjoy consistent support from the top management
3. Employee skill inventory – Organizations must have an up to date employee skills
inventory .
4. Human resource information system- to manage employee skills inventories ,
organizations should maintain computerized HRIS
5. Coordination- HR planning division can be created to create HRP exercises .

Department of Commerce, New Management Block, MAHE, Manipal, 576 104, Karnataka, India, Ph. No: 0820 25342 Email: doc.office@manipal.edu