Human Resource Planning

• Human resource is the most important asset of an organisation.

Human resources planning is the important function. It ensures
the right type of people, in the right number, at the right time and
place, who are trained and motivated to do the right kind of work
at the right time, there is generally a shortage of suitable
persons.
• The enterprise will estimate its manpower requirements and then
find out the sources from which the needs will be met. If required
manpower is not available then the work will suffer. Developing
countries are suffering from the shortage of trained managers.
Job opportunities are available in these countries but properly
trained personnel are not available. These countries try to import
trained skill from other countries.
• Definition Human Resource Planning:
• According to E.W. Vetter, human resource planning is “the process
by which a management determines how an organisation should
make from its current manpower position to its desired manpower
position. Through planning a management strives to have the right
number and the right kind of people at the right places, at the right
time to do things which result in both the organisation and the
individual receiving the maximum long range benefit.”
• Dale S. Beach has defined it as “a process of determining and
assuring that the organisation will have an adequate number of
qualified persons available at the proper times, performing jobs
which meet the needs of the enterprise and which provide
satisfaction for the individuals involved.”
Factors affecting HRP
External factors :
• Level of Economic Development: Level of economic development
determines the level of human resource development in the country and
thereby the supply of human resources in the future in the country.
• International Factors: International factors like the demand and supply
of human resources in various countries also affect human resource
planning.
• Business Environment: Business environment means the internal and
external factors that influence the business. Business environmental
factors influence the volume of mix of production and thereby the supply
of human resources in the future in the country.
• Government Policies: Various policies of the government like labour
policy, industrial policy, policy towards reserving certain jobs for different
communities and sons-of-the-soil, etc., affect human resource planning.
• Level of Technology: Technology can be interpreted as the application
of knowledge to practical tasks which lead to new inventions and
discoveries. The invention of the latest technology determines the kind of
human resources required.
 • Business Environment: Business environment means the internal and external factors that
influence the business. Business environmental factors influence the volume of mix of
production and thereby the supply of human resources in the future in the country.
• Government Policies: Various policies of the government like labour policy, industrial
policy, policy towards reserving certain jobs for different communities and sons-of-the-
soil, etc., affect human resource planning.
• Level of Technology: Technology can be interpreted as the application of knowledge to
practical tasks which lead to new inventions and discoveries. The invention of the latest
technology determines the kind of human resources required.
• Internal Factors:
• Company Policies and Strategies: The organisation’s policies and strategies are related to
expansion, diversification, etc., determines the human resource demand in terms of quantity and
quality.
• Human Resource Policies: Human resource policies of the company are about the quality of
human resources, compensation level, quality of working conditions, etc., influence human resource
planning.
• Company’s Production and Operational Policy: Company’s policies regarding how much to
produce and how much to purchase from outside for manufacturing the final product influences the
number and kind of people required.
• Trade Unions : In case it is declared by the unions that they will not work for more than 8 hours in a day, it
affects the human resource planning. Therefore, influence of trade unions regarding the number of
working hours per week, recruitment sources, etc., affect human resource planning and is to be kept under
consideration.
• Organisational Growth Cycles: At the starting stage, the organisation is small as such it is but natural that
need of employees is usually smaller, however by the passage of time as the organisation enters the growth
phase more young people need to be hired. Likewise, in the declining/recession/downturn phase human
resource planning is done to retrench the employees.
• Job Analysis: Job analysis means detailed study of the job involving the skills needed for a particular job.
Human resource planning is based on job analysis which determines the kind of employees to be procured.
• Time Horizon: Company’s planning differs according to the competitive environment, i.e., companies with stable
competitive environment can plan for the long-run whereas firms without a stable environment can only plan for
short-term. As such short-term planning is adopted in the following cases. There are many competitors entering
business/when there is swift change in social and economic conditions of business/if there is constant change in
demand patterns/when there exists poor management practice, otherwise long term planning is adopted.
• Type and Quality of Information: Every planning process is in need of qualitative and accurate information
about the following organisational structure, capital budget, functional area objectives, level of technology being
used, job analysis, recruitment sources, retirement plans, compensation levels of employees, etc. Hence,
human resource planning is determined on the basis of the type and quality of information.
 HRP PROCESS
• The steps involved in the HRP process are as follows:
• 1. Organizational environment scanning
• 2. Formulation of organizational objectives and policies
• 3. Demand forecasting
• 4. Supply forecasting
• 5. HR Action plan
• 6. HRP implementation
• 7. HRP controlling and evaluation
1. Organizational Environment Scanning:

• Environmental scanning is the first step in the process of HRP. In order to have an HR
plan, the external environment which basically comprises economic factors, technological
factors, demo­graphic factors, socio-cultural, political factors and so on must be
thoroughly studied and closely monitored. It is essential to scan changes in the external
environment and align the business of the organisation and HR plans with the
environmental demands.
2. Formulation of Organizational Objectives and Policies:

• The effectiveness of HRP process is ensured only when human resource plans are formulated in
alignment with the organizational objectives and policies. In other words, it is necessary that the
objectives of the human resource plans should be derived from the organizational objectives. HRP
ensures that the availability of human resource is adequate in quality and quantity to accomplish
the organizational objectives.
3. Demand Forecasting:

• Demand forecasting is the process of predicting the demand of human resource in adequate
quality and quantity. The forecast should be based on available capital and long-term
organizational plans. Relevant external and internal factors must be considered while forecasting
human resource demand.
4. Supply Forecasting:

• Supply forecasting is the process of estimating the future supply of

human resource in specific quantity and quality that is likely to be
available from within and outside the organization. It reflects the
capability of the human resource department to procure the required
number of employees whenever needed. The supply forecasting
process estimates the future availability of the human resource by
considering absenteeism, internal movements, promotions, wastage,
and changes in work hours or other work conditions.
5. HR Action Plan:

• HR action plan holds a significant place in the HRP process. It is the fifth step that is performed
after forecasting the demand and supply of human resource for an organization. demand and
supply of human resource for an organization to identify the existing human resource gaps. HR
action provides the basis for preparing human resource plans by estimating the gap between the
demand and supply of human resource.
6. HRP Implementation:

• HRP implementation involves the execution of the human resource plans that have been
formulated during the HR action plan . The human resource plans are executed by performing
recruitment, selection, and placement; training and development; and retraining and
redeployment functions. It also involves the implementation of the retention, redundancy, and
succession plans.
7. HRP Controlling and Evaluation:

• HRP controlling and evaluation is the final step of the HRP process. In this step, human resource
plans are monitored and controlled to ensure their proper execution. Human resource plans
should be developed considering the budget, time limits, targets, and established standards. In
addition, these plans should clearly state who would bear the responsibilities for the
implementation, control, and evaluation of plans.