Human Resource Planning

ROHIT KUMAR

Human Resource Planning

 Human Resource Planning
Human resource planning may be defined as a
strategy for the acquisition, utilization, improvement
& preservation of the human resource of the enterprise.

Specifically HRP is the process by which an organisation

ensures that it has the right no. & kind of people, at the
right places at the right time, capable of effectively
completing those tasks that will help the organisation
achieve its overall objective.
The major activities of HRP include:
– Forecasting
– Inventoring
– Anticipating
– Planning

Human Resource Planning

 Human Resource Planning
• Human Resources Planning (HRP)
– Process of anticipating and making provision for the
movement (flow) of people into, within, and out of an
organization.
– HRP’s purpose is the effective deployment of human
resources through:
• Anticipating organizational labor supply and demand.
• Providing expanded employment opportunities for women,
minorities, and the disabled.
• Guiding the development and training the workforce.

Human Resource Planning

 Objectives of HRP
• To ensure optimum use of human resources
currently employed
• To link HRP with Organizational planning
• To meet the need of expansion programmes
• To identify areas of surplus personnel or area
in which there is a shortage of personnel
• To determine recruitment levels
• To replace those who have grown old, retired, died
or become incapacitated because of
physical/mental ailment.

Human Resource Planning

Interaction Between Business Planning
& Human Resource Planning
Business Planning Human Resource Planning
Strategic planning Environmental scanning
Long range
Cor. Philosophy Labour supply analysis
Planning Labour force changes
Mission
Strengths & weakness Legal/regulatory agency changes

Forecasting
Operational planning
Middle range Projected personnel need by
Organisational goals & job category
Planning objective
Attrition

Budgeting Projected staffing requirement

Short range Budgets Surplus/deficit
Planning
Performance goals Succession Planning
Annual plans
Human Resource Planning
Human Resource Planning

Forecast
demand
for labor
Conduct analysis

Forecast
internal supply
of labor
Forecast
external
Develop plan to supply of
match demand labor
with supply

Human Resource Planning

 Forecasting Employee Needs
• This requires estimation of the demand for labor that
answers these three questions:
– What employees will be needed in future
– What kinds of skills & talents will the employees need
– When will the new employees be needed

• Forecasting Employee Needs involves two quite

different time periods: short term forecasting & long
term forecasting.
Short Term Forecasting Long Term Forecasting
Budgeting Unit demand
Work-load Analysis Expert Opinion
Trend Projection

Human Resource Planning

Forecasting Demand for Employees

Quantitative
QuantitativeMethods
Methods

Forecasting
Forecasting Demand
Demand

Qualitative
QualitativeMethods
Methods

Human Resource Planning

Quantitative Approach: Trend Analysis

• Forecasting labor demand based on an organizational index

such as sales:
– Select a business factor that best predicts human resources
needs.
– Plot the business factor in relation to the number of
employees to determine the labor productivity ratio.
– Compute the productivity ratio for the past five years.
– Calculate human resources demand by multiplying the
business factor by the productivity ratio.
– Project human resources demand out to the target year(s).
Human Resource Planning
 Example of Trend Analysis of HR
Demand
BUSINESS  LABOR = HUMAN RESOURCES
FACTOR PRODUCTIVITY DEMAND
YEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)

1997 $2,351 14.33 164

1998 $2,613 11.12 235
1999 $2,935 8.34 352
2000 $3,306 10.02 330
2001 $3,613 11.12 325
2002 $3,748 11.12 337
2003 $3,880 12.52 310
2004* $4,095 12.52 327
2005* $4,283 12.52 342
2006* $4,446 12.52 355
*Projected figures
Human Resource Planning
 Qualitative Approaches to Demand
Forecasting
• Management Forecasts
– The opinions (judgments) of supervisors, department
managers, experts, or others knowledgeable about the
organization’s future employment needs.
• Delphi Technique
– An attempt to decrease the subjectivity of forecasts by
soliciting and summarizing the judgments of a preselected
group of individuals.
– The final forecast represents a composite group judgment.

Human Resource Planning

Forecasting Internal Labor Supply

The next step in developing a human resource

planning system is to analyze the organization's
present workforce which constitutes of :
– Staffing Tables
– Markov Analysis
– Skill Inventories
– Replacement Charts
– Succession Planning

Human Resource Planning

Forecasting Internal Labor Supply

• Staffing Tables
– Graphic representations of all organizational jobs,
along with the numbers of employees currently
occupying those jobs and future (monthly or
yearly) employment requirements.
• Markov Analysis
– A method for tracking the pattern of employee
movements through various jobs.

Human Resource Planning

 Forecasting Internal Labor Supply
• Skill Inventories
– Files of personnel education, experience, interests,
skills, etc., that allow managers to quickly match job
openings with employee backgrounds.
• Replacement Charts
– Listings of current jobholders and persons who are
potential replacements if an opening occurs.
• Succession Planning
– The process of identifying, developing, and tracking
key individuals for executive positions.

Human Resource Planning

An Executive Replacement Chart

Human Resource Planning

 Projected Staffing
Requirements
• This analysis involves a comparison of the supply &
demand for labor as well as an assessment of how
many employees will leave.
– Net Projections
– Turnover Analysis
– Surplus Personnel
• Layoffs
• Attrition
• Reduced hours
• Early Retirements
– Management Succession & Development

Human Resource Planning

Human Resource Planning
Model
Forecasting Demand
Considerations
Considerations Techniques
Techniques
• •Product/service • •Trend
(Shortage)
Product/servicedemand
demand Trendanalysis
analysis
• •Technology • •Managerial Recruitment
Technology Managerialestimates
estimates
• •Financial
Financialresources
resources • •Delphi technique
Delphi technique
Full-time
• •Absenteeism/turnover
Absenteeism/turnover Part-time
• •Organizational
Organizationalgrowth
growth Recalls
• •Management philosophy
Management philosophy
Techniques
Techniques External
ExternalConsiderations
Considerations (Surplus)
• •Staffing
Staffingtables • •Demographic
Demographicchanges
tables changes Reductions
• •Markov
Markovanalysis • •Education
Educationofofthe
theworkforce
analysis
• •Skills inventories • •Labor Mobility
workforce Layoffs
Skills inventories Labor Mobility
• •Management • •Government Terminations
Managementinventories
inventories Governmentpolicies
policies
• •Replacement
Replacementcharts
charts • •Unemployment
Unemploymentrate rate
Demotions
• •Succession
SuccessionPlanning
Planning Retirements
Forecasting Supply

Human Resource Planning