N
W E
HR S
Planning
Learning objectives:
▪ Define HRP
▪ Explain why HRP is important for an organization
▪ Understand the HRP process
▪ Explain the causes of future HR demand and HR supply
▪ Identify Strategies to be taken for surplus condition and shortage condition
▪ Introduction to the Japanese labor market and HRP
Define HRP
HRP is the process of
determining future employee
needs and deciding steps or
strategies to achieve those
needs for the purpose of
accomplishing organizational
goals and objectives.
Why is HRP important for an organization?
Explain why HRP is important for an organization
1.To determine future employee needs
2.To utilize HR more efficiently and effectively
3.To control employee cost
4.To develop high-talent employees
5.To formulate and implement strategic plans
To determine future
employee needs
An organization wants to know future
employee needs.
• What type of employees are needed?
• How many employees are needed
for the next month or next year?
Without doing HRP the organization will
not be able to determine employee
needs for the future.
To utilize HR more
efficiency and effectively
Careful analysis of all HRM
activities shows that their
effectiveness and efficiency, which
results in increased productivity,
depends on HRP
To control employee cost
• Through HRP it is possible to know in
advance about employee surpluses or
shortages which may occur in the
future.
• Hence it is possible for the
organization to get prepared in
advance in order to prevent from
occurring surpluses or shortages of
employees.
To develop high talent
employees
• Generally, there is a scarcity of highly
competent/ talented employees in
the market. The lead time that is
required to procure, train and
develop such employees is long.
• Successful HRP provides an adequate
lead time for the procurement,
training, and development of such
employees.
To formulate and
implement strategic plans
• In fact, a strategic plan involves long-
term decisions to achieve the
organization’s vision, mission, and
strategic objectives.
• HRP provides information inputs for
strategic planning efforts. It will show
human resource strengths and
weaknesses which will be useful for
developing the long-term plan.
Process of HRP
Demand Supply Gap Develop
Forecasting Projection Analysis Strategies
Demand
Forecasting
• Forecasting employee
requirements for the
organization comes under
this step.
• Forecasting demand for
human resources involves
estimating the types and
numbers of employees
needed for future
Factors
affecting future
demand for HR
• Demand for the product
• Goals and strategic plans of the
organization
• Production methods
• Retirements
• Resignations
• Deaths
• Leave of absence
• Termination
• External factors
How
do we forecast
the demand of
HR?
Forecasting
Techniques
1. Informal Forecast
2. Formal Expert survey
3. Delphi method
4. Unit Forecasting
5. Extrapolation
6. Indexation
Informal
Forecast
Under this technique, future demand
for human resources is determined
without a systematic base and it is
done quickly and randomly.
Generally, this technique may be
good only for small organizations but
cannot be recommended as a good
method for large organizations to
apply.
Formal
Expert survey
Systematically future demand for human
resources is estimated by conducting a
survey among experts.
A better method is for planners to
survey managers, who are experts on
their department’s future employment
needs;
Data collection can be done by using a
questionnaire or conducting interviews.
Delphi
method
• It is more sophisticated than the formal
expert survey.
• The Delphi technique is to elicit estimates
from a group of experts, usually, managers
and HR managers act as an intermediary.
• Its purpose is to obtain the most reliable
consensus of opinion from a group of
experts
• Thus, the technique attempts to obtain
independent judgments from a panel of
experts.
Delphi
method
Five steps in the Delphi technique
1. An issue, question, or problem is identified
2. A small group or panel of ten or fewer experts
is identified
3. Independent judgments about the issue are
obtained from each expert through a
questionnaire or structured interview
4. An intermediary or facilitator collects, analyzes,
and feeds back information from the first
questionnaire or interview to each expert
5. Steps 3 and 4 are repeated until there is a
consensus on the issue or problem
Unit
Forecasting
Unit forecasting method is a broad approach to
human resource forecasting and it uses a
“bottom-up” approach.
Extrapolation
Extrapolation involves
extending past rates of
change into the future. It is
based on past data and an
attempt is made to find a
trend or a pattern that might
continue into the future.
Indexation
This is another approach that
means making a forecast
based on the ratio between
(1) some casual factor (like
sales volume) and (2) the
number of employees required
Staffing table/ Manning table
A staffing table lists the future emplacement needs for
each type of job. This listing may be a specific number or
an approximate range of needs, depending on the
accuracy of the underlying forecast. These estimates
allow personnel specialists to match short-range demand
and supply.
Staffing table/ Manning table
Estimate HR supply
• Internal Supply
Internal supply consists of current
employees who can be promoted and
transferred to meet forecast needs or fill
job vacancies that are in the staffing
table.
• External supply
External supply consists of people who
are working for other organizations in
industries and job seekers who are
unemployed. They are the people who
are in the employee market.
Estimate HR supply
Steps in HR supply
1. Auditing current HR
This means assessing the education,
experience, and competencies of all the
current employees in the organization. In
this context HR audit is a systematic
attempt to summarize each employee’s
education, experience, and
competencies.
The audit results in preparing two
documents
1. Skill inventories
2. Management inventories
Estimate HR supply
Skill inventories
The audits of nonmanagers are called skill inventories
A skill inventory should contain the following information
accurately:
➢Identification information of the employee(name, address, sex, age,
etc.)
➢Identification information of the current job( job title, job location etc.)
➢Education ( academic and professional)
➢Experiences including previous jobs held
➢Seniority
➢Special competencies
➢ Training
➢Current and past job performance evaluations
➢Promotability
➢Weaknesses
➢Preferences
Estimate HR supply
Management inventories
audits of managers are called management
inventories.
In addition to the above, a management
inventory includes the following matters;
➢ Number of subordinates supervised
➢ Jobs and duties of the subordinates
➢ Total budget managed
➢ Management training received
➢ Management systems developed and
implemented
➢ Creative works and innovations
Estimate HR supply
Steps in HR supply
2. Identifying and arranging possible
replacements( succession planning)
By comparing HR audit information ( skills and
management inventories) with the job analysis
information ( job description and job
specification), it requires identifying and deciding
the most appropriate person from the current
employees to fill the job vacancies. These
replacements or tentative assignments can be
recorded on replacements charts.
Replacements chart/ succession planning
A replacement chart is a visual representation of
who will replace, whom in the event of a job
opening
Gap
Analysis
• Here calculating net employee
requirements for the relevant
period of planning should be
done.
• It is possible to calculate net
employee requirements by
subtracting estimated/ projected
supply( replacements) from
forecast HR demand.
• It involves determining net
employee requirements and
identifying shortages and
surpluses of HR
Gap Analysis
Job No. Job title Forecast Demand Estimated Supply Net Employee
Requirement
O03 Assistant Operation 01 00 -01
Manager
O07 Production Supervisor 02 02 00
F01 Finance Manger 01 01 00
F05 Management Trainee 01 00 -01
(Fin)
M04 Sales Engineer 07 02 -05
H03 HR executive 02 01 -01
A05 Driver 01 03 +02
--------------- ----------------------------- ------------ ---------------- ------------------------
Total Xxx Xxx Xxx
Develop strategies
Strategies in surplus conditions:
• Hiring freeze
• Attrition ( Voluntary departures)
• Encouragement of leaves of absence
• Early retirement on a voluntary basis
• Reduction of reward expenditure
• Lay off
• Formal outplacement facilities
• Termination
Develop strategies
Strategies in shortage conditions
• Have current employees work
overtime
• Subcontract work to other firms
• Provide opportunities for learners for
a period of time
• Hire part-time employees
• Hire casual employees
• Hire temporary employees
• Hire permanent full-time employees
• Capital substitution
Introduction to the Japanese labor market and HRP
Introduction to the Japanese labor market and HRP
Introduction to the Japanese labor market and HRP
Introduction to the Japanese labor market and HRP
The next section tries to clarify the stereotypes of
work system design with regard to Japanese HRM,
and labor-management relations, in the following
ways.
1. Recruitment and job assignment.
2. Rewards and motivation.
3. Training (skill grading system).
4. Participatory labor-management relations
1. Recruitment and job assignment.
1. Recruitment and job assignment.
Thank you
See you next week
