HUMAN RESOURCE

PLANNING

Frederick Owusu Sarpong

GIMPA Business School
 Objectives
By the end of this lecture, students should;
Know the meaning of HR Planning

Have an idea about the importance of HR

Planning to organisations
Know briefly the key steps in the HR Planning

Process
Know the consequences of poor HR Planning

(Class Discussion)
 WHAT IS HUMAN RESOURCE PLANNING ?
 Human Resource Planning (HRP) is the
predetermination of the future course of action
chosen from a number of alternative courses of
action for procuring, developing, managing,
motivating, compensating, career planning,
succession planning and separating the human
element of enterprise (Aquinas, 2006).
 HRP determines the human resources required by
the organisation to achieve its strategic goals
(Armstrong, 2006).
 Getting the right people with the right skills in the
right place at the right time. The 4 R’s!
WHAT IS HUMAN RESOURCE PLANNING ?
(Contd.)

 The process an organisation uses to ensure that

it has the right amount and the right kinds of
people to deliver a particular level of output or
services in the future (Gomez-Mejia et al., 2007).

 Anticipating the future business and

environmental demands of an organisation and
then developing a blue-print to meet the
personnel requirements dictated by these
conditions (Cascio, 1987).
 CHARACTERISTICS OF HRP
 1. HRP incorporates the human resources needs
in the light of organisational goals
 2. HRP is directed towards well-defined
objectives.
 3. HRP ensures that at all times, the organisation
has the right number and kind of people at the
right time.
 4. HRP paves the way for an effective
motivational process.
 5. The planning should be flexible enough to
accommodate the changing needs of the
organisation.
 AIMS OF HR PLANNING
The aims of HRP in any organisation will depend largely
on its context. Generally, the aims are:
a. To attract and retain people with the right blend of

skills.
 b. To anticipate the problems of potential surpluses or

deficits of people.
c. To develop a well-trained and flexible workforce so as

to enable the organisation adapt to changing situations.

d. To reduce dependence on external. recruitment when

key skills are in short supply.

e. To improve the utilisation of people by introducing

more flexible systems of work.

STEPS IN HUMAN RESOURCE PLANNING
 STEPS IN THE HRP PROCESS
 The dynamism in business practices nowadays
has made HRP assumed significance .
HRP consists of the following stages:
 a. Determining organisational objectives

 b. Analysing factors for manpower requirement

 (Demand forecasting; Supply forecasting)

 c. Determining net HR requirements

 d. Action plan
 STEPS IN THE HRP PROCESS
1. Determining Organisational Objectives
Before undertaking the HRP of an organisation, the

short-term and long-term objectives should be analysed.

The ultimate mission or purpose is to relate future

human resources to future enterprise needs so as to

maximise the future returns on investment in human
resources.
The HRP should meet two requirements:

1. should be directly related to the essential nature of the

organisation.
2. Changes in selected factors should be proportional to changes

in the human resource required by the organisation.

 STEPS IN THE HRP PROCESS
2. Analysing factors for manpower requirements
The factors for manpower requirement can be
analysed in two ways:
a. Demand Forecasting: It is a process of determining future
human resource needs in terms of quantity and quality. The
various heads of departments may review current job
descriptions to determine the necessary skills and qualifications
needed for the job.
b. Supply Forecasting: This approach estimates the future
sources of human resource that are likely to be available from
within and outside the organisation. The first step involved is to
obtain data and information about the present human resource
inventory.
STEPS IN THE HRP PROCESS
 C. Determining Net HR Requirements

 HR Demand = External Supply + Internal

Supply Therefore, HR Demand – Internal
Supply = External Supply
 The matching process brings demand and
supply in an equilibrium position so that
shortages and overstaffing positions are
resolved.
STEPS IN THE HRP PROCESS
 d. Action Plan
 The issues of shortages or surpluses are
addressed at this stage.
 The HRP is executed through various HR
activities, including recruitment, selection,
placement, training, socialisation, layoffs.
 There is also the control and evaluation of
performance of HR to check whether the HR
planning matches the HR and organisational
objectives.
Tools & Techniques of HRP
 Many tools are available to assist in the
human resource planning process.
Three key tools for consideration are:
 1. Skills inventory

 2. Succession planning

 3. Ratio analysis
 Tools & Techniques of HRP
 A. Skills Inventory
 This refers to the consolidated list of biographical and
other information on all employees in the organisation.
 In its simplest form, it contains the list of names, certain
characteristics, and skills of employees. Seven broad
categories of information included in a skills inventory are:
Personal data; Skills; Special qualifications; Salary and job
history; Capacity of individual; Special preferences of
individual. Because the information from a skills inventory
is used as input into promotion and transfer decisions, it
should contain information about each employee’s
portfolio of skills.
Tools & Techniques of HRP
 B. Succession Planning
 It is a technique that identifies specific people to fill
future openings in key positions throughout the
organisation. Some organisations have the
organisational replacement chart, which shows both
incumbents and potential replacements for given
positions within the organisation.
 A simple organisational replacement chart shows the:
Position, Incumbent, and Backup
Tools & Techniques of HRP
 C. Ratio Analysis
 This tool is used in HR planning to measure the
organisation’s human resource vitality as indicated by
the presence of promotable personnel and existing
backups. Two premises underlie ratio analysis:
 An organisation is “vital”
 An organisation is “stagnant”
 The end product of ratio analysis is the organisational
vitality index (OVI) [broad measure of the organisation’s
human resource vitality], whose calculation is based on
the number of promotable personnel and the number of
existing backups.
 Advantages of HR Planning
 1. Improvement of labour productivity: When
employees are kept satisfied through proper HR
planning, their morale is boosted and improves
productivity.
 2. Recruitment of qualified human resources: HR
planning helps to recruit the best labour force for the
long-term survival of the firm.
 3. Adjusting with the rapid technological change: With
the change in technology, the job and job
requirements are also changing. It is therefore
necessary to forecast and meet the changing
manpower, which can withstand the challenges of the
technological revolution.
 Advantages of HR Planning
 4. Reducing labour turnover: Labour turnover refers to the
mobility of labour out of the organisation. A firm may lose
experienced and skilled labour force through labour
turnover. This can be minimised through effective
manpower planning.
 5. Improved goal attainment: The planning process results
in improved goal attainment set by the organisation and
for the HR department.
 6. Helps a firm to meet future labour needs: A proper
planning of the human resource helps to avoid
unnecessary labour shortages and surpluses, which also
aids in avoiding significant financial costs.
Class Discussion
 What are some of the consequences of
poor Human resource planning
Thank you