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Human Resource Planning

The process of analyzing and identifying the need
for and availability of human resources so that the
organization can meet its objectives.
Human Resource Planning is a process of
determining and assuming that the organization
will have an adequate number of qualified persons
, available at the proper times , performing jobs
which meet the needs of the enterprise and which
provide satisfaction for the individuals involved.

Human resource planning
is a process by which an
organization ensures that
it has the right number and
kinds of people
at the right place
at the right time
capable of effectively and
efficiently completing those
tasks that will help the
organization achieve its overall
strategic objectives.

HRP Process
Organizational Objectives and Policies

HR Needs Forecast

HR Supply Forecast
HR Programming

HRP Implementation
Control and Evaluation of
Restricted Hiring,
Reduced Hours,
VRS etc

Recruitment and Selection

Environmental Scanning
The systematic monitoring of the external forces
influencing the organization:
Economic factors
Technological changes
Political and legislative issues

Organizational Objectives &


Downsizing / Expansion

Acquisition / Merger / Sell-out

Technology up gradation / Automation
New Markets & New Products

HR Demand Forecast
On the basis of corporate and functional plans, and
future activity levels, the future needs for human
resources in the organization are anticipated.
The number of people and the skill levels needed
in future depend on the production and sales
budgets in an organization.
It is necessary to make projections for new
positions to be created and vacancies arising in
current manpower.

Demand Forecasting Techniques

1. Managerial Judgment
In this method, managers estimate future human resource requirements, using their
experiences and judgment to good effect.
Two types of Managerial Judgment methods-Bottom-up forecasting and Top
down forecasting.
Delphi Technique

Ratio-Trend Analysis - Studying past ratios, ie No. of Workers vs. Volume of

Sales, forecasting future ratios and adjusting for future changes in the organization.

Demand Forecasting Techniques

2. Trend Analysis- HR needs can be estimated by
examining past trends
3. Workforce Analysis
The average loss of manpower due to leaves,
retirement ,death, transfer, discharge ,etc. ,during
the last 5 years may be taken into account.
The rate of absenteeism and labor turnover
should also be taken into account.

Demand Forecasting Techniques

4.Work-Load Analysis
It is used when it is possible to know how long
operations should take and the amount of labor
On the basis of workload of each plant during the
forthcoming years, workload analysis is done
considering the rates of absenteeism and labor

Demand Forecasting Techniques

5. Mathematical Models
Several mathematical models , with the aid of
computers are also used to forecast HR needs e.g..
Regression, optimization models, budget and
planning analysis.

HR Supply Forecast
Process of estimating future quantity and
quality of manpower available internally &
externally to an organization
Supply Analysis
Existing Human Resources
Internal Sources of Supply
External Sources of Supply

Internal Supply
Inflows & Outflows : The number of losses &
gains of staff is estimated.
Turnover Rate -refers to rate of employees
leaving. = ( No. of separations in a year / Avg no.
of employees during the year ) x 100.
Absenteeism :unauthorised absence from work =
( total absentees in a year / Avg no. of employees
x No. of working days) x 100

Internal Supply
Current personnel level : outflows + inflows =
internal supply
Inflows ( transfers, promotions)
Outflows (resignations, discharges, demotion,
retirements, promotions)

Supply Forecasting Techniques

1. Staffing Table
It shows the number of employees in each job . It
tries to classify employees on the basis of age, sex,
position , category, experience , qualifications,
skills ,etc.
A study of the table indicates whether current
employees are properly utilized or not.

Internal Forecasting Techniques

2. Markov Analysis
This technique uses historical rates of
promotions, transfer, and turnover to estimate
future availabilities in the workforce.
Based on past probabilities , one can estimate the
number of employees who will be in various
positions with the organization in the future.

Internal Forecasting Techniques

3. Skill Inventory
A skills inventory is an assessment of the
knowledge , skills , abilities , experience and career
aspirations of each of the current employees.
Once established , such a record helps an
organization to quickly match forthcoming job
openings with employee backgrounds.

Internal Forecasting Techniques

4. Replacement Charts
It shows the profile of job holders department wise
and offers a snapshot of who will replace whom if
there is a job opening.

Replacement Chart

External labour Supply

External recruitment

Selection & placement

Manpower Consultants,
Campus Recruitment,
Unsolicited Applications,
Employee Referrals

HR Programming/Manpower gaps
The existing number of personnel and their skills
(from HR inventory) are compared with the
forecasted manpower needs(demand forecasting).
This is done to determine the quantitative and
qualitative gaps in the workforce.
Vacancies filled in by the right employee at the
right time.

HR Plan Implementation
Recruitment, Selection & Placement
Training & Development
Retraining & Redeployment
Retention Plan
Downsizing Plan

Control & Evaluation

Are Budgets, Targets & Standards met?

Responsibilities for Implementation & Control
Reports for Monitoring HR Plan