HRP-Human Resource

Planning

Human Resources
Planning

= Resources

Definition :
process by which an organisation
ensures that it has the right
number & kind of people at the
right place and at the right time,
capable of effectively and
efficiently completing those tasks
that help the organisation achieve
its overall objectives..

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Objective
The basic purpose of HRP is to decide what positions the
organisation will have to fill and how to fill them.

Objectives of human
planning
Forecast personnel requirements
Cope with changes
Use existing manpower productively
Promote employees in a systematic
way

Human Resource Planning

resource

5-4

Importance
Organisations use HRP to meet future challenges, cut costs,
and achieve greater effectiveness

Importance of human resource

planning
Create a talent pool
Prepare people for future
Cope with organisational
changes
Cut costs
Help succession planning

Human Resource Planning

5-5

The Process Of HRP

The HRP is a four step process: demand forecasting,
supply forecasting, estimating manpower gaps and
formulating HR plans. The demand for human resources is
influenced by several factors

Forecasting
the
human resources
External challenges
Economic developments
Political, legal, social,
changes
Competition
Organisational decisions
Workforce factors

Human Resource Planning

demand

technological

for

5-6

The Process Of HRP

External Challenges: Liberalisation, privatisation and
globalisation (LPG era) have created huge demand for
people in software, finance marketing, and manufacturing
fields.
Organisational Decisions: Decisions such as expansion,
diversification, and relocation leading to demand for people
possessing requisite skills
Workforce Factors: Such as retirement, resignation, and
termination etc creating manpower gaps.

Human Resource Planning

5-7

Forecasting Techniques
HR forecasts are an attempt to find out an organisation's
future demand for employees

Forecasting techniques
Expert forecasts
Trend analysis
Workforce analysis
Workload analysis

Human Resource Planning

5-8

Forecasting techniques
Expert Forecasts: These are based on the judgements of
those who possess good knowledge of future human
resource needs
Trend Analysis: This is based on the assumption that the
future is an extrapolation from the past. Human resource
needs, as such, can be estimated by examining pas trends.

An example of trend analysis

2001-02

Production of Units

: 5,000

2002-03

No. of Workers

: 100

Ratio

: 100:5000

Estimated Production

: 8,000

2003-04

1 0 0 = 160
5 0 0 0 are also
If supervisors have a span of 20 workers, 8 supervisors
needed in 2003-04.
No. of Workers required : 8000

Human Resource Planning

5-9

Forecasting techniques
Workforce Analysis: All relevant factors in planning
manpower flows in a firm such as transfers, promotions, new
recruitments, retirement, resignation, dismissal etc are taken
into account while estimating HR needs

Manpower flows in a bank

P r o m o t io n s o u t
T ra n s fe rs In

R e c r u it s I n

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Human Resource Planning

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J o b H o p p in g

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T ra n s fe r s O u t

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R e tir e m e n t

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V R S S c h e m e (G o ld e n h a n d s h a k e )

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A t t r a c t i o n s in O t h e r B a n k s , e t c .

5-10

Forecasting techniques
Workload analysis: Based on the planned output, a firm
tires to calculate the number of persons required for various
jobs.

An example of workload analysis

Planned output for the year

10,000 pieces

Standard hours per piece

Planned hours required
Productive hours per person per year
basis)

3 hours
30,000 hours
1,000 hours (estimated on annual

(allowing for absenteeism, turnover, idle time etc.)

No. of workers required

30

If span of control in the unit is 10 per officer, then 3 officers are also required.

Human Resource Planning

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Supply Forecasting
A) Internal labour supply: a manpower inventory in
terms of
the size and quality of personnel available
(their age, gender,
education, training, experience, job
performance, etc) is usually prepared by HR departments.
Several techniques are used while ascertaining the
internal supply of manpower (a supply of employees to fill
projected vacancies can come from
within the firm or
from new hires )

Human Resource Planning

5-19

Supply Forecasting
B) External Labour supply: External hires need to be
contacted when suitable internal replacements are not
available. A growing number of firms are now using
computerised human resource information systems to track
the qualifications of hundreds or
thousands of employees.
HRIS can provide managers with a listing of candidates with
required qualifications after scanning the data base.

Human Resource Planning

5-20

Important barometers of labour

supply
1.

Net migration into and out of the area

2.

Education levels of workforce

3.

Demographic changes in population

4.

Technological developments and shifts

5.

Population Mobility

6.

Demand for specific skills

7.

National, regional unemployment rates

8.

Actions of competing employers

9.

Government policies, regulations, pressures

10. Economic Forecasts for the next few years

11. The attractiveness of an area
12. The attractiveness of an industry in a particular
place

Human Resource Planning

5-21

Manpower Gap Analysis

This is used to reconcile the forecasts of labour demand and
supply. This process identifies potential skill shortages or
surpluses of employees, skills and jobs

Estimating manpower requirements

1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

N u m b e r r e q u i r e d a t th e b e g i n n in g o f t h e y e a r
C h a n g e s to r e q u ir e m e n ts f o r e c a s t d u r in g t h e y e a r
To ta l r e q u ir e m e n t s a t t h e e n d o f t h e y e a r ( 1 + 2 )
N u m b e r a v a ila b le a t t h e b e g in n in g o f t h e y e a r
A d d i t io n s ( t r a n s fe r s , p r o m o t io n s )
S e p a r a t io n s ( r e tir e m e n t , w a s ta g e , p r o m o t io n s o u t a n d o th e r lo s s e s )
T o ta l a v a ila b le a t t h e e n d o f y e a r ( 4 + 5 + 6 )
D e f ic it o r s u r p l u s ( 3 - 7 )
L o s s e s o f t h o s e r e c r u it e d d u r in g t h e y e a r
A d d i t io n a l n u m b e r s n e e d e d d u r in g t h e y e a r ( 8 + 9 )

Human Resource Planning

Ye a r
2

DEM AND
------- -----S U P P LY
-------------------R E C O N C IL IA T IO N
O F THE ABO VE
M ANPOW ER NEEDED

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Formulating HR Plans
Once supply and demand for labour is known adjustments
can be made formulating requisite HR plans

A variety of HR plans

Recruitment
plan

Redeployment
plan

Redundancy
plan

Training plan

Productivity
plan
Resource
Retention
Human
Planningplan

5-23

Responsibility For Human Resource

Planning
HRP is a top management job. HR plans are usually made
by the HR division in consultation with other corporate
heads. Any deviations from the formulated plans and their
causes must be looked into, from time to time in order to
assess whether the plans require revision or modification.

Human Resource Planning

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Limitations Of Human Resource

Planning
HR professionals are basically confronted with three
problems while preparing and administering HR plans:
accuracy, inadequate top management support, irregular
focus on quantitative aspects.

Human Resource Planning