HUMAN

RESOURCE
PLANNING
INTRODUCTION TO HRP
 Human resource planning refers to the estimation of the number and the type of people
needed during the ensuring period.
 HRP is significant as it helps to determine future personnel needs, ensures protection to
weaker section, acts as a basis for other personnel functions , helps overcome resistance to change .
 HRP is the process of formulating and ensuring the

 Right people
In
 Right job
At
 Right time
To
 Right place
MATCHING THE INVENTORY WITH FUTURE
REQUIREMENTS

 Strategies to deal with insufficient manpower

 Strategies to deal with surplus manpower

STRATEGIES TO DEAL WITH INSUFFICIENT MANPOWER

 Addition of New Hires

 Transfers

 Employment Training

 Management development programs

 Employee retention strategies

 STRATEGIES TO DEAL WITH SURPLUS MANPOWER

 Natural Attrition: It is defined as the separation of employees from an organization due to

resignation, retirement, etc

 Deployment: It is the process of giving strategic positions to employees /transferring the

employees to respective positions

 Retrenchment: An employee is said to be retrenched (permanently) when his/her job

becomes redundant and the employer either cannot offer the employee any alternative
position or any alternative position offered by the employer is not accepted by the employee

 Outplacement: It is an employee friendly strategy in which the organizations search for

other employment opportunities for their displaced employees and offer them assistance in
getting new jobs by helping in resumes and interviews
 STRATEGIES TO DEAL WITH SURPLUS
MANPOWER(CONTINUED)

 Lay-Offs: It is a method of reducing manpower (temporary or permanent) when the demand for the
organization’s products or services has gone down and the supply cannot be maintained at the
existing levels

 Leave without Pay: It is a method of temporary cost cutting in which employees have the option of
either coming back to the same organization after the leave period or looking for another job during
the leave period

 Loaning: During slack periods, the organizations can loan their managers for a specified period of
time to other organizations and the employees work on projects but continue on the rolls of their
parent organization

 Work sharing: It is a strategy in which two workers share the job and salary of one during slack
periods
 STRATEGIES TO DEAL WITH SURPLUS
MANPOWER(CONTINUED)
 Reduced Work hours: It is a strategy to avoid retrenchment/layoff in which the
workers agree to be paid less and put in fewer hours of work to avoid their
colleagues being retrenched

 Early/Voluntary retirement: It is a downsizing technique in which ageing

employees or those who are a few years away from retirement can opt for early
retirement and get additional retirement benefits

 Transfers: Horizontal movement or reassignment of an employee from one job to

another at the same level of organizational hierarchy but in a different place or unit
most probably with similar pay, status, duties and responsibilities
ASSESSING CURRENT HR AND MAKING AN
INVENTORY
 Job Analysis: It is the procedure of gathering information about a job. An
extensive job analysis provides the necessary inputs for assessment.

 HR inventory: An inventory of HR is compiled in terms of knowledge, skill set

and qualifications useful for T & D, Career planning and succession planning

 HR Information system(HRIS): HRIS and job analysis together provide clarity

regarding the current HR situation of an organization in terms of work and
resources available
HUMAN RESOURCE INFORMATION SYSTEM
HRIS is a software solution that maintains, manages, and processes detailed
employee information and human resources-related policies and procedures. It
enables easy storage and access of information regarding employees’ :
 Jobs
 Qualifications
 Competencies
 Compensation
 Training needs
 Leave Balance
 Day to day working
 FORECASTING
 Forecasting is used to determine the future human resource needs organization

 It analyzes the financial implications of any action taken in correlation with the
organizational objectives

 It has to take into consideration various other aspects like organization’s revenue position,
organizational objectives, market dynamics, job market, organizational culture,
technological environment

 The future needs have to be compared with current availability of HR

 Depending on whether there would be a deficit or a surplus in the future, action has to be
taken
 FORECASTING-NEED AND IMPORTANCE
 A proper and wise assessment of HR needs has to be made based on the strategic plans of the organization like
Changing the technology used in manufacturing
Planning an expansion
Planning a new project
Divest a business

 These future needs have to be compared with the current availability of resources

 Deciding on whether there would be a deficit or a surplus in the future, an action has to be taken by considering
revenue position

 Forecasting has to consider:

Organizational objectives
Market dynamics including the job market
Organizational Culture
Technological environment
FORECASTING METHODS

 Judgmental Methods: Estimates, Rule of thumb, Delphi method

and Nominal group

 Mathematical Methods: Regression, Simulation, Productivity

ratio and Staffing ratio
QUALITATIVE FORECASTING TECHNIQUES

 Scenario Analysis

 Delphi Analysis

 Nominal Group

 Managerial Estimates
 SCENARIO ANALYSIS

Projections or multiple predictor estimates, of future HR demand based on a variety

of differing assumptions about how future organizational events will unfold. The
steps are as follows:
 Identify three business scenarios that might be played out over the next five years
(most desirable, most likely case and least desirable case)
 For each scenario, assess the firm’s HR readiness and challenges with identification
of strengths and weaknesses in relation to these challenges
 Over the next 5 years, identify the likely trends, threats, need, motivations, changes
in relation to rivals, employees and candidate
 For each scenario, identify HR initiatives and programs that have to be undertaken to
deal with threat and opportunities.
SCENARIO FORECASTING
DELPHI TECHNIQUE
It is a process in which the forecasts and judgments of a selected group
of experts are solicited and summarized in an attempt to determine the
future HR demand. The steps are:
 Define and refine the issue or question

 Identify the experts, terms and time horizon

 Orient the experts

 Issue the first round questionnaire and its summary

 Issue the second round questionnaire

 Continue issuing the questionnaires

 NOMINAL GROUP TECHNIQUE
It is a long run forecasting technique utilizing expert assessment. The steps
are as follows:
 Define and refine the issue or question and the relevant time horizon
 Select the experts
 Issue the HR demand statement to the experts
 Apply expert knowledge, state assumptions and prepare an estimate
 Meet face to face
 Discuss the demand estimates and assumptions
 Vote secretly to determine the expert demand assessment
MANAGERIAL ESTIMATES

 The supervisors or the managers are well-acquainted with the job demands, efficiency and
competencies of employees

 They understand the future workload requirements and needed future capabilities of employees

 They would decide on the quality and quantity of HR demand

 The operating or lower level managers project staffing needs

 They submit them to their superiors for review

QUANTITATIVE METHODS OF FORECASTING

 Scatter Plot and Regression Analysis

 Trend Analysis

 Ratio trend analysis

 SCATTER PLOT

 The scatter plot studies the

correlation between the two
important variables.
 A scatter plot is graphically
method used to help identify the
relationship between two
variables
SCATTER PLOT EXAMPLE
A 500 bed hospital expects to expand to 1200 beds over the next 5 years.
The HR director wants to forecast how many registered nurses the hospital
will need. The HR director realizes she must determine the relationship
between the hospital size in number of beds and number of nurses required.
She calls eight hospitals of various sizes and finds this:

Size of Hospital (Number of Beds) Number of registered nurses

200 240
300 260
400 470
500 500
600 620
700 660
800 820
900 860
SCATTER PLOT EXAMPLE-KEY
REGRESSION ANALYSIS

Regression analysis presupposes that a linear relationship exists between one

or more independent causal variables, which are predicted to affect the target
dependent variable like future HR demand for personnel. The steps are:
 Calculate the product, squared value and average values of both variables
 Calculate the value of slope and constant
 Determine the regression prediction equation
 Calculate the predicted HR demand by inserting values for independent
variable
 REGRESSION EXAMPLE-2
The HR Manager of Standard Knitting Co., wanted to quantitatively
forecast the total cost accountants required for the textile manufacturing
company on the basis of the following data of their individual productivity
output to the accounts department.
Questions:
 Derive the regression equation for the cost accountants
 Predict the Total Manpower of Cost accountants for 50 as productivity

Total 191 170 272 155 280 173 234 116 153 178
Manpower
of Cost
accountants

Productivity 40 42 53 35 56 39 48 30 37 40
in thousands
REGRESSION-EXAMPLE 2-KEY
 X= Productivity

 Y= Total Manpower of Cost Accountants

 Mean X= 42;

 Mean Y= 192.2

 b = 6.4915

 a = - 80.4430

 Regression Equation Y estimated = -80.4430 + 6.4915 X

 For 50 as productivity, Y estimated = 244.1320

TREND ANALYSIS

 It is a forecasting method that extrapolates from historical organizational

indices

 It is a fluctuation in the level of employment over a time period

 Studying secular trends permits us to project past patterns or trends into the
future

 A linear trend can be fitted by the Least square method

HR TREND ANALYSIS STEPS

 Select the appropriate business/operational index

 Track the business index over time

 Track the workforce size over time

 Calculate the average ratio of the business index to the workforce size

 Calculate the forecasted demand for labor

TREND ANALYSIS-EXAMPLE
 The HR Manager wanted to quantitatively forecast the total cost
accountants required for the textile manufacturing company on
the basis of the following data. Forecast the number of
employees for 2018 by Trend Analysis

YEAR NUMBER OF EMPLOYEES

2013 50

2014 110

2015 350

2016 1020

2017 1950
TREND ANALYSIS-EXAMPLE 2 KEY

 a= 1198.333

 b = 349.8571

 For 2018: Y= 2072.97275