Unit II: Human Resource Planning

Concept and Meaning of Human Resource Planning

HRP is the process of forecasting the future human resource needs and
choosing the courses of actions to satisfy those needs. It involves estimating
the size and composition of future workforce to ensure survival and
organizational growth.It is, in fact, a part of the total organizational lanning. It
is a continuous process rather than a single shot attain. It tries to keep the
organization supplied with required and capable people when they are
demanded.

According to Decenzo and Robbins, “HRP is the process of determining an
organization’s human resource needs.” According to Torrington and Hall,”
HRP is fundamental in developing and implementing the organization’s human
resource strategy, which in turn, enables the organization to meet its goals”.

According to C. F. Rulss, ” Human Resource Planning, also referred to as
manpower planning or personnel planning, can be defined as the process of
getting the right number of qualified people into the right jobs and the right
time.” HRP is variously called manpower planning, personnel planning or
employment planning. In a nutshell, HRP includes the estimation of how many
qualified people are needed to perform the various organizational jobs, how
many people will be available, and what must be done to ensure that HR
supply equals HR demand at the appropriate point in future. It is an integral
part of corporate planning that can be formulated at national, industry and unit
levels.

Characteristic of HRP

The above discussion reveals the following key characteristics of HRP.

• Goal oriented

• Related to future HR needs

• Concerned with quantity and quality of human resource needed

• Part of total organizational planning

• Part of Acquisition Function

• It can be both short or long term

Objectives of HRP

They are the people who have to work to implement the strategies of an organization. 2) Minimizes future risk and uncertainty : By forecasting the demand and supply of technical and other manpower for the future. socio cultural and economic forces. 3) Helps to cope with changing situation : HRP enables an enterprise to cope with changes in competitive forces. • To gain a competitive advantage in the market. human resources planning minimize future risk and uncertainty. and government regulations. products. HR planning also determines the success of the organization. Importance of Human Resources Planning HR planning is very important to any type of organization since Human resources are those resources who monitor the other resources. • To assess or forecast future skill requirements. markets. It is important to cope with change associated with the external environment factors. Then it organizes various training and . 5 Personnel costs may be less : Personnel costs may be less because the management can anticipate imbalances before they become unmanageable and expensive. It helps to assess the current human resources through HR inventory and adapts it to changing.The main objectives of HRP as follows: • To ensure optimum use of human resources currently employed. • To support the company management to minimize operational costs. 1) Helps to implement the business strategy: Without proper planning of human resources business strategies cannot be implemented. 6) It ensures the Development of HR : HRP planning identifies the skills requirement for various levels of jobs. • To provide control measures to ensure that necessary human resources are available as when required. 4) It promotes awareness of human resources activities: Human resource planning promotes awareness that human resource activities are equally important at every level of the organization. technology.

7) It ensures the Proper utilization of HR : HR planning measures that the organization acquires and utilizes the manpower effectively to achieve organizational objectives. HR planning helps in assessing and recruiting skilled human resources.development campaigns to impart the required skill and ability in employees to perform the task efficiently and effectively. Major Activities of HRP (HRP Process/ Components of HRP) Human Resource Planning is an important function to meet the future organizational needs and & environmental challenges. Step I Step II Step III Step IV Step V Assessi Forecasti Forecastin Formulatin Environm ng ng HR g HR g Action ental Current demand Supply Plan Analysis HR Evaluation and Feedback Fig: HR Planning Process . HRP is the process of anticipating future human resource needs & choosing course of action needed to satisfy those needs. Moreover. The major activities of HRP process can be discussed under the following five steps. Indeed. it focuses on the optimum utilization of HR to minimize the overall cost of production.

Step I: Environmental Analysis : Before planning about future human resources. After this. Succession Planning (Assessing the succession potential) iii. Once the activities are determined. HR managers begin to prepare HRP by developing a profile of the current status of employees working in organization. optimum utilization of available resources) ii.) Step V: Preparing Action Plan : After forecasting human resource demand and supply. External source (educational institutions. action plan is prepared. HRD should focus on only needy manpower whereas if the case is shortage of manpower. . a proper matching between demand and supply forecasting is desirable. Therefore estimation of supply of human resources on the basis of demand forecasting is another important function. i. Usually organization may adopt following two methods for this purpose. Analysis of existing jobs Step III: Forecasting Human Resources Demand : Organizational objectives and the activities involved to meet those objectives are the basis for estimating future human resources needs. reassessment of existing resource and their potential. Step II: Assessing Current Human Resources : With the help of line managers. Group discussion technique and Managerial judgmental technique) b) Statistical techniques (Regression analysis and Time series analysis) Step IV: Forecasting Human Resources Supply : Forecasting human resource demand worth only when if it is systematically located the sources from where the perspective candidates can be achieved. forecasting of human resources is done. HR inventory/ knowing existing HR details through HRIS or MIS ii. open market etc. T&D institutions. succession. a) Judgmental Techniques (Delphi technique. More specifically this phase includes the following steps. it is possible for HR managers to find out the internal strength and weaknesses as well as external opportunity & threats of an organization that have direct influence on performance. career counseling institutions. If there is surplus. Only after an analysis of internal & external environment. the foremost step is to make analysis of environmental forces and possible impact on organizational activities. The projection of human resource supply can be based on following sources: i. and even re-forecasting of HR supply by identifying new sources is desirable. Internal source (job rotation. The shortage and surplus of forecasting employees is to be treated accordingly.

selection and socialization plan b) Training & Development plan c) Job Analysis & Evaluation d) Transfer & Promotion plan e) Career Development plan etc. a) Recruitment. Since HRP is a continuous process.This is the phase of implementation where usually following plans are developed. If any changes occur in the internal as well as external factors or the process did not produce desired results. it also involves evaluation and feedback. Factors Affecting HRP The HRP process is influenced by several considerations. then necessary adjustment is made in the next cycle of HRP. The more important of them are shown in the figure below: .

developed job- analysis information and HR information system (HRIS) that provide accurate and timely data. . V ) Type and quality of information The information used to forecast HR needs originates from a multitude of sources. IV) Time horizon : Another major factor affecting HRP is time horizon. The greater the uncertainty. A mature organization experiences less flexibility and variability. Personnel planners deal with environmental uncertainties by carefully formulating recruitment. there are short term plans spanning six months to one year. Small organizations in the embryonic stage may not have personnel planning. and the supervisory and managerial personnel required. retrenchment and retirement. the shorter the plans time horizon and vice versa. in the declining stage planning is done for layoff. The exact time span. Issues like retirement and possible retrenchment dominate planning. however. the organization decides either to be proactive or reactive in HRP. On the other hand. number and type of staff needed. Political. social and economic changes affect all organizations. Finally. depends on the degree of uncertainty prevailing in an organization’s environment. Figure showing the factors affecting HRP I) Type and strategy of organization : The type of organization is an important consideration because it determines the production process involved. II) Organizational growth cycles and planning : The stage of an organization’s growth can have considerable influence on HRP. Primarily. there are long term plans which spread overthree to twenty years. III) Environmental uncertainties : HR managers rarely have the privilege of operating in a stable and predictable environment. The strategic plan of the organization defines the organization’s HR needs. Need foe planning is felt when the organization enters the growth stage. Closely related to the type of information is the quality of data used. selection. The HR departments must maintain well. or it can simply react to needs as they arise. It can either decide to carefully anticipate the needs and systematically plan them to feel them far in advance. A major issue in HR planning is the type of information which should be used in making forecasts. On one hand. and training and development policies and programs.

5. therefore. 3. Financial forecasting takes precedence over HRP. such as preparing people for assuming greater responsibilities. The personnel plan conceived and formulated by the HR practitioners when enmeshed with organizational plan. While fulfilling the short-term needs it may be possible that long-term needs can be ignored which will create lots of conflict. Outsourcing is a regular feature both in the public sectors as well as in private sectors. 2. For example.contracting or ancillarisation. necessary for the HR department to anticipate vacancies. there arises a conflict between the pressure to get the work done on time and long-term needs. : There is no co-ordination among the operating managers and HR personnel. These two approaches can create a conflict while planning for HR. these all factors have to be properly considered while formulating the Human Resources planning in the organization. Conflicts between short-term and long-term HR needs There can be conflict between short-term and long-term HR needs. to provide sufficient lead time to ensure that suitable candidates are recruited. HR information incompatible with strategy formulation : HR information often is incompatible with the information used in strategy formulation. It is. as far in advance as possible. Conflicts between quantitative and qualitative approaches to HRP : The quantitative approaches to HRP focus on how to get organization achievement and qualitative approaches focus on individual employee concerns such as promotability and career development. they cannot focus on the overall management. might make the overall strategic plan itself defective. Job vacancies arise because of separations. HR practitioners have expertise only in personnel matters : HR practitioners are only experts in handling personnel matters. It is easy to employ shop- floor workers. the need for off-loading. but a lot of sourcing is necessary for hiring managerial personnel. Strategic planning efforts have been long oriented towards financial forecasting often to the exclusion of other types of information. VI) Nature of the jobs being filled : For HR planners must consider the nature of jobs being filled in the organization. No co-ordination among operating mangers and HR personnel. Barriers to Human Resource Planning (HRP) The major barriers to HRP are listed below: 1. HRP is not . Most organizations have surplus labor and they do not want to worsen the problem by hiring more people. 4. promotions and expansion strategies. VII) Outsourcing Several organizations outsource part of their work to outside parties either in the form of sub. Hence. However.

it shows that how important is Human Resources Planning for HRM or for whole organization. Promotion and transfer are not planned in advance.strictly an HR department function. . Supply outstrips demand for human resources in Nepal. Nepalese organizations lack right number and kinds of people at the right places and at right time. Effective job analysis is lacking in Nepalese organization to lay down proper job descriptions and pecifications. There are the following features of Human Resources Planning in Nepal. HRP Practices in Nepal Human Resource Planning (HRP) is one of the most important tasks in successful human resources management program. They also lack effective Human Resource Information System. Poor Supply Forecasts Nepalese organizations lack proper supply forecasts of human resources from inside and outside sources. 2. This has constrained proper assessment of current human resources. Poor Demand Forecasts : Nepalese organizations lack proper demand forecasting in term of number and skills of people required. Most organizations lack human resources planning. 3. Lack of Assessment of Current Human Resources : Most Nepalese organization lack up-to-date human resource inventory which describes the skills currently available. HRP is not linked with overall corporate plan. 4. The country lacks comprehensive human resources surveys. Industrialization is the key factor to develop the country. Even the professionals and skilled technicians are suffering from unemployment. Poor tradition of Human Resource planning Nepal has a poor tradition of human resource planning. Business organizations lack reliable revenue forecasts which serve as the basis for the forecast of human resource demand. 1. Nepal is an underdeveloped country. for development of industries and to make proper management in organization the HRM practices should be sound and proper. Nepalese labour market is supply-driven. where as operating managers are responsible for the work relating to their departments. HR personnel only focus in the human resource management. The education system is not friendly to need the needs of the labour market. Nepalese managers regard human resource planning as an area of low priority. So.

5. the human resource planning function in Nepalese organizations needs strengthening. 6. The number one priority of Nepalese politicians is to provide employment to their political worker. Strategic human resource planning is lacking. Even the big houses in the private sector lack proper human resource planning. Overstaffing in Government and public Enterprises Most government agencies and public enterprises in Nepal suffer from overstaffing. This will definitely have a positive impact for human resource planning in Nepalese organizations in coming years. 8. Future Perspective : The global organizations in banking. friends and “near and dear”. Human Resource Planning is utterly neglected by “Politically appointed” managers of public enterprises. Succession planning is not done by Nepalese managers. They also implement them. They prefer to hire their relatives. Overstaffing has made human resource planning irrelevant in government and public enterprises. . Short term horizon Human Resources Planning in Nepal has generally a one year horizon. Private Sector Neglect The family owned and managed private sector organizations do not bother about human resource planning. Therefore. Such organization can function effectively by cutting half of their employee strength. 9. They seem to be afraid of this concept. They fear that the persons being developed for succession may oust them from their jobs.Mismatch of Demand and Supply Nepalese organizations do not give proper attention to matching Demand and Supply forecasts to determine future shortages and surplus. Human resources planning are not regarded as a overall strategic planning. hospitality and manufacturing sectors in Nepal prepare systematic human resource plan. 7.