UNIT-2 HUMAN RESOURCE PLANNING BY MS.

NEHA KALRA
 HUMAN RESOURCE PLANNING
Human resource planning is the process by which members of the HR
department identify current and future hiring or training needs. The
purpose of human resource planning is to make sure that a business has
the right type of talent spread throughout its departments.
Human resource planning also aims to help businesses figure out what
areas their company lacks in terms of employment and what strategic
steps they need to complete to achieve those talent areas at their
company.
Human Resource Planning is a process of forecasting and strategizing
to meet the organization’s demand and supply of manpower needs in
the present and future. It is a process to ensure that you have the right
people with the right skillset in your team thereby building a strong
workforce capability in your organization.
 CHARACTERISTICS OF HRP
Future-Oriented
Human resource planning is prepared to assess the future requirement of the workforce in
the organization. It helps identify the size and composition of resources for future purposes.
Continuous Process
Human resource planning is a continuous process. The human resource planning prepared
today may not be applicable for the future due to the ever-changing external forces of
the environment.
Hence, to address such changing factors, human resource planning needs to be revised and
updated continuously.
Optimum Utilization of Human Resources
Human resource planning focuses on optimum utilization of resources in the organization. It
checks how employees are utilized productively. It also identifies employees’ existing
capabilities and future potentialities to perform the work.
Right Kinds and Numbers
Human resource planning determines the right number and kind of people at the right
time and right place who can perform the required jobs. It also assesses the future
requirement of human resources for the organizational objective.
Determination of Demand and Supply
Human resource planning is determining the demand for and supply of human
resources in the organization. Then a match between demand and supply estimates the
optimum level of human resources.
Environmental Influence
Environmental changes influence human resource planning; hence, it is updated as per
the change occupied in the external environment.
Related to Corporate Plan
Human resource planning is an integral part of the overall corporate plan of the
organization. It can be formulated at strategic, tactical, and operational levels.
A Part of the Human Resource Management System
As a part of the total human resource management system, human resource planning is
regarded as a component or element of HRM concerned with the acquisition and assessment
of the workforce.
It serves as a foundation for the management of human resources effectively and efficiently.
 IMPORTANCE OF HRP
1. Increases the value of current employees: Human resource planning emphasizes reviewing
current employees, their job titles and additional skills that make them vital to company
operations along with training needs. By doing this, HR professionals help their employer
save money otherwise spent on hiring new employees and achieve a return on their
investment by advancing the professional capabilities of their employees.
2. Helps companies adapt to industry changes: By making use of human resource planning,
companies can anticipate changing needs in talent or the way their industry operates to
adapt and continue prospering. This is especially important if a company discovers one or
more niche areas to market themselves, as HR professionals have a plan set in place to
transition roles and budget for new positions.
3. Enables companies to maintain a competitive advantage: Human resource planning helps
companies make strategic hiring and training decisions when planning for the future.
Because of their knowledge, HR professionals understand that prospective employees want
specific benefits, work-life balance and other attractive job factors.
4. Promotes the growth and longevity of the company: Human resource planning causes HR
professionals to think about these possible changes and anticipate their hiring needs for
future years. This further allows them to plan and budget for additional hiring needs,
department expansions and potential retirements.
5. Improving Operations In Human Resource Planning Process: Workforce analysis and
human resource planning process helps to streamline various business functions as you can
plan the right deployment of the workforce according to need. You know well in advance
potential shortages in any discipline of business and are prepared to take care of it. This
avoids any potential operational danger that may result due to the shortage or surplus of
manpower. Good HR planning also supports the distribution of talent across geographies
and culture in a planned way hence creating a positive value proposition. Introducing training
and proper succession plans reduces risks of talent void thereby increasing productivity.
6. Enable Growth Phase For Small And Mid-Size Businesses: Small businesses’ growth is often
sudden and dynamic. They get impacted by the external environment the most.HR planning
for small businesses is not just an additional adjustment but an integral part of the overall
growth strategy. Often small businesses need to plan when to outsource, how many people to
recruit, what are the compensation benefits on offer etc. A small business may initially start
with 2-3 people, but their business strategy needs to involve the human plan to know how they
are going to grow in team size to meet business goals.
 HUMAN RESOURCE PLANNING STEPS
1. Make HR objectives
When creating HR objectives, it's important to develop goals for the overall company and individual
departments. Department goals should reflect individual responsibilities and requirements while
contributing to the larger objectives of the business. For example, you might know that each project in
the marketing department requires at least three to four people. If the company plans to work on
three projects simultaneously every year, it may need at least nine or more skilled employees for its
marketing department.
2. Analyze the current workforce
Analyzing the company's workforce involves reviewing the skills, experience and performance of the
current employees to determine the effectiveness of the business. During this step, it can also be
beneficial to communicate with department leaders and managers to see how they feel their team
members are performing and if they need more resources to fulfill their department's responsibilities.
It's also helpful to give employees self-assessments and questionnaires to see how they feel about their
job performance and what they might like to see from the new HR plan.
Once you have the information, consider creating a spreadsheet or document highlighting each
department's skill set based on its employees. This can help you determine the major strengths of each
department. You can also read over it to determine if there are any opportunities for improvement.
3. Determine HR supply and demand
Determining your company's HR supply and demand involves analyzing your collected data and
information on current employees, assessing the company's present needs and anticipating what
needs may arise in the future. When reviewing data, determine if your company has an
employee shortage or surplus by examining salary expenses and the quality and quantity of
employees' work. You can decide which processes can change to reflect this information.
For example, your company may have a labor surplus if salary expenses are too high and
employees are producing more than enough goods or services. When anticipating future needs,
review market trends and research possible technological advancements to see if there might be
areas that the company may automate within a couple of years. This can help determine if you
can spend resources on training right away or if you can wait for the new technology.
Supply forecasting: Supply forecasting is when HR professionals evaluate current employees to
determine whether or not they meet the demands of the business's goals and talent needs.
Supply forecasting also makes HR think about projected retirements, promotions, layoffs or
employees leaving the company, all of which could produce vacancies.
Demand forecasting: Demand forecasting focuses on the types of talent and the number of
employees you will need to match future bushiness goals or industry needs.
4. Create an action plan
When creating an action plan, it's important to decide whether the
company can hire more employees, transfer or renegotiate contracts or
focus on developing current employees' skills. If the company requires
more employees, it's important to determine what skills they should
possess and which departments need them most. If the company has an
employee surplus, consider which employees might approach retirement
or if other company facilities could use their skills.
If some employees need more training, it can help to solidify which skills
or knowledge might require improvement and how to develop them
properly. This can direct you to consider available resources before
developing a process plan. For example, if the company doesn't have
enough funds to hire more sales associates but still wants to increase its
sales, you might create a training program to develop your employees'
sales skills.
5. Continue to train and develop
Even after a company executes its HR plan, it should continue to train and
develop its employees. Training programs can improve occupational skills and
better position employees for future advancement. Promoting employees who
already understand the business and its systems can save the company time,
money and other valuable resources.
6. Evaluate the plan
After testing the HR plan for some time, evaluate its effectiveness
with feedback from employees and managers. By examining the plan's goals
and objectives, the company can determine if the plan has helped increase
productivity, boost profits and solve workforce gaps. If the company doesn't
achieve every goal, it can adjust the HR plan and find areas for improvement.
For example, if the company's marketing department hired more employees
but the amount of work hasn't increased, you can analyze the department's
skills again to determine if employees can still develop in certain areas.
Otherwise, there may be other reasons for the shortage of work, like
underperforming management or unclear individual responsibilities.
 ADVANTAGES OF HRP
1. Building abilities – Workers will work more effectively thanks to such planning. In addition,
businesses will grow professionally with the present employees instead of depending
on independent contractors if they provide the education and training required to develop
skills and improve capacity.
2. Enhancing retention – Employee retention is higher if they demonstrate appreciation by
spending time and money to provide them with the resources they need to advance. In
addition, it will make their employees more excited and let them know they appreciate their
contribution and length of service.
3. Predictability – The market environment, the state of the economy, and supply
chain difficulties present enough daily uncertainty for the company. By adding an extra
layer of certainty to scheduling, staffing, and managing ongoing workload, putting thought
and planning into providing employees with what they require to perform a good job and
remain firm over time helps alleviate some of this determinism.
 DISADVANTAGES OF HRP
1. Expensive – Training and putting money into employees is expensive. Therefore, planning
may reduce the bottom line in the near term before it enhances profits, whether spending
on specialized training or taking employee time away from jobs that are more likely to
increase incoming income immediately.
2. Unpredictability – There is no assurance that the employee’s train will remain with the
firm sufficiently to realize the advantages of investment, even if planning for human
resources can offer the business a better degree of stability through improving personnel
capabilities.
3. Illusionary – Planning for human resources can improve the workforce’s ability to do their
roles. Still, it can prepare them to carry out outdated tasks as businesses and industries
develop. As a result, they can experience a false sense of safety and not respond to
situations quickly enough.
DIFFERENCE BETWEEN HUMAN RESOURCE
MANAGEMENT AND HUMAN RESOURCE
PLANNING
 QUANTITATIVE ASPECT OF HUMAN
RESOURCE PLANNING
Supply forecasting: Supply forecasting is when HR professionals evaluate current
employees to determine whether or not they meet the demands of the business's
goals and talent needs. Supply forecasting also makes HR think about projected
retirements, promotions, layoffs or employees leaving the company, all of which could
produce vacancies.
Demand forecasting: Demand forecasting focuses on the types of talent and the
number of employees you will need to match future bushiness goals or industry needs.
 QUALITATIVE ASPECT OF HUMAN
RESOURCE PLANNING
The qualitative aspect of human resource planning means that after
determining the number of personnel for each department in the organization,
it is required to determine the nature of the job, which will further help in the
minimum acceptable qualities required by the personnel. Determining the
nature of the job along with the minimum acceptable qualities of the personnel
is called job analysis.