informative

1. HRP Defined
 Human Resource Planning is the process of
systematically reviewing HR requirements to ensure
that the required number of employees, with the
required skills, are available when needed .
 The process of analyzing and identifying the need for
and availability of human resources so that
organization can meet its objectives.
 HRP is Proactive not Reactive

2. WHY HUMAN RESOURCE PLANNING
 Right number of people with right skills at right
place at right time to implement organizational
strategies in order to achieve organizational
objectives
 In light of the organization’s objectives, corporate
and business level strategies, HRP is the process of
analyzing an organization’s human resource needs
and developing plans, policies, and systems to satisfy
those needs

3. WHY HUMAN RESOURCE PLANNING
 Cost economics
 Capacity to operate effectively
 Capacity to undertake new enterprise
 Changed options

4. WHY HUMAN RESOURCE PLANNING
 Setting human resource objectives and deciding
how to meet them
 Ensuring HR resource supply meets human
resource demands

5. Strategic Objective of HRP
 To prevent overstaffing & Understaffing
 To ensure employee availability
 To ensure that organization is responsive to the
environment
 To provide direction to all HR activities
 To build line & staff partnership

6. Linking HRP to the Business Strategy
 Be familiar with the business strategy.
 Ensure that all traditional human resource
programs are satisfying the needs of functional
management.
 Identify the human resource implications of the
organization’s business strategy.

7. Linking HRP to the Business Strategy
 Identify those human resource issues that may affect
business objectives.
 Convert business objectives into human resource
objectives that can provide the foundation for a
strategic human resource plan.
 Review the strategic-planning process to identify new
opportunities to involve human resource personnel.

8. Overview of the Human Resource
Planning Process

9. Basic Human Resource Planning Model - Example
• Open new
product
line
• Open new
factory
• Distributi
on system
Develop staffing
for new installation
•Production
workers
•Supervisors
•Technical staff
•Other managers
Recruiting and
training
programs
feasible
Transfers
infeasible
because of lack
of managers
with right skills
Recruit skilled
workers
Develop technical
training programs
Transfer managers
from other
facilities
Develop new
objectives
and plans Recruit managers
from outside
Too costly to hire
from outside
1 2 3
4
5

10. Determining Labor Surplus or Shortage
 Based on the forecasts for labor demand and supply,
the planner can compare the figures to determine
whether there will be a shortage or surplus of labor for
each job category.
 Determining expected shortages and surpluses allows
the organization to plan how to address these
challenges.

11. Forecasting as a Part of Human Resource
Planning
DEMAND
FORECASTING
SUPPLY
FORECASTING
Determine
organizational
objectives
Demand
forecast for
each objective
Aggregate
demand
forecast
Does aggregate
supply meet
aggregate
demand?
Go to feasibility analysis steps
Choose human resource
programs
External programs
•Recruiting
•External selection
•Executive
exchange
Internal programs
•Promotion
•Transfer
•Career planning
•Training
•Turnover control
Internal supply forecast External supply forecast
Aggregate supply
forecast
No
Yes

12. HRP Process
1. Environmental Scanning - Interfacing with strategic
planning and scanning the environment
2. Inventory -Taking an inventory of the company’s
current human resources
3. Forecasting and Analyzing Human Resources
Demand.
4. Forecasting and Analyzing Human Resource Supply

13. HRP Process Cont.
5.Anticipating - Comparing forecasts of demand and supply.
6.Action Plan - Planning the actions needed to deal with anticipated
shortage or overages.
7.Control and Evaluation - Feed back such information into the
strategic planning process.

14. Forecasting HRP Period
 Long-range (5 Years and more) –- Strategic
Planning--Environmental Scanning
 Middle range (2- 5 Years)–-- Operational
Planning---Forecasting
 Short-term (2 Years )-- Annual Plans---
Projected staffing requirement

15. Human Resource Forecasting
 HR Forecasting -
Attempts to determine the
supply and demand for
various types of human
resources, and to predict
areas within the
organization where there
will be labor shortages or
surpluses.
There are three major
steps to forecasting:
1. Forecasting the demand
for labor
2. Determining labor
supply
3. Determining labor
surplu and shortage

16. Link 1: Determine Demand - Manpower
Requirement
 How many people need to be working and in what
jobs to implement organizational strategies and attain
organizational objectives.
 Involves forecasting HR needs based on
organizational objectives
 Involves consideration of alternative ways of
organizing jobs (job design, organizational design or
staffing jobs)

17. Link 2: Determine HR Supply - Availability
 Choose HRM programs (supply)
 Involves forecasting or predicting effect of various HR
programs on employee flowing into, through and out
various job classifications.
 First determine how well existing programs are doing
then forecast what additional programs or combination of
programs will do
 Need to know capabilities of various programs and program
combinations

18. Determine Feasibility
1. Requires knowledge of programs
2. How programs fit together
3. External environmental constraints (e.G., Labor force, labor
unions, technology created skill shortages)
4. Internal environmental constraints (skill shortages within the
organization, financial resources, managerial attitudes,
culture)
5. Benefits outweigh the costs
6. Difficulty in quantifying costs and benefits

19. HR Forecasting Activity Categories
HR Forecasting Activity categories can be subdivided into three
parts:
(1) Transaction-based forecasting- forecasting that focuses on
tracking internal change instituted by the organization’s
(2) Event-based forecasting- forecasting concerned with changes in
the external environment.
(3) Process-based forecasting- forecasting not focused on a specific
internal organizational event but on the flow or sequencing of several
work activities.

20. Forecasting Demand
 Ration Trend Analysis
 Work Study Technique
 Regression Analysis
 Simulation Model
 Markov Analysis
 Delphi Technique
 Managerial Judgement

21.  Trend analysis: studying a firm’s employment levels
over a period of years to predict future needs
 Ratio analysis: making forecasts based on the ratio
between (1) factor, like sales volume, and (2) number of
employees required (like number of salespeople )
 Managerial judgment : judgment made by past
observation

22. Supply Forecasting Methods
FORECASTING HR AVAILABILITY
(SUPPLY ANALYSIS) - (Predicting worker flows and
availabilities)
 Succession or Replacement Charts
 Skills Inventories (use of HRIS)
 Markov Analysis (Transition Matrix)
 Personnel Ratios

23. Determining Labor Supply
Predicting Worker Flows and Availabilities
 Succession or Replacement Charts
Who has been groomed/developed and is ready for promotion right NOW?
 Human Resource Information Systems (HRIS)
An employee database that can be searched when vacancies occur.
 Transition Matrices (Markov Analysis)
A chart that lists job categories held in one period and shows the proportion of employees
in each of those job categories in a future period.
It answers two questions:
1. “Where did people in each job category go?”
2. “Where did people now in each job category come from?
 Personnel / Yield Ratios
How much work will it take to recruit one new accountant?

24. Internal Supply Forecasting Information
 Organizational features (e.g., staffing capabilities)
 Productivity - rates of productivity, productivity
changes
 Rates of promotion, demotion, transfer and
turnover

25. External Supply Forecasting Information
 External labor market factors (retirements, mobility,
education, unemployment)
 Controllable company factors on external factors
(entry-level openings, recruiting, compensation)

26. Internal Supply
 Inflows & Outflows - The number of losses & gains of staff is
estimated.
Turnover Rate - refers to rate of employees leaving.
= ( No. of separations in a year / Avg. no. of
employees during the year ) x 100
Absenteeism - unauthorized absence from work.
= ( total absentees in a year / Avg. no. of
employees x No. of working days) x 100
 Productivity Level - = Output / Input. Change in
productivity affects no. of persons per unit of output.
Movement among Jobs - internal source of
recruitment, selection and placement

27. Existing Human Resources - Capability / Skills
Inventory using HR Information System
General Information -
Name: Present Address: Department:
Sex: Designation:
DOB: DOJ:
Marital Salary:
Status: Permanent Address: Grade:
Qualification -
Degree/Diploma Institution Class Year of Pass
Experience/Skills -
Job Title/ Organisation Brief Skill/
Appointment Responsibilities Specialisation
Outstanding Achievement / Additional Information -
Awards Performance Disciplinary Action
Promotions Merit Rating Absenteeism
Achievements
Career Plans:

28. HUMAN RESOURCE INFORMATION SYSTEMS
(HRIS)
 PERSONAL DATA - Age, Gender, Dependents, Marital status, etc
 EDUCATION & SKILLS - Degrees earned, Licenses, Certifications,
Languages spoken, Specialty skills , Ability/knowledge to operate
specific machines/equipment/software
 JOB HISTORY - Job Titles held, Location in Company, Time in each
position, Performance appraisals, Promotions received, Training &
Development
 MEMBERSHIPS & ACHIEVEMENTS - Professional Associations,
Recognition and Notable accomplishments
 PREFERENCES & INTERESTS - Career goals, Types of positions sought
 CAPACITY FOR GROWTH - Potential for advancement, upward
mobility and growth in the company

29. SUCCESSION PLANNING
REPLACEMENT CHART
FOR EXECUTIVE POSITIONS
POSITION REPLACEMENT CARDS
FOR EACH INDIVIDUAL POSITION
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
POSITION WESTERN DIVISION SALES MANAGER
DANIEL BEALER Western Division Sales Mgr Outstanding Ready
Now
PRESENT PROMOTION
POSSIBLE CANDIDATES CURRENT POSITION PERFORMANCE POTENTIAL
SHARON GREEN Western Oregon Sales ManagerOutstanding Ready
Now
GEORGE WEI N. California Sales Manager Outstanding Needs
Training
HARRY SHOW Idaho/Utah Sales Manager Satisfactory Needs
Training
TRAVIS WOOD Seattle Area Sales Manager Satisfactory
Questionable
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

30. PERSONNEL / YIELD RATIOS
 Percentage of applicants from a recruitment source
that make it to the next stage of the selection
process. (i.e. 100 resumes received, 50 found
acceptable = 50% yield.)
 A comparison of the number of applicants at one
stage of the recruiting process to the number at the
next stage. (Note: Success ratio is the proportion of
selected applicants who are later judged as being
successful on-the-job.)

31. PERSONNEL / YIELD RATIOS
1) FOR EVERY 10 APPLICATIONS RECEIVED, ONLY 5 LOOKS
PROMISING ENOUGH TO INVITE FOR AN INTERVIEW
OF EVERY 5 PERSONS INTERVIEWED, ONLY 3 IS ACTUALLY OFFERED
A POSITION IN THE ORGANIZATION
OF EVERY 3 JOB OFFERS MADE, ONLY 1 ACCEPT THE POSITION
2) OF EVERY 10 NEW WORKERS WHO BEGIN THE TRAINING
PROGRAM, ONLY 9 SUCCESSFULLY COMPLETE THE PROGRAM

32. System Sophistication
 Organizational size
 large organizations require more complex forecasting systems
and likely to have the required skilled staff
 Organizational complexity
 complex career paths and diverse skill requirements lead to
more complex forecasting systems
 Organizational objectives
 the greater the gap between current HR situation and desired
HR situation the more sophisticated the system
 Organizational plans and strategies
 the complex the plans are the more complex the forecasting
system

33. Benefits of HR Planning
 Better view of the HR dimensions of business decisions
 Lower HR costs through better HR management.
 More timely recruitment for anticipate HR needs.
 More inclusion of protected groups through planned
increases in workforce diversity.
 Better development of managerial talent

34. Common Pitfalls/Challenges in HRP
 Lack of top management support
 Size of initial effort
 Coordination with other management and HR functions
 Integration with organizational Plans
 Noninvolvement of operating managers
 The techniques trap

35. Business Strategy & HRP
 Cost Leadership – Internal promotion, Emphasis on
Training, Hiring & training for specific training, Build
Human Resources
 Differentiation – External Hiring, Training according
to broad competencies, Buy Strategy
 Focus – Build & Buy Strategy

36. Linkage of Organizational and HR Strategies