HUMAN RESOURCE

PLANNING
 Meaning:-
• Human resource planning is the process whereby organizations determine the
staffing support they will need to meet business needs and customer demands.

• Robbins (2001) defines HRP as “the process by which an organization ensures that
it has the right number and kinds of people at the right places, at the right time,
capable of effectively and efficiently completing those tasks that will help the
organization achieve its overall objectives”.

• In the words of Coleman Bruce (1997), HRP is the process of determining

manpower requirements and the means of meeting those requirements to carry out
the integrated plan of the organization.
 Questions

• How many employees do we need??

• What are we looking for in terms of skills, knowledge, abilities ??
• Where do we need the employees??
• When do we need the employees ??
• How long do we need them??
 HRP consists of the following elements:-
• Establishing and recognizing future job requirements
• Identifying deficiency in terms of quantity
• Identifying deficiency in terms of quality and specification
• Identifying the sources of the right type of candidate
• Developing the available manpower
• Ensuring the effective utilization of the workforce
• Designing training programs for HR
 Characteristics of Human Resource Planning

• Future-Oriented.
• Continuous Process.
• Optimum Utilization of Human Resources.
• Right Kinds and Numbers.
• Determination of Demand and Supply.
• Pro-active.
• Related to Corporate Plan.
 Purposes/Objectives of HRP
• Promote employees in a systematic manner
• Determining training needs.
• Cope with changes
• Use existing manpower productively
• Forecast personnel requirements
• Control the cost aspect of human resources
 Significance of Human Resource Planning
• Human resource planning determines the future needs of manpower in terms of
number and kind.
• Human resource planning is important to cope with the change associated with external
environmental factors such as technological, political, socio-cultural, and economic forces.
• Another purpose of HR planning is to recruit and select the most suitable personnel to
fill job vacancies.
• Human resource planning/manpower planning helps find out the surplus/ shortage of
manpower.
• Succession Planning
• It is helpful in employee development through various training and development
campaigns to impart the required skill and ability in employees to perform the task
efficiently and effectively.
 Continued…
• It focuses on the optimum utilization of human resources to minimize the overall
cost of production.
• Another importance of human resource planning is that it reduces labor costs
substantially by maintaining a balance between demand for and supply of manpower.
• An effective human resource plan provides multiple gains to the employee by way of
promotions, increase in salary and other fringe benefits. This boosts employee morale.
• It is useful in finding out the deficiencies in existing manpower and providing
corrective training.
• Another importance of human resource planning is the safety of health. It provides for
the welfare, health, and safety of its employees thus leads to an increase in
productivity of the employees in the long run.
• Creates reservoir of talent
Human Resource Planning process steps:-
 Factors affecting Demand for HR
• EXTERNAL
• ORGANIZATIONAL
• WORKFORCE
Demand Forecasting - Determinants

• Employment trends
• Replacement needs
• Productivity changes
• Absenteeism:- Mandays lost due to absenteeism
Mandays worked + Mandays lost
• Growth and expansion
 Supply forecasting
In order to estimate internal supply of personnel, it is necessary to conduct:-

Human Resource Audit

Replacement charts
 Factors affecting Supply Forecasting
• Employer’s demographics
• Demand of particular talent/skill
• Attractiveness of the organization
• Location of the organization
• Law & regulations, education & govt training programs – External factor
• Population densities within the reach of the company
 Quantitative aspects of HRP
• Quantitative aspects relates to the determination of the number of personnel required for each job
in the organisation.
Six interrelated areas under this head includes:-
Demand forecasting
Supply forecasting
Determining Human resource requirements
Productivity and cost analysis
Action planning
Human resource budgeting & control
 Three Basic techniques of Demand forecasting:-

Judgemental forecasts are also known as the conventional method. The forecasts
are based on the judgement of those managers and executives who have intensive
and extensive knowledge of human resource requirement. Judgemental forecasts
could be of two types:
✔ Managerial Estimate : Under this method, the managers or supervisors who are
well-acquainted with the workload, efficiency and ability of employees, think about
their future workload, future capabilities of employees and decide on the number
and type of human resources to be required.
✔ Delphi Method :The Delphi process requires a large number of experts who take
turns to present their forecast statement and underlying assumptions to the others
 Continued…
Work-Study Techniques : Work-study techniques are generally used to study work
measurement.
✔ The volume of workload in the coming years is analyzed.
✔ These techniques are more suitable where the volume of work is easily measurable.
✔ This method uses time and motion study to analyze and measure work. Such
studies help the managers to decide the standard time for per unit work.
✔ The work-study method also takes into account the productivity pattern for the present
and future, internal mobility of the workers like promotion, transfer, external mobility
of the workers like retirement, deaths, voluntary retirements, etc.
✔ Two major problems under this technique are Absenteeism & Labour turnover.
 Continued…
• Statistical Projection: Some forecasting techniques are based on statistical methods.
Some of them are given below:
✔ Ratio-Trend Analysis : The ratio-trend analysis is carried out by studying the past
ratios and the forecasting ratios for the future. The components of internal
environmental changes are considered while forecasting the future ratios.
✔ Econometric Model : Under the econometric model, the previous data is analyzed
and the relationship between different variables in a mathematical formula is
developed. The mathematical formula so developed is then applied to the forecasts of
movements in the identified variables to produce human resource requirements.
✔ Regression analysis: It is used when dependent and independent variables are
functionally related to each other. Equations are made and calculations are done on
computers.
 Continued…
✔ Bureks- Smith Model: A mathematical model for forecasting of human resources in
the organisation.
  En = [ (Lagg+G)1/X]/Y
Note:- where En  is the estimated demand of employees in n planning period
Lagg is overall turnover of business
G is total growth of business
X is the average productivity improvement
Y is conversion figure relating today’s overall activity to personnel required
 Supply forecasting:-
 Simulation technique: it means alternative flows which are examined
for effects on future manpower supplies.
b) Renewal analysis: this technique measures future flow and supplies
of manpower by calculating vacancies created by the organization.
c) Goal programming: here the planner tends to optimize the goal.
d) Markov analysis: in this method the likelihood of a person in a
particular job is estimated.
 Qualitative aspects of HRP:-
Qualitative aspect of human resource planning means that after determining the number of
personnel for each department in the organization, it is required to determine the nature of
job, which will further help in the minimum acceptable qualities required by the personnel. 
Determining the nature of job along with the minimum acceptable qualities of the
personnel is called Job analysis.
Job analysis is divided into two parts:
• Job description: This contains the information relating to the job
• Job specification: This contains the information relating to physical, educational, and
other qualification required by the individual to perform the job.
 Limitations of HRP
• ACCURACY
• PREPARATION
• SUPPORT
• RESISTANCE
• NUMBER GAME
 EFFECTIVE HRP
• OBJECTIVES
• TOP MANAGEMENT SUPPORT
• EMPLOYEE SKILL INVENTORY
• HRIS
• COORDINATION