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Human Resource

Planning

1
Human Resource Planning (HRP)

Is the first component of HRM strategy


All other functional HR activities are derived
from and flow out of the HRP process.
Has its basis in considerations of future HR
requirements in light of present HR
capabilities and capacities.
Is proactive in anticipating and preparing
flexible responses to changing HR
requirements.
Has both an internal and external focus.

PGP 2007-09
Human Resource Planning
Definition:
Acc to Stainer Strategy for acquisition, utilization
improvement and preservation of enterprises human
resources

Beatty And Schneier defines it as a sequential


process embodying the following five elements-
1.Imputs into HRP
2. Analysis of existing HR
3. Forecast of future HR needs
4. Implementing HR plan
5. Evaluation and redesign of the HR Plan

PGP 2007-09
HRP and Strategic Planning
Strategic Analysis
What human resources are needed and what are
available?
Strategic Formulation
What is required and necessary in support of
human resources?
Strategic Implementation
How will the human resources be allocated?

Human
Human Resource
Resource Strategic
Strategic
Planning
Planning Planning
Planning

PGP 2007-09
HR Planning Issues
Staffing Questions:
How do we manage staffing in times of
recession or expansion?
What impact does technology change,
mergers or relocation have on staffing
issues?
Do we always have the right people in the
right jobs at the right time?
How do we get our human resources: buy
them or make them or both?

PGP 2007-09
Major Objectives of HRP
Preventing understaffing and overstaffing
Ensure the organisation has the right
employees with the right skills at the right
place at the right time
Ensure the organisation is responsive to
changes in its environment
Provide direction and coherence to all HR
activities and systems

PGP 2007-09
Types of Planning
Aggregate Planning
Anticipating the needs for groups of
employees in specific, usually lower level
jobs and the general skills employees will
need to ensure sustained high performance.
Succession Planning
Focuses on ensuring that key individual
management positions in the organization
remain filled with individuals who provide
the best fit for these critical positions.

PGP 2007-09
HRP and Environmental
Scanning
Environmental Scanning
The systematic monitoring of the
major external forces influencing the
organization.
Economic factors
Competitive trends
Technological changes
Political and legislative issues
Social concerns
Demographic trends
PGP 2007-09
Scanning the Internal
Environment
Cultural Audits
Audits of the culture and quality of work
life in an organization.
How do employees spend their time?
How do they interact with each other?
Are employees empowered?
What is the predominant leadership style of
managers?
Benchmarking
The process of comparing the organizations
processes and practices with those of other
companies.
PGP 2007-09
Human Resource Planning Model
FORECASTING
FORECASTINGDEMAND
DEMAND BALANCING
BALANCING
Considerations Techniques SUPPLY
SUPPLYAND
AND
Considerations Techniques DEMAND
Technology Trend DEMAND
Technology Trendanalysis
analysis
Financial resources Managerial
Financialresources Managerial
(Shortage)
(Shortage)
Organizational
Organizationalgrowth
estimates
growth estimates
Recruitment
Recruitment
Mgmt. Delphi
Delphitechnique Full-time
Full-time//Part-time
Mgmt.philosophy
philosophy technique Part-time
Techniques
Techniques External
External (Surplus)
(Surplus)
HR
HRinventories
inventories Considerations
Considerations Reductions
Reductions
Markov
Markovanalysis
analysis Wkforce
Wkforcechanges
changes Layoffs
Layoffs
Skill
Skillinventories
inventories Mobility
Mobility Terminations
Terminations
Replacement
Replacementcharts
charts Govt
Govtpolicies
policies Demotions
Demotions
Succession
SuccessionPlanning
Planning Unemployment
Unemployment Retirements
Retirements
FORECASTING
FORECASTINGSUPPLY
SUPPLY
PGP 2007-09
Quantitative Approach: Trend
Analysis
Forecasting labor demand based on an
organizational index:
Select a business factor, e.g. sales, that best
predicts human resources needs.
Plot the business factor in relation to the

number of employees to determine average


labor productivity.
Compute labor productivity for the past five

years.
Project human resources demand out to the

target year(s).
PGP 2007-09
Example of Trend Analysis of HR
BUSINESS LABOR
Demand
FACTOR PRODTY
= HR
DEMAND
YEAR (SALES IN 000) (SALES/EMPLOYEE) (NO. OF EMPLOYEES)

1999 Rs. 2,935 8.34 352


2000 Rs. 3,306 10.02 330
2001 Rs. 3,613 11.12 325
2002 Rs. 3,748 11.12 337
2003 Rs. 3,880 12.52 310
2004 Rs. 4,095 12.52 327
2005* Rs. 4,283 12.52 342
2006* Rs. 4,446 12.52 355 *Projected figures

PGP 2007-09
Qualitative Approaches to
Demand Forecasting
Management Forecasts
The opinions (judgments) of supervisors,
department managers, experts, or others
knowledgeable about the organizations future
employment needs.
Delphi Technique
An attempt to decrease the subjectivity of
forecasts by soliciting and summarizing the
judgments of a preselected group of individuals.
The final forecast represents a composite group
judgment.

PGP 2007-09
Forecasting Supply of Employees:
Internal Labor Supply
Staffing Tables
Markov Analysis

Skill Inventories

Replacement Charts

Succession Planning

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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.

PGP 2007-09
Hypothetical Markov Analysis for a
Retail Company

PGP 2007-09
Internal Supply Forecasting Tools
Skill Inventories
Files of personnel education, experience,
interests, skills, etc., that allow
managers to quickly match job openings
with employee backgrounds.
Replacement Charts
Listings of current jobholders and
persons who are potential replacements
if an opening occurs.

PGP 2007-09
An Executive Replacement Chart

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Forecasting Supply of Employees:
External Labor Supply
Factors Influencing the External Labor
Supply:
Demographic changes in the population
National and regional economics

Education level of the workforce

Demand for specific employee skills

Population mobility

Governmental policies

PGP 2007-09
Sources of Information About
External Labor Markets
Department of Labor publications
State and local planning and
development agencies
Chambers of Commerce

Industry and trade group publications

State and local employment agencies

PGP 2007-09
HRP Considerations

Balancing supply
and demand

PGP 2007-09
Elements of The HR Plan
Acquisition of personnel
Effective Utilization
redeployment
methods improvement
training to prevent obsolescence
Development and Improvement
broad-based training and development
performance management systems
Retention
proper remuneration
long-term career planning
healthy employee relations
good working environment
PGP 2007-09
Requisites for Successful HRP
HRP must be seen as equally vital as business
planning
Top-management support
Periodic review and revision of the forecasting
techniques and the forecasts
Without long range planning concentration becomes
focussed on short-term needs resulting in crisis
management reactions
An excellent and up-to-date HRIS
Active involvement of line managers and co-
ordination between line mgrs and HR function

PGP 2007-09