Human Resource (HR) Planning
The process of analyzing and identifying the need for and availability
of human resources so that the organization can meet its objectives.
So Human resource planning is a process by which an
organization ensures that
Purpose of HRP
Reduces personnel costs
Provides a better basis for planning employee
Improves the overall strategic plan
Promotes awareness of HR planning at all levels
Provides tools for evaluation
Creates more opportunities for women and minority
groups in work plans.
Importance of Planning
• Deal with change--technological , social,
regulatory, and environmental
"if you don't know where you are going, any
road will get you there."
Factors That Determine HR Plans
Strategy of the organization
Culture of the organization
Current organizational Situation
Growth and Expansion of Business
Benefits of HR Planning
Lower HR costs through better HR management.
More timely recruitment for anticipate HR needs
Better development of managerial talent
Improve the utilization of human resources.
Make successful demand on local labor market.
Co-ordinate different HR programs
HR Planning Process
1st Step: Environmental scanning
External Forces are as follows
Employment opportunities vis-à-vis unemployment
1st Step: Environmental scanning
Internal Changes in Organizational Environment
Product mix and capacity utilization.
Acquisition and merger.
Activities of expansion operations and technological
Wages revision and bonus payment.
Working environment and conditions.
Changes in ownership and Boards of Directors.
Morale and motivation of new managers.
Reorganization and induction of new managers.
2nd: Organizational Objective and policies: HRP
need to be based on organizational objectives.
3rd: HR Demand Forecasting
Forecasting the Demand for Human
Demand forecasting is the process of estimating the quantity and quality of
people required to meet future needs of the organization
Trend Analysis: Study of firms past employment needs over a
period of years to predict future needs.
• Estimates—asking managers’ opinions, top-down or bottom-up
• Rules of thumb—using general guidelines
• Delphi technique—asking a group of experts
• Nominal groups—reaching a group consensus in open discussion
• Statistical regression analysis—
• Productivity ratios—units produced per employee
• Staffing ratios—estimates of indirect labor needs
Ratio Analysis: A forecasting technique for determining future staff needs
by using rating between production/ sale and employee needed.
4th: HR Supply Forecasting
The supply analysis covers
Existing human resources:
Internal sources of supply
External sources of supply
Skills Inventory: Audit of Non managers. Include-personal data, skill, salary &
job, company data, capacity of individual etc.
Management Inventory: Audit of Managers. It includes-Work history, strength
& weakness, carrier goal, personal data, previous duties etc.
Internal Sources:The techniques generally used for the purpose
Inflow and outflow
Movement among jobs
External Supply: University, college, Recruiting agency, open job market,
Experienced employee market. individuals after early retirement. Ex-Army
Steps of HRP
5th: Gap Analysis :
After the forecasting of HR demand and supply, the two
must be balanced.
Steps of HRP
6th: Solution Analysis:
Solution analysis is the development of strategies for
closing the gaps through applying different startegies
Recruitment & selection
Placement, Training and development
Downsizing plan etc..
6th: HR Plan Implementation
planning is the process of ensuring a suitable supply of
successors for current and future senior or key jobs. It
refers to the process of deciding how to fill the most
important executive posts in the organization.
includes the development of replacement charts
portray middle-to-upper level management positions that may
become vacant in the near future
lists information about individuals who might qualify to fill the
Successful HRP — the role of HR
• HR personnel to understand the role of HRP
• Top management to be supportive
• Not to start with an overly complex system
• Healthy communications between HR personnel
and line managers
• HR plan to be integrated with the organisation’s
• Balance between qualitative and quantitative
• An effective HRP is required for an organisation to be
• A complex system is not what’s required
• Measure of success of the system: if the right people
are available at the right time
• HRP needs to be fully in integrated to the
organisation’s business plan
• HR managers must be able to demonstrate the
success of HRP processes