1. 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
2. HUMAN RESOURCE PLANNING
• Setting human resource objectives
and deciding how to meet them
• Ensuring HR resource supply meets
human resource demands
3. HRP Process
• Interfacing with strategic planning and
scanning the environment
• Taking an inventory of the company’s
current human resources
• Forecasting demand for human
resources
• Forecasting the supply of HR from within
the organization and in the external
labor market
4. HRP Process Cont.
• Comparing forecasts of demand and
supply
• Planning the actions needed to deal
with anticipated shortage or overages
• Feeding back such information into
the strategic planning process.
5. Example of the Basic Human Resources
Planning Model
Organizational
Objectives
Human Resource
Requirements
Human Resource
Programs
Feasibility
Analysis
6. HRP Model
• Strategic Human Resource Planning
– Links 1 & 5: HR objectives are linked to organizational
objectives and planning
• Designed to insure consistency between organization's
strategic planning process and HRP.
– So objectives of strategic plan are feasible and
– HR programs are designed around what
organizational objectives and strategies require in
terms of human resource goals
7. Example of the Basic Human
Resources Planning Model
Organizational
Objectives
Human Resource
Requirements
Human Resource
Programs
Feasibility
Analysis
1 2 3
4
5
8. HRP Model Cont.
• Operational Human Resource Planning
–Steps 2,3, & 4
• Ensure HRP programs are coordinated
and allows the organization to meet its
human resource requirements.
9. Example of the Basic Human Resource Planning
Model
Open new
product line
Open new
factory and
distribution
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
6
10. Link 1: Determine Demand
(labor requirements)
• 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)
• Example - Peak production could be handled by
temporary workers or assigning overtime. Machine
breakdowns assigned to maintenance department or
handled by machine operators
11. 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
12. Determine Feasibility Links 3 & 4
• Capable of being done
– Requires knowledge of programs, how programs fit
together and external environmental constraints (e.g.,
labor force, labor unions, technology created skill
shortages) and internal environmental constraints
(skill shortages within the organization, financial
resources, managerial attitudes, culture)
• Do the benefits outweigh the costs
– Difficulty in quantifying costs and benefits
13. Revise Organizational Objectives and
Strategies Link 5
If no feasible HR program can be
devised, the organization must
revise strategic plans.
14. Shortcomings of the model - HRP
in Practice
• Oversimplification of planning process -
Planning does not normally proceeds till
find first acceptable plan
• More than one set of HR goals to satisfy
link 1 and more that one acceptable plan to
satisfy link 2 so:
• Typically choose the best HR goal for the
strategic plan and the best program to
satisfy that HR goal
15. Shortcomings of the model - HRP
in Practice
• Oversimplification of the benefit of planning is the
specific plans that result
– Planning process has value in and of itself
• HRP in practice is usually less rational and may omit one
or more of the steps
– May lack knowledge required for forecasting
– Incorrect assumptions about effectiveness of HR
programs
– Does not engage in strategic planning
– Resistance to change present HR systems
16. HRP should be :
• Done to guide and coordinate all HR activities so
they work together to support the overall
strategy
• Responsive to internal and external environment
• Planning - done in advance
• Strategic - linked with higher level planning
17. Human Resource Forecasting
• Process of projecting the organization’s
future HR needs (demand) and how it will
meet those needs (supply) under a given
set of assumptions about the
organization’s policies and the
environmental conditions in which it
operates.
• Without forecasting cannot assess the
disparity between supply and demand nor
how effective an HR program is in
reducing the disparity.
18. Forecasting as a Part of HRP
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
19. Internal Supply Forecasting
Information
• Organizational features (e.g.,
staffing capabilities)
• Productivity - rates of
productivity, productivity
changes
• Rates of promotion, demotion,
transfer and turnover
20. External Supply Forecasting
Information
• External labor market factors
(retirements, mobility, education,
unemployment)
• Controllable company factors on
external factors (entry-level openings,
recruiting, compensation)
22. Considerations in Establishing a
Forecasting System
• How sophisticated
• Appropriate time frame
• Subjective versus objective
forecasting methods
23. 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
24. Forecasting Time Frame
Depends on degree of environmental uncertainty
Factors creating uncertainty (shortening time frame)
– many new competitors, changes in technology,
changes in social, political and economic
climate, unstable product demand
Factors promoting stability (longer time frame)
– strong competitive position, slowly developing
technology, stable product demand.
25. Subjective VS. Objective
Forecasting
Objective is inappropriate when:
–Lack expertise to use objective methods
–Lack the historical data or HR data base
is inadequate
–Forecasting horizon is too long for the
available objective method
26. Demand Forecasting Methods
• Delphi Method
• Staffing Table Approach
• Regression Analysis
• Time Series Analysis
• Linear Programming
