Human Resource Planning

Reference: Human Resource Management VSP Rao

Human Resource Planning

Human resources are regarded as the only dynamic factor of production. Other factors like materials, methods, machines, money etc. are useless without their effective use by the human resources. Thus, it is logical that there should be proper manpower or human resource planning in the organization to use the other resources effectively.

Definition: E. W. Vetter, Human resource planning is the process by which the management determines how an organization should move from its current manpower position to its desired manpower position. Through planning the management strives to have the right number and the right kinds of people at the right places, at the right time, to do things which result in both the organization and the individual receiving the maximum long-range benefit.

Nature/Features/Characteristics of Manpower Planning Ascertaining manpower needs in number and kind. It presents an inventory of existing manpower of the organization. Helps in determining the shortfall or surplus of manpower. Initiation of various organizational programmes. Acquisition, utilization, improvement and prevention of human resources.
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Need/Importance/Advantages/Role of Human Resource Planning: It checks the corporate plan of the organization. It helps to face the shortage of certain categories of employees and/or variety of skills despite the problem of unemployment. The rapid changes in technology, marketing, management etc. and the consequent need for new skills and new categories of employees. The changes in organization design and structure affecting manpower demand.
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The demographic changes like the changing profile of workforce in terms of age, sex, education etc. The government policies in respect to reservation, child labour, working conditions etc. The labour laws affecting the demand for and supply of labour. Pressure from trade unions, politicians, sons of soil etc. Introduction of computers, robots etc. It offsets uncertainty and change and helps to have right men at right time and in right place.

it provides scope for advancement and development of employees through training, development etc. It helps to anticipate the cost of salary enhancement, better benefits etc. To foresee the changes in values, aptitude and attitude of human resources and to change the techniques of interpersonal, management etc. To foresee the need for redundancy and plan to check it or to provide alternative employment in consultation with trade unions, other organizations and government through remodeling organizational, industrial and 7 economic plans.

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

Recruit skilled workers Develop technical training programs Transfer managers from other facilities 4

Recruiting and training 3 programs feasible Transfers infeasible because of lack of managers with right skills

Develop new objectives and plans 5

Recruit managers 3 Too costly to hire from outside from outside

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Process Step 1: Forecasting the demand for Human Resources (estimate how many employees are required in the future) Factors to be considered: A. External challenges: 1. Economic development 2. Political, legal, social and technical changes 3. Competition B. Organisational decisions: Organisations strategic plan, sales and production forecasts and new ventures

C. Workforce factors: Retirements, terminations, resignations, death and leave of absence. D. Forecasting techniques: Expert forecasts: Managers estimate future human resource requirements using their experiences and jugdements. Trend analysis: Past rates of change can be projected into the future. Other methods: Mathematical models with computers. Eg. Regression, Optimisation models, budget and planning analysis.
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Step 2: Preparing Manpower Inventory: Purpose: to find out the size and quality of personnel available within the organisation to man various positions. Two major sources of manpower supply: (a) Internal labour supply:
Current staffing level Projected - outflows this year Projected + inflows this year
=

Firms internal supply for this time next year

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Forecasting techniques: 1. Staffing table: It shows the number of employees in each job. It tries to classify employees on the basis of age, gender, position, category, experience, qualifications, skills, etc. A study of the table indicates whether current employees are properly utilised or not. 2. Markov analysis: It uses historical rates of promotions, transfer and turnover to estimate future availabilities in the workforce. Based on past probabilities, one can estimate the number of employees who will be in various positions of the organisation in the future.
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3. Skills inventory: A skills inventory is an assessment of the knowledge, skills, abilities, experience and career aspirations of each of the current employees. This record should be updated to include changes such as new skills, additional qualifications, changed job duties, etc. 4. Replacement chart: It shows the profile of job holders department-wise and offers a snapshot of who will replace whom if there is a job opening.

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(b). External labour supply: Important barometers of Labour supply:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Net migration into and out of the area Education levels of workforce Demographic changes in population Technological developments and shifts Population mobility Demand for specific skills National, regional unemployment rates Actions of competing employers Government policies, regulations, pressures Economic forecasts for the next few years The attractiveness of an area The attractiveness of an industry in a particular place

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Step 3: Determining Manpower gaps: The existing number of personnel and their skills (from human resource inventory) are compared with the forecasted manpower needs (demand forecasting) to determine the quantitative and qualitative gaps in the workforce.

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1. Number required at the beginning of the year 2. Changes to requirements forecast during the year DEMAND

3. Total requirements at the end of the year (1 + 2)

4. Number available at the beginning of the year 5. Additions (transfers, promotions) 6. Separations (retirement, wastage, promotions out and other losses)

SUPPLY

7. Total available at the end of year (4 + 5 +6)

8. Deficit or surplus ( 3 7) 9. Losses of those recruited during the year 10. Additional numbers needed during the year (8 + 9) RECONCILI ATION OF THE ABOVE MANPOWER 17 NEEDED

Step 4: Formulating HR plans: Recruitment plan Redeployment plan Redundancy plan Training plan Productivity plan Retention plan Control points

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Limitations Accuracy Support Numbers game

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Effective HRP: Guidelines Objectives Top management support Employee skills inventory Human resource information system Co-ordination

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