Human Resource

Planning

DMH-03

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Learning Outcomes

 Define HR planning
 Discuss the need for HR planning
 Describe how strategic planning could be integrated with HR planning
 Discuss how HR planning takes place at different levels and the process of HR planning
 Discuss guidelines for HR planning
 Identify strengths and weaknesses of human resource planning

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Introduction

 In hiring members to the organisation, it is vital to decide on the requirements that need to be
fulfilled
 In other terms it is about deciding on what the organisation is looking for individuals in
recruiting them for various positions
 HR planning determines the human resource needs of the whole enterprise and its every
department for a given future period for various operations envisaged in connection with
accomplishment of organisational objectives and goals

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Defining HR Planning

 “HR planning is the process-including forecasting, developing and controlling-by which a

firm ensures that it has the right number of people and the right kind of people at the right
places at the right time doing work for which they are economically most useful”

-Geisler-
 “The process of assessing the organisation’s human resource needs in the light of
organisational goals and making plans to ensure that a competent, stable workforce is
employed”
-Wendell French-

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Characteristics of HR Planning

 HR plan must include HR needs in light of organisational goals and objectives

 HR plan must be directed towards well defined objectives
 HR plan must ensure that the right kind of people, and the right number of people at the right
time are doing work for which they are economically most useful
 HR plan should pave the way for an effective motivational process

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Characteristics of HR Planning

 HR plan should take into consideration the periodic developments that take place and should
be accordingly extended to meet the requirements
 Adequate flexibility must be maintained to suit the changing needs of the organisation

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Need for HR Planning

 The rationale for HR planning stems from the idea that organisational success heavily
depends on human resources. If the right person does not do the right job it will affect
organisational performance
 Forecasting and auditing provides background information about internal factors and skill
requirements as well as vacancies according to which manpower planning could be done. The
normal wastage arising from death, turnover and superannuation should be considered

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Need for HR Planning

 HR planning enables managers to take into consideration emerging HR trends and

requirements in deciding on recruiting people in future
 HR planning will help to position employees appropriately taking into consideration lead
times taken for identifying shortages, recruiting people, selecting them etc.

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Need for HR Planning

 The significance of HR planning lies in:

 Not having more or less number of employees than required resulting in an unnecessary shortage or
cost of for the organisation
 Being able to plan training and development programmes to meet the skill requirements of people
based on changing environmental and organisational conditions

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Strategic Planning and HR Planning

 The starting point of HR planning is the organisation’s purpose or mission

 The strategic plan of the organisation describes the path the organisations intend to take in
achieving the organisational vision
 Human resources management plays a vital role in implementing the strategic plan
 The number and the quality of people being employed by the organisation would resemble
the organisational goals and objectives

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Strategic Planning and HR Planning

 If the HR plan is moving in one direction and the strategic plan is moving in a completely
different direction it is not possible to meet the organisational vision and objectives
 Hence HR planning has to be done in line with the strategic plan of the organisation

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HR Planning at Different Levels

 HRP at National Level

 This helps to plan for educational facilities, health care facilities, agricultural and industrial
development and employment plans etc.
 The government of the country plans for HR at National level
 It also plans for occupational distribution, regional and sectoral allocation of human resources

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HR Planning at Different Levels

 HRP at Sectoral Level

 HRP at sectoral level plans for human resources in a particular sector such as agriculture, industry
etc.
 It helps the government to allocate resources to different sectors depending on the priority accorded
to the particular sector
 HRP at Industry Level
 This takes into account the output of a particular industry and the manpower requirement to obtain
the same

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HR Planning at Different Levels

 HRP at Unit Level

 HRP at company level is estimating the HR needs of a particular company in question
 It is based on the business plan of the company
 A manpower plan avoids the sudden disruption that might occur due an issue of a shortage of a
particular type of labour essential for the company
 Knowing the requirements in advance enables the development of appropriate strategies

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HR Planning at Different Levels

 HRP at Departmental Level

 This looks at manpower needs at departmental level of the organisation

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HR Planning Process

1. Analyzing organizational plans and deciding objectives

2. Analyzing factors for manpower requirements
1. Demand forecasting
2. Supply forecasting
3. Developing employment plans
4. Developing human resource plans

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1. Analysing Organisational Plans and Deciding
Objectives

 Firstly short and long term objectives should be analysed

 The organizational plan is a blueprint of desired objectives and would incorporate the growth
rate of the company, diversification plans, market opportunities and government policies
 HRP should meet two requirements namely,
 It should be directly related to the essential nature of the organisation
 The changes in the selected factors should be proportional to changes in HR requirements

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2. Analysing Factors for Manpower
Requirements

 The existing job design and anaylsis may thoroughly be reviewed keeping in view the future
capabilities, knowledge and skills of employees
 Manpower requirements have to be analysed in two ways:
 Demand forecasting
 Supply forecasting

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2. Analysing Factors for Manpower
Requirements

 Demand forecasting: the process of estimating the future requirements of manpower by

function or by level of skill
 Two kinds of forecasting techniques are used namely judgmental forecasts and statistical
projections
 Judgmental forecasts: the traditional method where forecasts are made based on the
judgment of managers and executives

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2. Analysing Factors for Manpower
Requirements

 Statistical forecasts: using statistical methods such as ratio-trend analysis, econometric

model, work study technique to forecast the requirements
 Supply forecasting: this is about the availability of human resources within and outside the
organisation
 Firstly it is needed to obtain information regarding the available human resources at present
 Could take HR audits, employee wastage and internal promotions into consideration

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3. Developing Employment Plans

 After deciding on the number it is important to determine the nature of the job through job
description and job specification
 Job description: will describe the work performed, responsibilities, skills and training
required, conditions under which the job has to be performed
 Job specification: this is the output of job description, would cover minimum qualifications
required (e.g. education, experience, mental skills, personality factors

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4. Developing a Human Resource Plan

 Net human resources should be determined in terms of demand and supply for human
resources
 Adjustments begin when the demand and supply are identified
 When the internal supply is higher, recruiting from outside is stopped and when the demand
outweighs supply external recruitments are made
 Also when the general demand is higher than the supply focus would be on retaining
employees as well

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Advantages of HR Planning Programmes

 Improvement of labour productivity: through HR planning it is possible to identify methods

of satisfying employees as well as making the right person available for the right job
 Adjusting with rapid technological change: through HR planning it is possible to forecast the
requirements of HR and recruit people who suit the requirements
 Reducing labour turnover: efficient manpower planning enable the reduction of skilled and
experienced people leaving the organisation

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Advantages of HR Planning Programmes

 Control over recruitment and training cost: highly capable people are in short supply and will
have to incur a high cost in recruiting them and proper manpower planning will help reduce
this cost
 Helps facilitate expansion programmes: as the company grows proper manpower planning
would enable the organisation to meet HR needs appropriately

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Limitations of HR Planning Programmes

 Inaccuracy: the forecasts made could be inaccurate due to various reasons resulting in wrong
decisions being made on manpower requirements
 Uncertainties: technological uncertainties and market fluctuations could impact forecasting
 Lack of support: HR planning requires the support of all divisions and departments of the
organisation and when the appropriate support is not given HR planning might fail

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Limitations of HR Planning Programmes

 Number game: sometimes focusing too much on numbers could overlook the quality of
people being absorbed to the company
 Inefficient information systems: information systems that do not give proper information
could result in inaccurate manpower planning processes
 Time and expenses: manpower planning is an expensive and time consuming task

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Questions and Discussion

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