The document discusses human resource planning, which involves forecasting an organization's future human resource needs based on its goals and strategies, and balancing the forecasted supply and demand of human resources. It provides an overview of the key aspects of human resource planning, including assessing demand and supply, developing objectives, designing and implementing programs, and evaluating outcomes. Quantitative and qualitative techniques for forecasting demand and supply are also described.

1. Human Resources
Planning

2. Human Resources Planning
“HR Planning is the process of using an organisation’s goals and
strategy to forecast the organisation’s HR needs in terms of finding,
developing and keeping a qualified workforce.”
Answers the Question:
“What must we do today to be
prepared for tomorrow”

3. 4-3
HRM Planning
HRM planning is a process by which an organization ensures that it has
the right number and kinds of people, at the right time, capable of
effectively and efficiently completing those tasks that will help the
organization to achieve its overall strategic objectives.

4. 4-4
HRM &
Organizational Strategy
 Human resource planning ultimately translate the organization's overall
goals into number and types of employees needed to meet those goals.
 Employment planning cannot exist in isolation . It must be linked to the
organization’s overall strategy.

5. 4-5
Mission Determining what business
the organization is in.
Objectives
and goals
Setting goals and objective
Strategy Determining how the goals and
objectives will be achieved
Structure Determining what job need to be
done and by whom
People Matching skills, knowledge
and abilities to require the job

6. 4-6
Planning Model

7. 4-7
Strategic Planning and HR Planning
Strategic Planning
Procedures for making decisions about the organization’s long-term
goals and strategies
Strategic Human Resources Management
The pattern of human resources deployments and activities that
enable an organization to achieve its strategic goals.
Strategy Formulation — providing input as to what is possible
given the types and numbers of people available.
Strategy Implementation — making primary resource allocation
decisions about structure, processes, and human resources.

8. Human Resources Planning
Strategic PlanningHR Planning
-Reciprocal and interdependent relationship
-Environmental scanning critical for both

9. Importance Of HRP
1. FUTURE PERSONNEL NEEDS
• Surplus or deficiency in staff strength
• Results in the anomaly of surplus labour with the lack of top executives
2. COPING WITH CHANGE
• Enables an enterprise to cope with changes in competitive forces, markets,
technology, products & government regulations
3. CREATING HIGHLY TALENTED PERSONNEL
• HR manager must use his/her ingenuity to attract & retain qualified & skilled
personnel
• Succession planning
4. PROTECTION OF WEAKER SECTIONS
• SC/ST candidates, physically handicapped, children of the socially disabled &
physically oppressed and backward class citizens.

10. Importance Of HRP (contd.)
5. INTERNATIONAL STRATEGIES
• Fill key jobs with foreign nationals and re-assignment of employees
from within or across national borders
6. FOUNDATION FOR PERSONNEL FUNCTIONS
• Provides information for designing & implementing recruiting,
selection, personnel movement(transfers, promotions, layoffs) &
training & development
7. INCREASING INVESTMENTS IN HUMAN RESOURCES
• Human assets increase in value
8. RESISTANCE TO CHANGE AND MOVE
• Proper planning is required to do this

11. 4-11
Importance Of HRP (contd.)
9. OTHER BENEFITS
 Upper management has a better view of the HR dimensions of business
decision
 More time is provided to locate talent
 Better opportunities exist to include women & minority groups in future
growth plans
 Better planning of assignments to develop managers can be done

12. Human Resources Planning
-Vacant positions create costly inefficiencies
-Overtime hours at premium cost
-Simultaneous layoffs and hiring
-Mass layoffs requiring:
-severance pay
-extended notice periods
Results of Inadequate HR Planning:

13. Human Resources Planning
-Ineffective training, development, career planning
-Turnover of high performers
-Problems with employment equity goals
-Inability to meet operational and strategic plans
Results of Inadequate HR Planning

14. Factors Affecting HRP
Internal growth
Informal
Inflexible
Growth through M & A
Reactive
Flexible
Proactive
Formal
1. TYPE & STRATEGY OF ORGANISATION

15. 4-15
Factors Affecting HRP
II. ORGANIZATIONAL GROWTH CYCLES & PLANNING
• Embryonic/ Introduction stage – No personnel planning
• Growth stage – HR forecasting is essential
• Maturity stage – Planning more formalized & less flexible
• Declining stage – Planning for layoff, retrenchment & retirement
15

16. 4-16
Factors Affecting HRP
III. ENVIRONMENTAL UNCERTAINITIES
• Political, social & economic changes
• Balancing programmes are built into the HRM programme through
succession planning, promotion channels, layoffs, flexi time, job sharing,
retirement, VRS, etc….
IV. TIME HORIZONS
Short-term & Long-term plans
V. TYPE & QUALITY OF FORECASTING INFORMATION
• Type of information which should be used in making forecasts
VI. NATURE OF JOBS BEING FILLED
• Difference in employing a shop-floor worker & a managerial personnel

17. Environmental Scanning:
Sources of Information
Publication
Professional Association
Conferences and Seminars
Professional Consultants

18. The Human Resource Planning Process
Corporate Analysis
Forecast Demand for Labor
Forecast Internal
Supply of Labor
Develop Plan to Match
Demand with Supply
Forecast External
Supply of Labor

19. Strategic Planning
Human Resource Planning
Forecasting Human
Resource
Demand
Comparison of
Requirements and
Availability
Forecasting Human
Resource
Supply
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
Demand =
Supply
No
Action
Surplus of Workers
Restricted Hiring, Reduced
Hours, Early Retirement,
Layoff
Shortage of
Workers
Recruitment
Selection
The Human Resource Planning Model

20. Elements of Effective HR Planning
2. Forecast Future Internal/External Candidates (Supply)
1. Forecast Future HR Needs (Demand)
3. Implement Plans to Balance Supply and Demand
4. Monitor and Evaluate Results

21. 4-21
Four Phases HR Planning
The overall process of HR planning generally occurs in four closely related
phases:
1. Assessing supply and demand
2. Developing objectives
3. Designing and implementing programs
4. Evaluating outcomes

22. 4-22
Phase 1: Assessing Supply and Demand
 Situation analysis and environmental scanning;
 Forecasting HR demands
(Trend projection, unit -demand forecasting) ;
 Reconciling the budget;
 Forecast HR supply (skills inventory).

23. 4-23
Phase 2 : Developing Objectives
 Considering corporate strategy & goals;
 The objectives set will also depend upon the needs identified in phase 1;
 Organizational culture and employee attitudes such as commitment and
customer focus.

24. 4-24
Phase 3 : Designing and Implementing Programs
 To increase the supply of certain categories of employees or to decrease
the number of current employees;
 To make organizations more attractive to a broader of applicants;
 To improve the organizations socialization efforts so that good
employees want to remain with the organization;
 To downsize or ‘right-size’ the organization.

25. 4-25
Phase 4 : Evaluating Outcomes
 To quantify the value of HR;
 An HRIS facilitates rapid and frequent collection of data;
 Data collection is important for evaluating programs and making
adjustments;
 Determining the effectiveness of HR plans;
 Demonstrating the significance of planning and HRM department itself
to the organization as a whole.

26. FORECASTING DEMAND
Human Resource Planning Model
Figure 4.3
Considerations
• Product/service demand
• Technology
• Financial resources
• Absenteeism/turnover
• Organizational growth
• Management philosophy
Techniques
• Trend analysis
•Regression Analysis
•Ratio Analysis
• Managerial judgment
• Delphi technique
Techniques
• Staffing tables
• Markov analysis
• Skills inventories
• Management inventories
• Replacement charts
• Succession Planning
External Considerations
• Demographic changes
• Education of the workforce
• Labor Mobility
• Government policies
• Unemployment rate
FORECASTING SUPPLY
BALANCING
SUPPLY AND
DEMAND
(Shortage)
Recruitment
• Full-time
• Part-time
• Recalls
(Surplus)
Reductions
• Layoffs
• Terminations
• Demotions
• Retirements

27. Forecasting Demand for Employees
Quantitative Methods
Qualitative Methods
Forecasting Demand

28. Forecasting Future HR Needs (Demand)
Forecasting based on:
 Demand for product/service
 Projected turnover
 Quality and nature of employees
 Decisions regarding product quality
 Plans for technological change
 Plans to reduce headcount
 Financial resources

29. Forecasting Future HR Needs (Demand)
Quantitative Approaches:
Trend analysis: Review past employment levels
Ratio analysis: Ratio of business activity/employees
Scatter plot: Graph of business activity/employees
Regression analysis: Statistical relationship
between business activity and employees

30. 4-30
Quantitative Approach: Trend Analysis
Trend analysis means study of a firm’s past employment needs over
a period of years to predict future needs.

31. 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).

32. Example of Trend Analysis of HR Demand
Figure 4.4
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
BUSINESS  LABOR = HUMAN RESOURCES
FACTOR PRODUCTIVITY DEMAND
YEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)
*Projected figures

33. Ratio Analysis:
A forecasting technique for determining future staff needs by using
ratios between sales volume and number of employees needed.
For example, a salesperson traditionally generates Tk. 5,00,000 in
sales and that in each of the last two years you required ten
salespeople to generate Tk. 5 million in sales. Also assume that your
plans calls for increasing your firm’s sales to Tk. 8 million next year
and to Tk. 10 million two years hence. Then, if the sales revenue –
salesperson ratio remains the same, you would require six new
salesperson next year (each of whom produces an extra Tk. 5,00,000
in sales.) In the following year, you would need an additional four sales
people to generate the extra Tk. 2 million in sales.
Quantitative Approach: Ratio Analysis

34. 4-34
Quantitative Approach: Regression Analysis
REGRESSION ANALYSIS:
• Drawing a statistical comparison of past relationship among variables
• Statistical relationship between no. of patients (business factor) &
employment level of nurses in a nursing home may be useful in
forecasting the no. of employees that will be needed if the no. of
patients increases by say 20%

35. 4-35
Quantitative Approach: Regression Analysis
LINEAR REGRESSION ANALYSIS
• Relationship between two
variables which is directly &
precisely proportional
• Production output &
manpower are the two
variables & the relationship
between these two is
plotted on a graph by
drawing a “line of best fit”
• Analysis aims at providing a
measure of the extent to
which changes in the values
of two variables are
correlated with one another
X
a
b Y
Manpower
Production
level
x
x
x
x
x x

36. 4-36
Qualitative Approach: Managerial Judgment
In this all managers sit together, discuss and arrive at a figure which
would be the future demand for labour.
This technique may involve a ‘bottom-up’ or ‘top-down’ approach. A
combination of both could yield positive results.

37. 4-37
Qualitative Approach: Delphi Technique
This technique is the method of forecasting personnel needs.
It solicits estimates of personnel needs from a group of experts, usually
managers.
The HRP experts act as intermediaries, summarize the various responses
and report the findings back to the experts.
Summaries and surveys are repeated until the experts opinion begin to
agree.

38. Forecasting HR Supply
Forecasting the supply of labor is really two tasks:
Forecasting Internal Supply
The number and type of employees who will be in the firm at some
future date
Forecasting External Supply
The number and type of people who will be available for hiring from
the labor market at large

39. Forecasting Supply of Employees: Internal Labor Supply
 Staffing Tables
 Markov Analysis
 Skill Inventories
 Replacement Charts
 Succession Planning

40. 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.

41. Hypothetical Markov Analysis for a Retail Company

42. Estimating Internal Labor Supply for a Given Unit

43. Forecasting Future HR Supply
• Manual or computerized records
• Used to identify internal candidates for transfer
or promotion
• Summary of each employee’s:
• Education
• Experience
• Interests
• Skills
Skills Inventories

44. PERSONNEL INVENTORY
Date: month, year
Employee Name Department Date of Joining
Key Words Work Experience
Word Description Activity
1.
Accounting
2.
Bookkeepi
ng
Tax
Accounting
General Ledger
Supervisi
ng &
Analyzing
Supervisi
ng
From To Description
1.
1973
2.
1965
3.
1964
1978
1973
1965
Chief Tax Accountant at
XYZ Stores
Bookkeeper at XYZ
Manufacturing
Auditing Training at XY
Bank
Job Title Branch or Section Date of Birth
Employee Number Marital Status

45. Personnel Inventory (contd.)
Education
Degree Major Year
1. MBA
2. B. Com
HRM
Accounting
1985
1984
Special Courses
Course Year
1. Management Theory
2. Business Planning
1994
1991
Career & Development interests
Are you interested Yes •
In an
alternative
Type of work? No •
Would you accept Yes •
Transfer to
Another
division? No •
Would you Yes •
Accept promotion for
Further Development
No •
MEMBERSHIPS
Accounting Society
Management
Association
LANGUAGES
Name Fluency
Bangla Fluent
English Read
POSITION PREFERENCE
1. Accounting
2. Auditing
LOCATION PREFERENCE
1. Dhaka
2. Chittagong
HOBBIES
1. Reading
2. Boating
PERFORMANCE SCORE
•
Employee Signature:
Date:
Personnel Department:
Date

46. Forecasting Future HR Supply
summary of each management employee’s:
• background
• qualifications
• interests
• skills
• managerial responsibilities
• duties in current/previous positions
• management training
Management Inventories

47. Forecasting Future HR Supply
 Visual representations of likely internal
 Replacement employees for each position
 Data on each candidate includes:
 Age
 Present performance rating
 Promotability status
Replacement Charts

48. PERSONNEL REPLACEMENT CHART
*** Ms. Rahima (55)
Experience-9 years
** Mr. Kabir (47)
Experience-2 years
00 Mr. Mamun (51)
Experience-1 years
* Mr. Monir (49)
Experience-1 years
VP Personnel
*** Mr. Rahim (60)
Experience-6 years
*** Mr. Safique (42)
Experience-3 years
00 Mr. Arif (40)
Experience-4 years
* Mr. Zakir (39)
Experience-2 years
VP Marketing
00 Mr. Karim (52)
Experience-5 years
* Mr. Rafique (54)
Experience-6 years
00 Ms. Nishat (56)
Experience-8 years
0 Mr. Nayeem (52)
Experience-3 years
VP Finance
* Mr. Mahbub (45)
Experience-1 years
** Mr. Enamul (50)
Experience-8 years
* Mr. Firoze (49)
Experience-3 years
VP Production
00 Mr. Hamid (43)
Experience-4 years
PRESIDENT
***Promotable now **Promotable in one year
* Potential for further promotion
00 Satisfactory, but not promotable 0 Dismiss

49. An Executive Replacement Chart

50. Forecasting Future HR Supply
Formal education
Industry experience
Work experience
Product/service
knowledge
Training courses
Language skills
Relocation
limitations
Career interests
Performance ratings
Computerized Skills Inventory

51. Forecasting Future HR Supply
• analyze demand for managers/professionals
• audit existing executives, project future supply
• individual career planning/career counseling
• accelerated promotions
• performance-related training and development
• planned strategic recruitment
Succession Planning

52. Forecasting Future HR Supply
• General economic conditions
• National labour market conditions
• Local labour market conditions
• Occupational market conditions
Forecasting Supply of External Candidates

53. Sources of Information About External Labor Markets
• Bureau of Statistics
• Labor Force Survey
• Planning and development agencies
• Chambers of Commerce
• Industry and trade group publications
• State and local employment agencies

55. Employee Turnover Rates
• Computing Turnover Rates:

56. Employee Turnover Rates (cont’d)
• Computing Turnover Rates (cont’d):

57. Employee Absenteeism Rates
• Computing Absenteeism Rates:

58. Human Resource Planning
Product
Demand
Labor
Productivity
Internal
Labor Market
External
Labor Market
Labor Demand Labor Supply
Conditions and Select Responses
1. Labor Demand Exceeds Labor Supply
•Training or retraining
•Promotion from within
•Recruitment from outside
•Use of part-timers or temporary workers
•Succession planning
•Subcontracting
•Use of overtime

59. Human Resource Planning
Product
Demand
Labor
Productivity
Internal
Labor Market
External
Labor Market
Labor Demand Labor Supply
Conditions and Select Responses
2. Labor Supply Exceeds Labor Demand
•Pay cuts
•Reduced hours
•Voluntary early retirements
•Inducements to quit (for example, severance pay)
•Layoffs
•Work Sharing
3. Labor Demand Equals Labor Supply
•Replacement of quits from inside or outside
•Internal transfers and redeployment

60. Balancing Supply and Demand
Dealing with a Labour Surplus
• Hiring freeze
• Early retirement programs
• Reducing hours (job sharing, reduced
workweek, part-time work, work sharing)
• Internal transfers
• Layoffs
• Termination with outplacement assistance

61. Balancing Supply and Demand
Dealing with a Labor Shortage:
• Overtime
• Hiring temporary employees
• Subcontracting work
• External recruitment
• Transfers
• Promotions

62. Managing Human Resource
Surplus or Shortage
• Downsizing approaches
– Attrition and hiring freezes
• Not replacing departing employees and not hiring new
employees/
– Early retirement buyouts
• Offering incentives that encourage senior employees to
leave the organization early.
– Layoffs
• Employees are placed on unpaid leave until called back to
work when business conditions improve.
• Employees are selected for layoff on the basis of their
seniority or performance or a combination of both.

63. Managing Human Resource
Surplus or Shortage
• Downsizing approaches (cont’d)
– Outplacement services provided to displaced employees to give
them support and assistance:
• Personal career counseling
• Resume preparation and typing services
• Interviewing workshops
• Referral assistance
• Severance payments
• Continuance of medical benefits
• Job retraining