Chapter VI: Human Resource Management

Human Resource Planning (HRP) is the process of forecasting the future human resource
requirements of the organization and determining as to how the existing human resource
capacity of the organization can be utilized to fulfill these requirements. It, thus, focuses on
the basic economic concept of demand and supply in context to the human resource capacity of
the organization.

It is the HRP process which helps the management of the organization in meeting the future
demand of human resource in the organization with the supply of the appropriate people in
appropriate numbers at the appropriate time and place.

Further, it is only after proper analysis of the HR requirements can the process of recruitment and
selection be initiated by the management. Also, HRP is essential in successfully achieving the
strategies and objectives of organization.

In fact, with the element of strategies and long term objectives of the organization being widely
associated with human resource planning these days, HR Planning has now become Strategic HR
Planning.

Though, HR Planning may sound quite simple a process of managing the numbers in terms of
human resource requirement of the organization, yet, the actual activity may involve the HR
manager to face many roadblocks owing to the effect of the current workforce in the organization,
pressure to meet the business objectives and prevailing workforce market condition. HR
Planning, thus, help the organization in many ways as follows:

∙ HR managers are in a stage of anticipating the workforce requirements rather than getting
surprised by the change of events
∙ Prevent the business from falling into the trap of shifting workforce market, a common
concern among all industries and sectors
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∙ Work proactively as the expansion in the workforce market is not always in conjunction with
the workforce requirement of the organization in terms of professional experience, talent
needs, skills, etc.
∙ Organizations in growth phase may face the challenge of meeting the need for critical set of
skills, competencies and talent to meet their strategic objectives so they can stand well
prepared to meet the HR needs
∙ Considering the organizational goals, HR Planning allows the identification, selection and
development of required talent or competency within the organization.

It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any
unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the organization
with a comprehensive HR assessment and planning to meet its future requirements in the most
cost-effective and timely manner.

Human Resource Planning Process:

HRP effectively involves forecasting personnel needs, assessing personnel supply and matching
demand – supply factors through personnel related programmes. The HR planning process is
influenced by overall organizational objectives and environment of business.

Environmental Scanning:

It refers to the systematic monitoring of the external forces influencing the organization. The
following forces are essential for pertinent HRP.

Economic factors, including general and regional conditions. Technological changes

Political and legislative issues, including laws and administrative rulings Social
concerns, including child care, educational facilities and priorities.
 By scanning the environment for changes that will affect an organization, managers can
anticipate their impact and make adjustments early.

Organizational Objectives and Policies: HR plan is usually derived from the organizational
objectives. Specific requirements in terms of number and characteristics of employees should be
derived from organizational objectives. Once the organizational objectives are specified,
communicated and understood by all concerned, the HR department must specify its objective
with regard to HR utilization in the organization.

HR Demand Forecast:

Demand forecasting is the process of estimating the future quantity and quality of people
required to meet the future needs of the organization. Annual budget and long-term corporate
plan when translated into activity into activity form the basis for HR forecast.

For eg: in the case of a manufacturing company, the sales budget will form the basis for
production plan giving the number and type of products to be produced in each period. This will
form the basis upon which the organization will decide the number of hours to be worked by
each

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skilled category of workers. Once the number hours required is available organization can
determine the quality and quantity of personnel required for the task.

Demand forecasting is influenced by both internal factors and external factors: external factors
include-competition, economic climate, laws and regulatory bodies, changes in technology and
social factors whereas internal factors are budget constraints, production level, new products and
services, organizational structure and employee separations.

Demand forecasting is essential because it helps the organization to

Techniques like managerial judgment, ratio- trend analysis, regression analysis, work study
techniques, Delphi techniques are some of the major methods used by the organization for
demand forecasting.

HR Supply Forecast:

Supply forecast determines whether the HR department will be able to procure the required
number of workers. Supply forecast measures the number of people likely to be available from
within and outside an organization, after making allowance for absenteeism, internal movements
and promotions, wastage and changes in hours, and other conditions of work.
 Supply forecast is required because it is needed as it
1. Helps to quantify the number of people and positions expected to be available in future to
help the organization realize its plans and meet its objectives
2. Helps to clarify the staff mixes that will arise in future

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3. It assesses existing staffing in different parts of the organization.
4. It will enable the organization to prevent shortage of people where and when they are most
needed.
5. It also helps to monitor future compliance with legal requirements of job reservations.

Supply analysis covers the existing human resources, internal sources of supply and external
sources of supply.

HR Programming:

Once an organizations’ personnel demand and supply are forecasted the demand and supply
need to be balanced in order that the vacancies can be filled by the right employees at the right
time.

HR Plan Implementation:

HR implementation requires converting an HR plan into action. A series of action are initiated as
a part of HR plan implementation. Programmes such as recruitment, selection and placement,
training and development, retraining and redeployment, retention plan, succession plan etc. when
clubbed together form the implementation part of the HR plan.

Control and Evaluation:

Control and evaluation represent the final phase of the HRP process. All HR plan include
budgets, targets and standards. The achievement of the organization will be evaluated and
 monitored against the plan. During this final phase organization will be evaluating on the
number of people employed against the established (both those who are in the post and those
who are in pipe line) and on the number recruited against the recruitment targets. Evaluation is
also done with respect to employment cost against the budget and wastage accrued so that
corrective action can be taken in future.

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Importance of HRP: Staffing your company with the right kind of skilled employees is crucial
for maintaining its productivity and profit levels. Human resource planning can help you with
making present and future hiring decisions according to your business requirements.

Some of the benefits of human resource planning include:

It reviews the skills and capabilities of existing employees: With human resource planning,
you can review the skills and capabilities of your current employees and evaluate if they are
performing their work tasks adequately or require additional training. You can also decide to
promote some of the employees to positions with more responsibilities. That can expand their
professional abilities and you would save the time and money needed to interview and recruit
new candidates.

It allows the company to stay competitive: To stay competitive in your industry, you require to
hire the right people and provide them with the right incentives to continue working for your
company. Human resource planning can help ensure that you use the best hiring techniques and
offer attractive work terms and benefits to current and prospective employees. Talented, driven
people might want to work for your company if you are known to provide decent job training and
excellent remuneration and work-life balance.

It ensures the company’s long term growth: It is necessary to consider how your company
might evolve and cope with inevitable changes in the future. For instance, you may decide to
expand or shrink your business operations, leading to corresponding changes in your
requirements for employees and your expectations from them. The employees, too, may have
different needs and plans. Some of them may choose to change careers, look for other work
opportunities or retire. You would require to keep these things in mind when planning your
budget and hiring needs for the coming years.