Professional Documents
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It is the HRP process which helps the management of the organization in meeting the future
demand of human resource in the organization with the supply of the appropriate people in
appropriate numbers at the appropriate time and place.
Further, it is only after proper analysis of the HR requirements can the process of recruitment
and selection be initiated by the management. Also, HRP is essential in successfully achieving
the strategies and objectives of organization.
In fact, with the element of strategies and long-term objectives of the organization being
widely associated with human resource planning these days, HR Planning has now became
Strategic HR Planning.
Though, HR Planning may sound quite simple a process of managing the numbers in terms
of human resource requirement of the organization, yet, the actual activity may involve the
HR manager to face many roadblocks owing to the effect of the current workforce in the
organization, pressure to meet the business objectives and prevailing workforce market
condition. HR Planning, thus, help the organization in many ways as follows:
It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any
unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the
organization with a comprehensive HR assessment and planning to meet its future
requirements in the most cost-effective and timely manner.
Human resource planning may be viewed as foreseeing the human resource requirements
of an organisation and the future supply of human resources and- (i) making necessary
adjustments between these two and organisational plans; and (ii) foreseeing the
possibility of developing the supply of human resources in order to match it with
requirements by introducing necessary changes in the functions of human resource
management. In this definition, human resource means skill, knowledge, values, ability,
commitment, motivation, etc., in addition to the number/of employees.
It is the result of surplus labour that the companies later on offer schemes like Voluntary
Retirement Scheme (VRS) to eliminate surplus staff. Thus, it is better to plan well about
employees in advance. Through HRP, one can ensure the employment of proper number
and type of personnel.
HRP is the first step in all HRM functions. So, HRP provides the essential information
needed for the other HRM functions like recruitment, selection, training and
development, promotion, etc.
During the expansion and diversification drives, more employees at various levels are
needed. Through proper HRP, an organization comes to know about the exact
requirement of personnel in future plans.
Every organization suffers from the small turnover of labour, sometime or the other. This
is high among young graduates in the private sector. This necessitates again doing
manpower planning for further recruiting and hiring.
In order to protect the weaker sections of the society, the Indian Government has
prescribed some norms for organizations to follow. For example, reservations for SC/ST,
BC, physically handicapped, ex-servicemen, etc. in the jobs. While planning for fresh
candidates, HR manager takes into consideration all the Government guidelines.
Due to changing business environment, jobs have become more challenging and there is
an increasing need for dynamic and ambitious employees to fill the positions. Efficient
HRP is needed for attracting and retaining well qualified, highly skilled and talen ted
employees.
(ii) Anticipation of deficient or surplus manpower and taking the corrective action.
(v) To manage the challenges in the organization due to modernization, restructuring and
re-engineering.
a. External Factors:
i. Government Policies – Policies of the government like labour policy, industrial relations
policy, policy towards reserving certain jobs for different communities and sons-of the
soil, etc. affect the HRP.
ii. Level of Economic Development – Level of economic development determines the level
of HRD in the country and thereby the supply of human resources in the future in the
country.
iv. Level of Technology – Level of technology determines the kind of human resources
required.
v. International Factors – International factors like the demand for resources and supply
of human resources in various countries.
vi. Outsourcing – Availability of outsourcing facilities with required skills and knowledge
of people reduces the dependency on HRP and vice-versa.
b. Internal Factors:
iii. Job analysis – Fundamentally, human resource plan is based on job analysis. Job
description and job specification determines the kind of employees required.
iv. Time horizons – Companies with stable competitive environment can plan for the long
run whereas the firms with unstable competitive environment can plan for only short -
term range.
v. Type and quality of information – Any planning process needs qualitative and accurate
information. This is more so with human resource plan; strategic, organisational and
specific information.
vi. Company’s production operations policy – Company’s policy regarding how much to
produce and how much to buy from outside to prepare a final product influence the
number and kind of people required.
vii. Trade unions – Influence of trade unions regarding number of working hours per
week, recruitment sources, etc., affect the HRP.
Different institutions make HRP at different levels for their own purposes, of which
national level, industry level, unit level, departmental level and job level are important.
o National level – Generally, government at the centre plan for human resources
at the national level. It forecasts the demand for and supply of human
resource, for the entire nation.
o Job level – Manpower needs of a particular job family within department like
Mechanical Engineer is forecast at this level.
Along with capital and other factors of production, human resources can lead to increase
in production and economic development. The rate of growth of human resources is
determined by two aspects quantitative and qualitative.
a. Population Policy:
Some population policies operate by influencing the factors responsible for growth such
as fertility, marriage and mortality. These are known as population influencing policies.
Another category of policies known as responsive policies are implemented to adjust to
observed population trends with the help of programmes like health, nutrition, education,
housing, etc. The aim of population policies is to achieve an optimum population for
enhancing the country’s development.
b. Population Structure:
c. Sex Composition:
Sex ratio is the ratio of males to females in the population. It is the basic measure of the
sex composition of the population of any area. Higher the number of females, higher will
be the population growth rate in future.
d. Age Composition:
It is the distribution of population by age groups. Age composition is the result of past
trends in fertility and mortality. The supply of labour depends on age composition as
economically active population falls in range of 15-65 age groups.
e. Migration:
Net migration is another factor which causes changes in the population. Age and sex
composition determine the natural growth in population, but for calculating the overall
changes in population it is important to consider net migration also.
The population of any country consists of workers and non-workers. The workers are the
people, usually in age group of 15-65, who participate in economically productive
activities by their mental or physical presence.
These include:
i. Employers,
ii. Employees,
The others in the population are the non-workers such as students, infants, elderly,
beggars, retired people, inmates of jail or mental institutions, unemployed, etc. They do
not contribute to any productive economic activity. It is the changes in the work ing
population which affect the growth of human resources. The number of people who are
unemployed but available for work also impacts the availability of labour.
The quantitative dimensions help to ascertain human resources in numbers while the
productive power of human resources is assessed by the qualitative dimensions. For
example, there may be hundreds of applicants for 20 vacancies, but out of these only a
few may meet the quality standards required for the job.
The quantity and quality of education and training received by human resources impacts
their knowledge and skills. Education and training are important for the upliftment of
both individual and society. It can be of two types, formal and informal.
Formal education is imparted through schools and colleges while informal education and
training takes place through on-the-job training methods. Formal education stresses the
transfer of theoretical knowledge, while informal education emphasizes on practical
application of knowledge.
c. Equality of Opportunity:
Not all segments of people comprising human resources get equal employment
opportunities. There is bound to be some discrimination.
(iii) Regional discrimination – These are in form of discrimination between rural and
urban population or between people belonging to different regions/ states.
Discrimination affects the quality and productivity of the human resources belonging to
different sections of the population. The privileged classes get access to best education,
nutrition and health facilities while underprivileged are deprived of their right share in
the development process. For the overall, well rounded development of the country’s
human resources, effective policies need to be implemented to deal with the problem of
discrimination.
• Proper balance should be kept between the qualitative and quantitative approaches
to HRP.
8. HRP Process
The process of the HR planning begins with considering the organisational objectives and
strategies. Both external and internal assessments of HR needs and supply sources must
be done and forecasts developed. Key to assessing internal human resources is ha ving
solid information, which is accessible through a human resource information system
(HRIS).
The purpose of effective human resource planning is to ensure that a certain desired
number of persons with the correct skills will be available at some specified time in future .
The various steps involved in the human resource planning process can be logically
divided into three:
Though it is difficult to forecast the exact number of people required for future, still those
responsible for planning human resource requirements must be aware of the number of
basic factors which should be taken into consideration so that the forecasti ng can turn
out to be accurate to a certain extent-
It is important to know the long-range business plans for the firm, for example, if a firm
wants to go in for automation or wants to bring in more of computers and replace the
2. Demographics:
The likely changes taking place in the demographic profile of people in the years to come
is another important parameter which needs to be taken into consideration while working
out the human resource requirements as the overall rate of growth of the lab our force
depends to a large extent on the percentage of population in the age group of 18 to 65.
4. Technological Trends:
Advances in technology have definite effects on the nature and mixture of jobs available.
For example, advances in computer technology resulted in a decrease ill the number of
book-keepers, and an increase in the number of computer programmers. The use of
robots in place of some kind of human labour is also beginning to take off.
5. Social Trends:
In considering the above factors and making a specific long-range projection, one method
that can be utilised is termed as the “Delphi technique.” Essentially, it is a questionnaire
technique in which recognised experts are asked to make separately specific estimates of
human resource needs in the future.
Though long-range planning may appear to be a luxury to most firms, the HR executives
does require some lead time to provide the manpower required by the firm in the short
run-
Specific sales forecast for the coming year must be translated into a work plan for the
various parts of the enterprise. In the light of the sales forecast the requirements of
manpower for all other departments need to be worked out in the light of the production
program, purchase requirements, research and development and finance department
activities.
Some plans must be made concerning the amount of work that each segment of the firm
is expected to accomplish during some coming period and manpower requirements need
to be worked out accordingly.
The basic goals or objectives to be followed by the human resource department also play
an important role in working out the human resource requirements. For example if the
goal is to hire some minimum percentage of minorities or females in the workforce this
definitely will be taken into consideration while working out the human resource plan.
3. Relocations/Mergers/Acquisitions/Plant Closures:
The recession of the early 1990s saw major retrenchments on the part of many firms. The
reductions in workforce that follows such major changes as mergers, acquisitions,
relocations or plant closures are particularly stressful for not only the employees involved
but also for the HR executives.
The HR people should always be informed about such changes as soon as possible so
that they should be able to make arrangements to adjust the manpower wherever
required and ensure the termination of employees in a nice and congenial atmosphere.
1. Current Inventory:
Maintaining proper personnel records are essential to indicate the availability of talent in
various jobs, units and divisions within the firm. For example, an ‘inventory card’ should
be maintained by the organisations, so that whenever there is a requirem ent for human
resource the first thing an organisation should do is to check the availability from within.
2. Productivity Levels:
Future projection of resource needs are often made on the basis of past experience. As
technology improves the productivity levels of a workforce, the number of persons
required per unit of output will decline. So it is important for the organisation to consider
the productivity levels to forecast the future workforce requirements.
3. Turnover Rate:
The rate of turnover for the organisation is an important parameter affecting the human
resource planning for future. The turnover takes into consideration separations, quits,
discharges, retirement, death, replacements, etc. The rate of turnover can be calculated
with the help of formula, such as,
Turnover rate has to be taken into consideration because the management will be making
the arrangements for future manpower requirements keeping this into mind. An
organisation having a high rate of turnover will have to go for frequent hiring exercises
and vice versa.
4. Absenteeism Rate:
Absenteeism is the title given to a condition that exists when a person fails to come to
work when properly scheduled to work.
The most common measure is the percentage of scheduled time lost and is
computed as follows:
Absenteeism obviously reduces the number of personnel actually available for work. If
the monthly absenteeism rate is around 4 per cent, this means that on the average only
96 per cent of people are present each day and are ready to work.
Some jobs are sources of personnel for other jobs; for example, secretaries may be
obtained by the promotion of typist, and branch managers are obtained from a pool of
section managers through internal transfers. So it is important for the human resource
executives to take such internal movements into account before finalising the
All these factors clearly necessitate the need to take various things into account while
working out the resource supply for future.
1. Hiring:
In case projected supply is short of projected demand; the addition of new personnel is a
likely possibility. Keeping the rate of turnover and absenteeism and the movement
amongst various jobs into account the organisation has to work out the figures for
conducting their recruitment and selection drive.
In order to sharpen the skills of people on the job and to prepare them for transferring
them to higher positions in future it is important to impart training and develop ment to
them constantly.
3. Career Management:
It is to the advantage of both the employee and the firm that changes in job assignments
be planned to form a career. HR department should have some system of recording and
tracking career moves throughout the organisation.
4. Productivity Programs:
Improving productivity levels will increase the supply of human resources available
without increasing the number of personnel. Organised labour has also been involved in
the process to participating in improved quality of work life programs, and agreeing to
alter various work rules that hold down productivity.
5. Reductions in Workforce:
In case the projected supply of human resources is in excess of projected demand; the
firm may have to close plants and lay off personnel. A reduction in workforce is always a
difficult process for everyone – the employee, the management, the union, the
government, and the community. But in a competitive economy of today, such human
resource actions are not uncommon. So they need to be handled carefully.
The various techniques which are generally used for forecasting human resources
are:
In this method, time and motion study are used to analyze and measure the work being
done. With the help of such studies standard time required per unit of work is decided.
It is more appropriate for repetitive and manual jobs when it is possible to measure work
and set standards. Job methods should not change frequently.
In this method the managers prepare the forecast of human resource needs of various
categories in their department. This plan is applied in various departments where there
is necessity so that necessary amendments can be done with proper justification. Thi s
method is very simple in the preparation of human resource forecast.
Under this method ratios are calculated on the basis of past data. Future ratios are
calculated on the basis of time series analysis, after making changes in organisation,
methods and jobs. Moving average and exponential smoothing can be used for projection.
On the basis of establishment ratios the demand for human resource is estimated.
Work study method is more appropriate for repetitive and manual jobs when it is possible
to measure work and standards. Job methods should not change frequently.
This technique is used in group decision making in the present world. It can be used for
forecasting human resource needs in two forms i.e. it can be used to know the changing
trends of job profile across the country and this technique can be used in the organisation
about the changing profile of personnel in their departments according to the
environmental needs.
In other words, various factors influencing manpower needs are expressed in the form of
a formula. Several types of models can be used. These are complex and appropriate only
for large organizations.