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Human Resources Planning Process
Human Resources Planning Process
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HUMAN RESOURCE PLANNING PROCESS
The process of anticipating an organization’s future human resource needs and then
developing action plans for fulfilling identified needs. The systematic review of human
resource requirements getting the right people at the right place at the right time.
i. Objectives of Human Resource Planning
Enable organizations to anticipate their future HR needs to identify practices that will help
them meet those needs
ii. Benefits of HR Planning
• Helps in planning job assignments
• Helps cope with fluctuations in staffing
• Identifies recruiting needs
• Provides other useful information
iii. Planning Includes Forecasting
Forecasting is carried out in two basic areas which are demand forecast of workforce for
organization and supply forecast for the organization
Following approaches are used to perform this function or activity:
• Statistical approaches
a) Trend analysis
b) Ratio analysis
c) Regression analysis
• Judgmental methods
a) Managerial judgment
Forecasting Involves Two Activities
• Monitoring current HR programs and personnel staffing levels
• Investigating future HR needs and concerns
Forecasting Human Resource Requirements
A requirements forecast is an estimate of the numbers and kinds of employees the
organization will need at future dates in order to realize its goals. Several techniques of
forecasting human resource requirements and availability are currently being used by
organizations.
a. Zero-Base Forecasting
This method uses the organization’s current level of employment as the starting point for
determining future staffing needs. The key to zero-base forecasting is a thorough analysis of
human resource needs.
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HUMAN RESOURCE PLANNING PROCESS
b. Bottom-Up Approach
A forecasting method in which each successive level of the organization, starting with the
lowest, and forecasts its employee requirements in order to, ultimately, provide an aggregate
forecast of employment needs.
c. Use Of Mathematical Models
Mathematical models can assist in forecasting HR requirements. The relationship between
sales demand and the number of employees needed is a positive one.
d. Simulation
It is a technique for experimenting with a real-world situation through a mathematical model
representing that situation. A model is an abstraction of the real world.
Forecasting Human Resource Availability
Determining whether the firm will be able to secure employees with the necessary skills and
from what sources these individuals may be obtained is called an availability forecast.
Surplus of Employees Forecasted
When a comparison of requirements and availability indicates a worker surplus will result,
restricted hiring, reduced hours, early retirements, or layoffs may be required to correct the
situation.
a. Restricted Hiring
When a firm implements a restricted hiring policy, it reduces the workforce by not replacing
employees who leave.
b. Reduced Hours
Reaction to a declining demand can also be made by reducing the total number of hours
worked. Instead of continuing a 40-hour week, management may decide to cut each
employee’s time to 30 hours.
c. Early Retirement
Early retirement of some present employees is another means of reducing the supply of
workers.
d. Layoffs
At times, the firm has no choice but to actually lay off part of its workforce.
Shortage of Workers Forecasted
Faced with a shortage of workers, many organizations had to intensify their efforts to recruit
the necessary people to meet the needs of the firm. Some actions that were taken included:
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HUMAN RESOURCE PLANNING PROCESS
a. Creative Recruiting
A shortage of personnel often means that new approaches to recruiting must be used. The
organization may have to recruit in different geographical areas than in the past, explore new
methods, and seek different kinds of candidates.
b. Compensation Incentives
Firms competing for workers in a high-demand situation may have to rely on compensation
incentives. Premium pay is one obvious method. However, this approach may trigger a
bidding war that the organization cannot sustain for an extended period. More subtle forms of
rewards may be required to attract employees to a firm, such as four-day workweeks, flexible
working hours, telecommuting, part-time employment, and child care centres.
c. Training Programs
Special training programs may be needed to prepare previously unemployable individuals for
positions with a firm. Remedial education and skills training are two types of programs that
may help attract individuals to a particular company.
d. Different Selection Standards
Another approach for dealing with shortages of workers is the lowering of employment
standards. Selection criteria that screen out certain workers may have to be altered to ensure
that enough people are available to fill jobs. For instance, instead of desiring extensive work
experience, a firm may be willing to hire an inexperienced worker and train him or her to do
the job.
Succession Planning and Development
a. Succession Planning
The process of ensuring that a qualified person is available to assume a managerial position
once the position is vacant.
b. Succession Development
The process of determining a comprehensive job profile of the key positions and then
ensuring that key prospects are properly developed to match these qualifications.
c. THE GOAL OF HR PLANNING
The goal of forecasting and planning is to keep a stable workforce that meets needs of the
organization.
d. STEPS IN HRP PROCESS
• Determine the impact of organizational objectives on specific organizational unit
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HUMAN RESOURCE PLANNING PROCESS
• Define the skills required to meet objectives (demand for Human Resource) Determine
additional human resource requirements in light of current HR (net HR requirements)
• Develop action plan to meet the anticipated HR needs
e. Importance Of HRP
HRP has become more important in recent years for a number of reasons like:
• Globalisation of Business
• New Technologies
• The changing skill levels in the Workforce
• The changing demographics of the workforce
• Mergers and Acquisitions
• Legal developments
f. Requirements for effective HR planning
Successful HR planning requires:
• HR personnel understand the HR planning process
• Top management is supportive
• The communications between HR staff and line management are healthy
• The HR plan is integrated with the organization’s strategic business plan
Linking HR planning practices to competitive advantage
Effective HR planning provides best options for supply of workforce of the organization and
s stated in earlier chapters if organization is able to have efficient and effective workforce it
will be have competitive advantage.