HUMAN RESOURCE PLANNING

• “HRP is a process by which an organisation should

move from its current manpower position to its
desired manpower position. Through planning
management strives to have the right number and
right kind of people at the right places at the right
time, doing things which result in both the
organisation and individual receiving maximum long
run benefit”
E.W.VETTER
 Objectives of HRP
• To recruit and retain the human resource of required
quantity and quality
• To foresee the employee turnover and make
arrangements for minimizing turnover and filling up
consequent vacancies
• To meet the needs of the programmes of expansion
and diversification
• To forsee the impact of technology on work, existing
employees and future human resource requirements
Why HRP gained so much focus in recent times…
• Employment • Lead time
situation
• Technological • Hiring costs
Changes
• Organizational
Changes • Increased Mobility
• Demographic
Changes • Shortage of Skills
 Process of HRP
• Scenario planning
• Assumes that the future is unpredictable, that change
will happen, and that organizations benefit by
thinking about alternative futures and the strategic
options to navigate through and take advantage of
potential scenarios
• ‘PEST’
• Analyzing Organizational Plans
• Demand forecasting for HR
• Supply forecasting for HR
• Estimating Manpower Gaps
• 5. Action Planning
• Action plan for redeployment, retrenchment
• Action plan for outsourcing, recruiting, developing
• 6. Monitoring and Control
HRP Process - Determination of Quantity of Personnel

Organisational Objectives

HR Needs Forecast HR Supply Forecast

HR Programming

HRP Implementation

Control & Evaluation

Surplus - Restricted Hiring, Shortage - Recruitment &

Lay Off, VRS, Reduced Hours Selection
 HR Demand Forecast
Process of estimating future quantity and quality of manpower required for an organisation.

 External factors - competition, laws & regulation, economic

climate, changes in technology and social factors

 Internal factors - budget constraints, production levels, new

products & services, organisational structure & employee
separations
Demand Forecasting
Forecasting Demand for
Employees
Quantitative
QuantitativeMethods
Methods

Forecasting
Forecasting Demand
Demand

Qualitative
QualitativeMethods
Methods
Qualitative methods
 Managerial Judgement

• Managers discuss and arrive at a figure of inflows &

outflows which would cater to future labour
demand.
• It could take the form of ‘bottom-up ‘or ‘top-down’
• Relatively done in small organisations
 Delphi Technique

• It solicits personnel needs from a group of

experts usually Managers.
• The HRP expert act as intermediaries,
summarizes the responses and submit it back
to the expert until consensus are reached
Quantitative methods
 Ratio-Trend Analysis

• Studying past ratios and forecasting future ratios

making some allowances for changes in the
organisation
• ie No. of Workers Vs Volume of Sales,
forecasting future ratios and adjusting for future
changes in the organisation.
 Example of Trend Analysis of HR Demand

BUSINESS  LABOR = HUMAN RESOURCES

FACTOR PRODUCTIVITY DEMAND
YEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)

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
*Projected figures
 Ratio-Trend Analysis
• Present level of prod.(1-1-2010) • 2,000 units
• Present no: of Foreman(1-1-
2010) • 4
• Ratio is 4:2000,i.e., 1:500 • 5,000 units
• Estimated prod. On .(1-1-2011)
• Foreman req. as on (1-1-2011)
 Work-Study Technique

• Used when the volume of work is easily measurable

• Man hours required to perform each unit is calculated

• Work ability of each employee is estimated in terms of

man hours after giving due weightage to absenteeism,
rest ………
 Work-Study Technique

• Planned output for next • 20,000 units

year
• Standard hours per unit • 5
• Planned hours for the year • 1,00,000
• Productive hrs per
man/year (allowing normal • 2000
overtime, absenteeism and
idle time)
• 50
• No: of direct workers
required
Supply forecasting
 HR Supply Forecast
Process of estimating future quantity and quality of
manpower available internally & externally to an
organisation.

Supply Analysis
 Existing Human Resources
 Internal Sources of Supply
 External Sources of Supply
 Existing Human Resources
Supply inventory (HRIS)
Capability / Skills Inventory using HR Information System
General Information -
Name: Present Address: Department:
Sex: Designation:
DOB: DOJ:
Marital Salary:
Status: Permanent Address: Grade:

Qualification -
Degree/Diploma Institution Class Year of Pass

Experience/Skills -
Job Title/ Organisation Brief Skill/
Appointment Responsibilities Specialisation

Outstanding Achievement / Additional Information -

Awards Performance Disciplinary Action
Promotions Merit Rating Absenteeism
Achievements
Career Plans:
 Internal Supply
Inflows & Outflows - The number of losses & gains of staff
is estimated via.
Turnover Rate - refers to rate of employees leaving.
= ( No. of separations in a year / Average no. of employees
during the year ) x 100

Absenteeism - Unauthorised absence from work.

= ( total absentees in a year / Average no. of employees x No. of
working days) x 100

Productivity Level - = Output / Input.

Change in productivity affects no. of persons per unit of output.

Movement among Jobs –

Internal source of recruitment, selection and placement
 Replacement chart

• Shows the names of current position occupants and

the names of likely replacements, providing a rough
estimate of the ‘bench strength’ of the organisation
An Executive
Replacement
Chart
 Markov Analysis
– A method for tracking the pattern of employee
movements through various jobs.
– Also known as Transition Matrix
Hypothetical Markov Analysis for a Retail Company
 External Supply
• External recruitment,

• Advertisements,

• Manpower Consultants,

• Campus Recruitment,

• Unsolicited Applications,

• Employee Referrals
 Yield ratios
Are estimated in the process of hiring applications.

Hiring Process Ratio

 Ad generates 2000 applications. 200 are potential 10:1
 Out of 200, 40 attend interview 5:1
Out of 40, 30 were offered jobs 4:3 Out of 30, 20
accepted 3:2 Overall Yield Ratio (2000:20)
100:1
Formulating an HR action plan
• HR supply = HR demand (No action)
• HR supply > HR demand (Reduce surplus)
• HR supply <HR demand (Remove shortage)
 Reduce Surplus
• Downsizing: A planned elimination of large
number of employees designed to enhance
organisational effectiveness
• VRS/ Golden Handshake
 Remove shortage- New trends
• Employing temporary workers
• Outsourcing : to do non-core activities
• Off shoring: A special case of outsourcing
where the jobs actually leave one country and
go to another
 HR Plan Implementation

 Recruitment, Selection & Placement

 Training & Development

 Retraining & Redeployment

 Retention Plan

 Downsizing Plan