FM-AA-CIA-15 Rev.

0 10-July-2020

Study Guide in BAC 101 – HUMAN RESOURCE MANAGEMENT Module No. 4

STUDY GUIDE FOR MODULE NO. ___ 4

HUMAN RESOURCE PLANNING

MODULE OVERVIEW

Human resources planning (HRP) is the process during which the requirements of human resources are
determined in a systematic manner which ensures that the required number of employees, with the necessary
skills, are available when they are needed.

Human resource planning enables businesses to meet their current and future demands for talent,
allowing human resource managers to anticipate and develop the skills most valuable to an organization, and
providing the enterprise with the optimal balance of staff in terms of available skill-sets and numbers of
personnel. Proper planning also provides a path for future development by establishing a reservoir of talent
capable of filling leadership roles. And in the long term, human resource planning helps align human capital
management more closely with business strategy.

The main focus of this module is to develop an understanding of the factors affecting human resource
planning, strategic planning as well as forecasting techniques on manpower demand and supply.

MODULE LEARNING OBJECTIVES

At the end of this Module, you should be able to:

1. Define human resource planning and its relationship to strategic planning.

2. Explain the various steps of human resource planning.
3. Identify the factors affecting HRP.
4. Discuss how to forecast HR demand and supply.
5. Describe how to deal with undersupply and oversupply of manpower and cite alternative courses of
action/solutions.

LEARNING CONTENTS

Before human resources planning can be done, the organization’s corporate strategic planning process must
take place.

The strategic planning process at corporate level is as follows:

⮚ Determine the corporate vision.

What is a vision? A vision is a future ideal that the organization wants to achieve. It is a clear cognitive
image of what the organization wants to be. According to COVEY (“The Seven Habits of Highly Effective People,
a person must begin with the end in mind.

The top management must determine the vision, but in the process they must be sensitive to the needs,
values and interests of their people.

⮚ Determine the mission of the organization.

The mission is a formulation that reflects the reason for the organization’s existence. The mission reflects the
type of business in which the organization is involved.

⮚ Explore the external environment.

During the exploration of environment, the possible threats (limitations) and opportunities must be
determined. Examples of possible threats and limitations are labor shortages, new competitors, unable to keep
up with technological developments, and unstable economy.

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Study Guide in BAC 101 – HUMAN RESOURCE MANAGEMENT Module No. 4

As a result, strategies must be developed which use the opportunities and minimize the threats and
limitations.

⮚ Explore the internal environment.

During the exploration of the internal environment, the organization’s strengths and weaknesses must
be identified. Examples of strengths are the following:

✔ A highly competent (skilled) and motivated labor-force;

✔ A diverse labor-force in a global environment;

✔ Effective marketing strategies;

✔ Quality leadership;

✔ Support mechanisms;

✔ A healthy financial position

The following are examples of possible weaknesses:

✔ A shortage of training;

✔ An unhealthy financial position;

✔ Poor quality of leadership;

✔ Technology is not up to standard.

Develop strategies that utilize strengths and minimize weaknesses.

✔ Set short and long term goals.

✔ Develop appropriate strategies for achieving goals.

✔ Implementing the various strategies.

✔ Verifying the effectiveness of the strategies.

After the corporate strategic planning has been finalized, the process of human resources planning can
be started. This process proceeds as follows:

The corporate strategic plan must be in place.

Interpret the corporate strategic plans and determine the specific quantitative and qualitative
implications for human resources planning. Human resources planning consists of two components: namely
requirements or demand and availability or provision.

▪ Determine (estimate) the demand for human resources. Determine the numbers and types of
employees that will be needed.

▪ Determine (estimate) the availability or demand for human resources inside (internal sources:

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employees that are currently employed) and outside (external sources) the organization.

▪ Analyze the relationship between the demand for, and the availability of, employees. A surplus or a
shortage of employees may occur.

▪ If the projections show a surplus of employees, then the labor force must be reduced. The following are
some of the methods that can be used:

o Restricted hiring;

o Job sharing;

o Early retirement;

o Retrenchments;

o Reduced working hours;

Should projections show a shortage of employees, the organization must recruit the necessary number
and quality of employees outside the organization. External recruitment and selection is necessary in this
situation.

Because circumstances can change rapidly in the external environment, human resource planning is an
ongoing process.

What Is Human Resource Planning? Why is it Important?

Beyond a simple consideration as the workforce, the human resources of an organization represent the
sum of knowledge, skills, aptitude, creative abilities, and talents available to the enterprise, in addition to the
values, attitudes, and benefits that each individual contributes to the business.

Human resource planning is a systematic and strategic process aimed at evaluating the current state
of an organization’s human resources and predicting its future workforce requirements. Also known as
workforce planning, human resource planning helps organizations recruit, retain, and optimize the deployment
of people they require to meet strategic business objectives and respond to changes in the market and the
general environment.

Human resource planning is the process whereby organizations determine the staffing support they will
need to meet business needs and customer demands. There are a variety of considerations that impact this
planning, including impending retirements and transitions, the availability of employees with certain skills sets
and changes in the environment that may require training for existing employees.

This is the process during which a balance is obtained between internal and external provision or supply
of people with possible job vacancies that are expected for a specific period in the organization. There is,
however, an increasing imbalance between the emerging posts and the availability of people to fill those posts.
The labor pool is changing as a result of rapid technological changes and increasing globalization. Human
resources planning is necessary to handle this problem effectively.

A key part of human resource planning is projecting future workforce requirements and developing
strategies for deploying this talent to avoid skills shortages or surpluses proactively. The aim is to achieve a
balance of skills based on the needs and objectives of the enterprise. HR planning must, therefore, be a
continuous process, with a structure and monitoring system that enables the organization to provide sufficient
lead time for the recruitment and training of employees to meet its future requirements.

For further reading, you may search for these sites:

https://www.investopedia.com/terms/h/human-resource-planning.asp
https://itchronicles.com/human-resources/why-is-human-resource-planning-important/
https://study.com/academy/lesson/human-resources-planning-advantages-importance.html

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Study Guide in BAC 101 – HUMAN RESOURCE MANAGEMENT Module No. 4

Now, let us move on to Forecasting Manpower Demand and Supply

Predicting the need for labor has been an essential indicator of a company’s progress. No matter the size, the
company will need to conduct a forecast of its labor needs.

Human Resource supply forecasting is the process of estimating availability of human resource followed after
demand for testing of human resource. For forecasting supply of human resource, we need to consider internal
and external supply. Internal supply of human resource available by way of transfers, promotions, retired
employees & recall of laid-off employees, etc. Source of external supply of human resource is availability of
labor force in the market and new recruitment.

Human resource (HR) demand forecasting is the process of estimating the future quantity and quality of people
required. The basis of the forecast must be the annual budget and long-term corporate plan, translated into
activity levels for each function and department. In a manufacturing company, the sales budget would be
translated into a production plan giving the number and type of products to be produced in each period. From
this information, the number of hours to be worked by each skilled category to make the quota for each period,
would be computed. Once the hours are available, determining the quality and quantity of personnel will be the
logical step.

The following are the HR Forecasting Techniques:

1. Ratio-trend Analysis
2. Regression Analysis
3. Work-study Techniques
4. Delphi Techniques
5. Flow Models
6. Other Forecasting Techniques

For further reading, you may search for these sites:

http://www.whatishumanresource.com/hr-supply-forecasting
https://www.managementstudyhq.com/demand-forecasting-in-human-resource.html

LEARNING ACTIVITY 4

⮚ ng the current state of an organization’s human resources and predicting its future workforce
requirements. The aim of HRP is to aid managers place the employees where they are most-fitted
(qualification-wise) for the company to achieve its strategic goals.
⮚ Strategic planning is an organization’s process of formulating and implementing its strategies and
assessing the effects to its internal and external environment.
⮚ A key part of human resource planning is projecting future workforce requirements and developing
strategies for deploying this talent to avoid skills shortages or surpluses proactively. The aim is to
achieve a balance of skills based on the needs and objectives of the enterprise.
⮚ Human Resource supply forecasting is the process of estimating availability of human resource followed
after demand for testing of human resource. For forecasting supply of human resource, we need to
consider internal and external supply
⮚ Human resource (HR) demand forecasting is the process of estimating the future quantity and quality
of people required. The basis of the forecast must be the annual budget and long-term corporate plan,
translated into activity levels for each function and department.

REFERENCES

Lauron, D.P. (2019). Human Resources Management (Principles and Practices). Manila, Philippines: Rex
Bookstore.

Diamante, M. M. (2015). Managing Human Resources Local and Global Perspectives (Outcomes-Based
Learning). Manila, Philippines: C&E Publishing, Inc.

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Study Guide in BAC 101 – HUMAN RESOURCE MANAGEMENT Module No. 4

Marchington, M. (2016). Human Resource Management at Work (6 th edition). Broadway London: Chartered
Institute of Personnel and Development (CIPD)

3G ELearning FZ LLC. (2016) Human Resource Management in Small Business. Unired Arab Emirates

Ferrer, M.P., et.al. (2015). Human Resource Management. Manila, Philippines:, Unlimited Books
Library Services and Publishing Inc.

Barboza, N., et. al (2019) Job Analysis and Design. Manila, Philippines:, Unlimited Books Library
Services and Publishing Inc.

Electronic Sources:

Human Resource Planning

Retrieved from:
https://www.investopedia.com/terms/h/human-resource-planning.asp

Human Resource Planning

Retrieved from:
https://www.investopedia.com/terms/h/human-resource-planning.asp

Human Resource Planning

Retrieved from:
https://lms.tuit.co.za/courses/105/pages/human-resource-planning?module_item_id=6890

Why Is Human Resource Planning Important?

Retrieved from:
https://itchronicles.com/human-resources/why-is-human-resource-planning-important/

Human Resources Planning: Advantages & Importance

Retrieved from:
https://study.com/academy/lesson/human-resources-planning-advantages-importance.html

HR Supply Forecasting
Retrieved from:
http://www.whatishumanresource.com/hr-supply-forecasting

HR Demand Forecasting
Retrieved from:
https://www.managementstudyhq.com/demand-forecasting-in-human-resource.html

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