Human Resource Planning

Human Resource Planning



Workforce (or employee or personnel)planning is the process of deciding what positions the firm will have to fill, and how to fill them. Its aim is to identify and address the gaps between the employer’s workforce today, and its projected needs.

Steps in Recruitment And Selection Process



Objectives of Human Resource Planning

Objectives of Human Resource Planning include following
Human resource planning is necessary :

-To ensure optimum use of existing HR.
-To forecast future requirement for HR.
-To provide control measures to ensure that necessary HR are available as and when required.
-To assess the surplus and shortage of HR (Downsizing).
-To anticipate the impact of technology on jobs and HR.
-To determine the level of the recruitment and training
-To estimate the cost of HR.
-To meet the needs of expansion  and diversification programs.

Some specific uses of HRP
-Quantify job for producing product.
                           - future staff-mix
                           - people & position
-Assess staffing levels to avoid unnecessary costs
-Reduce delays in procuring staff
-Prevent shortage/excess of staff
-Comply with legal requirements.

Forecasting personnel needs
The basic process for forecasting personnel needs is to forecast revenues first. Then estimate the size of the staff required to support this sales volume.

Human Resource Demand Forecast
This is the process of estimating future quantity and quality of manpower required for an organization.
-HR demand forecasting tools
The basic tools for projecting personnel needs include
-Trend analysis
-Ratio analysis
-Scatter plot
-Markov analysis
-Managerial judgement
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-Trend Analysis: Study of a firm’s past employment needs over a period of years to predict future needs.
-Ratio Analysis: A forecasting technique for determining future staff needs by using ratio between,
     1. some casual factors (like sales volume )
     2. the number of employees required (such as number of sales people needed)
for example, suppose a salesperson traditionally generates $50,000 in sales. If the sales revenue to salespeople ratio remain the same, you would require six new salespeople next year to produce a hoped-for extra $300,000 in sales.

-Scatter plot: a graphical method used to help identify the relationship between two variables.

-Markov Analysis: it’s a mathematical process known as Markov analysis or Transition matrix to forecast availability of internal job candidates.  Its involves creating a matrix that shows the probabilities that employees in the chain of feeder positions for a key job will move from position to position and therefore be available to fill the key position.

-Managerial Judgement: Few historical trends, ratios, or relationships will continue unchanged into the future. Judgment is thus needed to adjust the forecast. Important factors that may modify your initial forecast of personnel requirements include decisions to upgrade quality or enter into new markets; technological and administrative changes resulting in increased productivity; and financial resources available, for instance, a projected budget crunch.

Forecasting supply of personnel
Forecasting HR supply

Process of estimating future quantity and quality of manpower available internally & externally to an organization.




Personnel replacement charts
Company records showing present performance and promotability of inside candidates for the most important positions.

Position replacement cartd
A card prepared for each position in a company to show possible replacement candidates and their qualifications.

Matching demand and supply of personnel

To match labor demand and supply, HRP
 - 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.
Succession planning: The ongoing process of systematically identifying, assessing, and developing organizational leadership to enhance performance.
Requisite for Successful HRP
-HRP must be recognized as an integral part of corporate planning.
-Backing from top management.
-Personnel records should be complete, up-to-date and readily available.
-Plan by skill levels rather than by aggregates.

A special case in HRP: Retrenchment
-Many organizations today are facing a very different environment – one of decline. Not surprisingly,
retrenchment carries with it different implications for Human Resource Planning.
1.Outplacement
2.Layoffs
3.Leave of absence without pay
4.Loaning
5.Reduce work hours
6.Attrition
7.Work sharing


Common Pitfalls in HRP
-The identity crisis
-Sponsorship of top management
-Size of initial effort
-Coordinating with other management and HR functions
-Integration with organization plan
-Quantitative vs Qualitative approach
-Non-involvement of operating managers
-The technique trap.

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