2.2.

1 Human Resource
Planning
 HRP is a means
Company
Company Competitive
Competitive of achieving strategic fit
Values
Values Challenges
Challenges b/n HR and business
requirement

Business
Business
Strategy
Strategy
HR
HR HR
HR
Philosophy
Philosophy Policy
Policy
Environ-
Environ-
ment
ment EXTERNAL INTERNAL
INTERNAL
FIT
FIT
FIT

HR
HR HR
HR
Practices
Practices System
System

Therefore Human Resource Planning always starts with understanding the

business need of the organization
HRP is a tool of Ensuring the Fit
between HR and Organization Strategy

 External Fit (or External Alignment)

 Focuses on the connection between the business
objectives and the External environment
 Internal Fit (or Internal Alignment)
 Aligning HR practices with one another to
establish a configuration that is mutually
reinforcing.
Human Resource Planning (HRP)
 HR Planning is more than just having the “right people in the
right place at the right time”.
 Its about instituting the people –related practices and activities
that will help the organization to achieve, and improve its
business results.
 HR Planning in its simplest form, is about answering three
questions:
 what are our business needs,

 how/what do we need to meet those needs and

 what strategies should we take to ensure our needs are met?

Importance Human Resource Planning (HRP)

 Is the first component of HRM strategy

 All other functional HR activities are derived from and
flow out of the HRP process.
 It basis in considerations of future HR requirements in
light of present HR capabilities and capacities.
 It is proactive in anticipating and preparing flexible
responses to changing HR requirements.
 It focus on both an internal and external environment.
Major Objectives of HRP
 Preventing understaffing and overstaffing
 Ensure the organization has the right employees with
the right skills at the right place at the right time
 Ensure the organization is responsive to cope with its
environment
 Provide direction and coherence to all HR activities
and systems
 Types of Planning
 Aggregate Planning
 Anticipating the needs for groups of employees in
specific, usually lower level jobs and the general skills
employees will need to ensure sustained high
performance.
 Succession Planning
 Focuses on ensuring that key individual management
positions in the organization remain filled with
individuals who provide the best fit for these critical
positions.
HRP Processes
Understanding organizational
objective and strategy

Scan external environment Analyzing internal HR

For change affecting supply capability

Forecasting

Organizational Survey the available

Need for people people

HR strategy and plan

HRP and Environmental Scanning

 The systematic monitoring of the major external forces

influencing the organization.
 Economic factors
 Competitive trends
 Technological changes
 Political and legislative issues
 Social concerns
 Demographic trends
Scanning the Internal Environment

 Cultural Audits
 Audits of the culture and quality of work life in an
organization.
 How do employees spend their time?
 How do they interact with each other?
 Are employees empowered?
 What is the predominant leadership style of managers?
 Benchmarking
 The process of comparing the organization’s
processes and practices with those of other
companies.
 Human Resource Planning Model
FORECASTING
FORECASTINGDEMAND
DEMAND BALANCING
BALANCING
Considerations Techniques SUPPLY
SUPPLYAND
AND
Considerations Techniques DEMAND
••Technology •• Trend DEMAND
Technology Trendanalysis
analysis
••Financial resources •• Managerial
Financialresources Managerial
(Shortage)
(Shortage)
••Organizational
Organizationalgrowth
estimates
growth estimates
Recruitment
Recruitment
••Mgmt. •• Delphi
Delphitechnique Full-time
Full-time//Part-time
Mgmt.philosophy
philosophy technique Part-time
Techniques
Techniques External
External (Surplus)
(Surplus)
••HR
HRinventories
inventories Considerations
Considerations Reductions
Reductions
••Markov
Markovanalysis
analysis ••Wkforce
Wkforcechanges
changes ••Terminations
Terminations
••Skill
Skillinventories
inventories ••Mobility
Mobility ••Retirements
Retirements
••Replacement
Replacementcharts
charts ••Govt
Govtpolicies
policies
••Succession
SuccessionPlanning
Planning ••Unemployment
Unemployment

FORECASTING
FORECASTINGSUPPLY
SUPPLY
 Quantitative Approach: Trend
Analysis
 Forecasting labor demand based on an
organizational index:
 Select a business factor, e.g. sales, that best predicts
human resources needs.
 Plot the business factor in relation to the number of
employees to determine average labor productivity.
 Compute labor productivity for the past five years.
 Project human resources demand out to the target
year(s).
Example of Trend Analysis of HR
Demand
BUSINESS LABOR HR
FACTOR ÷ PRODTY = DEMAND
YEAR (INCOME IN ‘000) (INCOME/EMPLOYEE) (NO. OF EMPLOYEES)

1997 2,935 8.34 352

1998 3,306 10.02 330
1999 3,613 11.12 325
2000 3,748 11.12 337
2001 3,880 12.52 310
2002 4,095 12.52 327
2003* 4,283 12.52 342
2004* 4,446 12.52 355 *Projected figures
Qualitative Approaches to
Demand Forecasting
 Management Forecasts
 The opinions (judgments) of supervisors, department
managers, experts, or others knowledgeable about the
organization’s future employment needs.
 Delphi Technique
 An attempt to decrease the subjectivity of forecasts by
soliciting and summarizing the judgments of a preselected
group of individuals.
 The final forecast represents a composite group judgment.
Forecasting Supply of Employees:
Internal Labor Supply
 Staffing Tables
 Markov Analysis

 Skill Inventories

 Replacement Charts

 Succession Planning
Forecasting Internal Labor
Supply
 Staffing Tables
 Graphic representations of all organizational jobs,
along with the numbers of employees currently
occupying those jobs and future (monthly or yearly)
employment requirements.
Internal Supply Forecasting Tools
 Skill Inventories
 Files of personnel education, experience,
interests, skills, etc., that allow managers to
quickly match job openings with employee
backgrounds.
 Replacement Charts
 Listings of current jobholders and persons who
are potential replacements if an opening occurs.
An Executive Replacement Chart
Forecasting Supply of Employees:
External Labor Supply
 Factors Influencing the External Labor
Supply:
 Demographic changes in the population
 National and regional economics
 Education level of the workforce
 Demand for specific employee skills
 Population mobility
 Governmental policies
Sources of Information About
External Labor Markets
 Department of Labor publications
 State and local planning and development
agencies
 Chambers of Commerce

 Industry and trade group publications

 State and local employment agencies

HRP Considerations

Balancing the gap between

supply and demand
HRP Considerations
 HRP is a forward looking function and an organizational tool
which identify skill and competency gaps and subsequently
develop plans for development of deficient skills and
competencies in human resources to remain competitive.

 HRP ensures benefits to the organizations by creating a

reservoir of talent, preparing people for future cost cutting and
succession planning besides creating a back –up in case of
diversification and expansion.
HRP Considerations

Optimum manpower planning, therefore, aims at:

 Balancing demand, supply, distribution and allocation of
manpower,
 Controlling cost of human resources,
 Formulating policies on transfer, succession, relocation of
manpower.
 HRP is a planning process by which an organization can move
from its current manpower position to its desired manpower
position.
 Manpower planning may be defined as a strategy for
acquisition, utilization, improvement and retention of human
resources.
 Elements of The HR Plan
 Acquisition of personnel
 Effective Utilization
 methods improvement
 training to prevent obsolescence
 Development and Improvement
 broad-based training and development
 performance management systems
 Retention
 proper remuneration
 long-term career planning
 healthy employee relations
 good working environment
Thank you