HUMAN RESOURCE PLANNING

INTRODUCTION

No organization can afford the risk of a critical skills shortage. Human resource planning
(HRP) helps to ensure that you have the right people on your team - those with the skills to
compete, innovate, or grow your company.
How do you anticipate workforce needs in a business environment where the rate of
change is increasing while the number of people with the right skills is shrinking? The answer is
human resource planning. While human resources (HR) forecasting isn’t an exact science, you’ll
find ideas and processes, examples, and templates that you can use to forecast more
confidently, manage operations, and take control to increase current and future profitability.

Human resources planning is a process that identifies current and future human resources
needs for an organization to achieve its goals. Human resources planning should serve as a link
between human resources management and the overall strategic plan of an organization. Aging
worker populations in most western countries and growing demands for qualified workers in
developing economies have underscored the importance of effective human resources planning.

The objective of HR Planning is to ensure that the organization has the right types of persons at
the right time at the right place. It prepares human resources inventory with a view to assess
present and future needs, availability and possible shortages in human resource. Thereupon,
HR Planning forecast demand and supplies and identify sources of selection. HR Planning
develops strategies both long-term and short-term, to meet the man-power requirement.

A mission statement defines what business the organization is in, including

 why it exists
 who its customers are
 strategic goals set by top management to establish targets for the
organization to achieve

During a corporate assessment,

  SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis determines what is
needed to meet objectives
 strengths and weaknesses and core competencies are identified

HR must ensure staff levels meet strategic planning goals.

 An HR inventory report summarizes information on current

workers and their skills
 HR information systems (HRIS)
o process employee information
o quickly generate analyses and reports
o provide compensation/benefits support

HR must forecast staff requirements.

 HR creates an inventory of future staffing needs for job level and

type, broken down by year
 forecasts must detail the specific knowledge, skills, and abilities
needed, not just “we need 25 new employees”

HR predicts the future labor supply.

 a unit’s supply of human resources comes from:

o new hires
o contingent workers
o transfers-in
o individuals returning from leaves
 predicting these can range from simple to complex
 transfers are more difficult to predict since they depend on actions
in other units

To match labor demand and supply, HR

  compares forecasts for demand and supply of workers
 monitors current and future shortages, and overstaffing.
Sometimes, strategic goals must change as a result
 uses downsizing to reduce supply and balance demand

THREE KEY ELEMENTS OF THE HRP

Forecasting Staffing Needs

There are several ways to forecast your business needs, in order to predict how many
employees, you need to run your business and which roles these employees need to fill. Some
of the factors to consider include the situation of the economy, the internal business finances,
the demand for your products or services and the growth expectations for your business. Take
a look at your existing staff and see which current employees are likely to transition into new
positions and estimate the turnover rate of employees for your business.

Evaluating Supply
Evaluating the supply of employees includes a two-prong process: evaluating internal staff
(which will occur as you are forecasting your staffing needs) as well as external staff. Externally,
you need to evaluate the demographics of the workforce that is available. This can include
factors such as education, mobility, the unemployment rate and state and federal government
laws and regulations that can affect your industry, your business, existing and potential
employees. Evaluating all of these factors helps you determine if you have access to the
number and types of employees you need to fill your staffing forecasts.

Balance Supply and Demand

The final element of the human resources planning model is to determine how you are going to
balance the demand you have for employees with the supply of employees available. If you
have a shortage of employees, this will determine what type of recruiting efforts your business
will participate in to attract the employees it needs to fill needs within the company. It also
requires you to balance your full-time and part-time needs. If you have a surplus of employees,
this requires you to consider employee layoffs, retirements and situations where employees
may need to be demoted or moved into a lateral position (rather than receiving a promotion).