Human Resource Planning Process
Introduction of Human Resource Planning
Human resources undoubtedly play the most important part in the functioning of an organization. The
term ‘resource’ or ‘human resource’ signifies potentials, abilities, capacities, and skills, which can be
developed through continuous interaction in an organizational setting.
The interactions, interrelationships, and activities performed all contribute in some way or other to
the development of human potential. Organizational productivity, growth of companies, and
economic development are to a large extent contingent upon the effective utilization of human capacities.
Hence, it is essential for an organization to take steps for effective utilization of these resources. In
the various stages in the growth of an organization, effective planning of human resources plays a key
role. Matching the requirements of the job with the individual is important at all stages, including the
recruitment procedures, in this endeavour.
When organizations contemplate diversification or expansion, or when employees have to be
promoted, human resource planning plays an important role. Further, the organizational plans, goals,
and strategies also require effective human resource planning.
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.
Human resource planning (HRP) is the first step in the HRM process. HRP is the process by which an
organization ensures that it has the right number and kind 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 objectives.
HRP translates the organization’s objectives and plans into the number of workers needed to meet
those objectives. The actual HRM process starts with the estimation of the number and kind of people
required by the organization for the coming period.
HRP is simply not a process of matching the supply of people (existing employees and those to be
hired or searched for) with openings the organisation expects over a given timeframe. It goes a step
further in order to reach out to right kind of people at right time, spending time, resources and
energies. Without careful planning, advance thinking and prompt actions, it is next to impossible to
get competent and talented people into the organisation.
Human resource planning is the responsibility of both the line and the staff manager. The line manager
is responsible for estimating manpower requirements. For this purpose, he provides the necessary
information on the basis of the estimates of the operating levels. The staff manager provides the
supplementary information in the form of records and estimates.
7 Steps in Human Resource Planning Process
1. Analyzing Business Objectives and Policies
The initial step in the HRP process is the analysis of business objectives. The HR manager will conduct
a detailed analysis of the business’s vision and mission. Subsequently, design the HRP objectives and
policies in the direction of the firm’s goals. One must try to estimate and reach the justified quantity
of human resources.
In this step, the managers create policies on the following HR processes:
 Sources of recruitment, i.e. internal or external recruitment.
 The selection procedure, training & development program, etc.
 Review and restructure the existing job roles strategically.
 Adoption of downsizing or rightsizing to remain competitive.
 Automation of processes and their impacts.
2. Study Existing Manpower Inventory
It is the second step after mapping out HRP objectives and policies.
The managers need to study their existing workforce skills and capabilities. We must find out
whether the present staff can fulfill the future demand.
We must consider the following factors at the time of the manpower inventory study:
 Skills and capabilities of the employees.
 Analysis of the demographic characteristics of the employees.
 Productivity, Creativity and Absenteeism in the previous year.
 Eligibility for the current and future job profile, etc.
3. Forecasting Demand and Supply
a) Demand Forecasting
With the ever-changing environment, the HR demand varies from time to time. We must anticipate
the future HR requirements to achieve multiple goals. The managers find out the number of people
with adequate skills to develop a staff mix. In this stage, we can make projections regarding:
 Addition of new job roles.
 Creation of Vacancies.
 Prevent a shortage of people.
 Number and kind of personnel required for production and management.
 Right quantity of personnel to meet business long-term goals, etc.
Techniques for Demand Forecasting:
1. Managerial Judgement
2. Ratio/Trend Analysis
3. Regression Analysis
4. Work-study Techniques
5. Delphi Technique
6. Flow Model
b) Supply Forecasting
After demand forecasting, we must assess the firm’s capabilities to supply the required workforce.
Managers may procure personnel from within and outside the firm.
An alternative name for supply forecasting is Bench Forecasting.
Sources of human resources supply:
1. Existing Workforce
2. Internal Supply
3. External Supply
We must analyze the sufficiency of the existing workforce first. After that, go for the internal and
external sources of supply. Supply forecasting helps in estimating:
 Staff mixes for the future.
 It helps to prevent excess or shortage of manpower.
 The number of personnel required to fill the planned positions.
Techniques for Supply Forecasting:
1. Staffing Tables
2. Markov Analysis
3. Skills Inventory
4. Replacement Chart
4. Performing Gap Analysis
Here, the net human resource requirement is to be estimated. For this, we need to reconcile the
forecasted demand and supply. Variance calculation between future demand and supply is known
as Gap Analysis. Both qualitative and quantitative gap is investigated. The result of this analysis is
either Surplus or Deficit of human resource requirements.
 Deficit: It depicts the number of personnel to be recruited.
 Surplus: It suggests the number of personnel to be terminated.
5. Formulating and Implementing HRP
An action plan is formulated and implemented based on the gap analysis. The HR manager may take
the following actions:
In the case of Surplus:
 Hold hiring
 Reduce working Hours
 Offer voluntary retirement
In case of Deficit:
 Recruit new employees
 Retain employees
 Transfers & Promotions
 Train existing employees
6. Training and Development
It is the next step after the successful implementation of the action plan. Training & development
programs are organized for fresh recruits. These programs help employees develop the required skills
to perform their job efficiently. Training is of two types:
1. General Training
2. Specific Training
7. Evaluation and Control
It is the last and final step in the human resource planning process. One must test whether the
implementation of the action plan meets the HRP objectives.
Timely review and control help in error detection and taking corrective measures.
Advantages
HRP process is advantageous to firm in following ways:
 It is an essential constraint Succession Planning procedure.
 Find out the Surplus or Deficit in the manpower inventory of the business.
 Helps in reducing unnecessary job positions from the organizational structure.
 The HRP process helps cut costs, which also results in improved efficiency.
 It enables HR managers to make optimum use of firms’ resources.
Factors Affecting the Human Resource Planning Process
Internal Factors
1. Forecasts Regarding Business
The business forecasts will affect the HRP process. For instance, layoffs as a result of
decreased profitability.
2. Expansion
It analyzes and identifies the exact demand for human resources within the business.
3. Management Policies
Management policies lay a significant impact on the HRP process. It consists of training
employees for operating new machinery, skill development programs, etc.
4. Type of the Organization
The requirement of the workforce varies in different forms of organizations. A big firm needs
huge manpower, whereas a small-sized firm needs less workforce.
External Factors
1. Government Policies
Any change in labor law directly affects the HRP process. It may include changes in minimum
wage rate, etc.
2. Demographic Changes
Demographics include factors like education & culture. The HR managers have to plan
policies according to the changes in these factors.
3. Competition
To remain competitive, managers need to recruit a qualified workforce. The right personnel
at the right place, working with maximum productivity.
4. Economic Conditions
The economic slowdown in the county leads to layoffs in many organizations.
5. Technology
The technical changes and automation result in a decreased demand for the workforce.
Conclusion
Human resource planning is the process of determining its human resource needs and optimum use
of an organization’s human resources. Human resource planning is one of the most important
elements in a successful human resource management program.
Because it 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 to achieve its overall strategic objectives. Human resources
planning then ultimately translates the organization’s overall goals into the number and types of
workers needed to achieve those goals.
Without clear-cut planning and a direct linkage to the organization’s strategic direction, estimating an
organization’s human resource needs is reduced to mere guesswork. This means that human resource
planning cannot exist in isolation. It must be linked to the organization’s overall strategy.
So for achieving optimum use of an organization’s human resources, a systematic process of human
resource planning is essential.
Reference
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