HUMAN RESOURCE PLANNING

HUMAN RESOURCE PLANNING -- OUTLINE

I. What is it?
II. Why is it important?
III. How is it done?
IV. Is it really done?
 HUMAN RESOURCE PLANNING

Definition

“HRP is a systematic function of ascertaining the net requirement for

personnel by determining the demand for and supply of human
resources now and for the future.”

“Human resource planning involves getting the right number of

qualified people into the right jobs at the right time.”
 IMPORTANCE OF HUMAN RESOURCE
PLANNING

 To determine future employee needs.

 To utilize human resources more efficiently and effectively
 To control employee cost.
 To develop highly competent managerial and professional
employees.
 To formulate and implement strategic plans.
III. How do you do it?
A. General Comments:

1. It is a process of comparing human

resource supply with human
resource demand.

2. It works best when it is tied to:

a. the organization’s strategic planning
process
b. all available forecasts (technological,
economic, market, etc.)
 STAFFING ORGANIZATIONS MODEL
Organization
Vision and Mission
Goals and Objectives

Organization
OrganizationStrategy
Strategy HR
HRand
andStaffing
StaffingStrategy
Strategy

Staffing Policies and Programs

Support Activities Core Staffing Activities
Legal compliance Recruitment: External, internal

Planning Selection:
Measurement, external, internal

Job analysis Employment:

Decision making, final match
Staffing System and Retention Management
 WHY SOME ORGANIZATIONS DO NOT DO
HRP?

 Lack of understanding about the purpose of HRP.

 Non-availability of experts in HRM within the organization or inability of

procuring such experts to the organization.

 Attitude that doing HRP is unnecessary for organizations in a country like

SriLanka as it has a high rate of unemployment.

 Habit of doing staffing function according to human resources needs which

arise on day-to-day basis.

 Habit of doing HRP informally for short time period.

HUMAN RESOURCE PLANNING
PROCESS

Forecast future demand for HR

Estimate HR supply

Compare forecast demand with

estimate supply

Decide strategies to be taken

Assess HRP effort

 THE BASIC ELEMENTS OF HUMAN
RESOURCE PLANNING

(3)
(3)Conduct
ConductEnvironmental
EnvironmentalScans
Scans

((1)1)Forecast
ForecastLabor
LaborRequirements
Requirements

(4)
(4)Determine
Determine
Gaps (5)
(5)Develop
Develop
Compare Gaps
Action
ActionPlans
Plans

(2)
(2)Forecast
ForecastLabor
LaborAvailabilities
Availabilities
 EXAMPLES OF EXTERNAL
INFLUENCES ON STAFFING
Economic
EconomicConditions
Conditions
 Economic expansion and contraction
 Job growth and job opportunities
 Internal labor market mobility
 Turnover rates

Labor
LaborMarkets
Markets
 Labor demand: Employment patterns, KSAOs sought
 Labor supply: Labor force, demographic trends, KSAOs available
 Labor shortages and surpluses
 Employment arrangements

Labor
LaborUnions
Unions
 Negotiations
 Labor contracts: Staffing levels, staffing quality, internal movement
 Grievance systems
 FORECASTING DEMAND FOR HR
 It involves estimating the types and numbers of employees needed for future.(
this future may be one year or more than one year or another period)

 Here following factors affecting future demand for human resources have to
be consider:
 Demand for the product
 Strategic plans of the organization
 Production methods
 Retirements
 Resignations
 Leaves of absence
 Terminations
 External factors such as economic , social and political forces etc..
 TECHNIQUES OF FORECASTING
DEMAND
 Informal Forecasting
 Formal Expert Survey
 Delphi Technique
 Unit Forecasting
 Extrapolation
 Ratio Analysis
 Scatter Plot
Scatter plot
 THE DELPHI TECHNIQUE
Leader identifies judgment issues and develops questionnaire.

Prospective participants are identified and asked to cooperate.

Leaders send questionnaire to willing participants, who record

their judgments and recommendations and return the
questionnaire.

Leaders compiles summaries and reproduces participants’

responses.

Leader sends the compiled list of judgment to all participants.

Participants comment on each other’s ideas and propose a final

judgment.

Leader looks
for consensus

Leader accepts consensus judgment as group’s choice.

 ESTIMATE HR SUPPLY

 There are two sources of human resource supply, internal

supply and external supply.

 Estimates of the internal supply involve more than

merely counting the number of employees. This has two
sub steps.

1. Auditing current human resources.

2. Identifying and arranging possible replacements.
1. AUDITING CURRENT HUMAN RESOURCES.

 This means assessing education ,experience, and competencies of all

the current employees in the organization.

 In this context HR audit is a systematic attempt to summarize each

employee's education, experience, and competencies.

 The audit results in preparing two documents. Those are:

1. Skill Inventory
2. Management Inventory
 Skill Inventory & Management Inventory

 Skill Inventory

 The audits of non-managers.

 Contents
 Identification information of the employee
 Identification information of the job
 Education
 Experiences
 Seniority
 Special competencies
 Promotability
 MANAGEMENT INVENTORY
o The audits of managers.

o Contents

 No of subordinates supervised
 Jobs & duties of the subordinates
 Total budget managed
 Management training received
 Management system developed & implemented
 Creative works & innovation
2. IDENTIFYING & ARRANGING POSSIBLE
REPLACEMENTS

 How many job vacancies can be filed by moving ( usually promoting

) current employees? This question has to be answered accurately
under this sub step of the second step of the process of HRP.
 Replacement chart

A replacement chart is a visual representation of who will replace whom

in the event of a job opening.
 Succession planning

Process of deciding replacements to fill job vacancies can be called as

succession planning alternatively.
 COMPARE FORECAST DEMAND WITH ESTIMATED
SUPPLY & DECIDE STRATEGIES TO BE TAKEN
 EMPLOYEES SURPLUS CONDITION

 Hiring freeze
 Reduction of reward expenditure
 Voluntary departure
 Lay off ( temporary stoppage of employee service with an intention
of rehiring in future)
 Encouragement of leaves of absence ( without pay)
 Formal outplacement facilities.
 Termination
INTERNAL VS. EXTERNAL STAFFING
EMPLOYEES SHORTAGE CONDITION

 Have current employees work for overtime

 Sub contract works to other organizations
 Provide opportunities for learners for a period of time
 Hire part-time employees
 Hire causal employees
 Hire temporary full time employees
 Hire permanent full time employees
DETERMINE NET HR REQUIREMENTS

 HR demand = external supply + internal supply

 HR demand – internal supply = external supply

 External supply = current workforce size * (replacement

% per year + change % per year)
FACTORS AFFECTING THE HR PLANNING
PROCESS

Internal / External /
organizational environmental
INTERNAL/ ORGANIZATIONAL FACTORS
 Corporate mission statement, strategic goals.
 Operational goals, production budgets
 HR policies (compensation, succession)
 Organizational structure, restructuring, mergers
 Workers KSA/competencies and expectations
 HRMs level of development
 Organizational culture and internal communications
 Job analysis: workforce coverage, current data
EXTERNAL/ ENVIRONMENTAL FACTORS
 Economic situation
 Labour markets and unions
 Governmental laws and regulations
 Industry and product life cycles
 Technological changes
 Competitor labour usage
 Global market for skilled labour
 Demographic changes
 QUESTIONS FOR EVALUATE THE HRP EFFORT
 Did job vacancies which had not been forecasted occur? Or not?

 What is the different between forecast number and actual number of job vacancies with
regard to a job?

 Are there current employees who are suitable for filling the job vacancies but who were not
considered or ignored for replacements?

 Are there job vacancies which were not filled at the right time during the period being
considered?

 How long did job vacancies remain vacant?

 Is there any surplus regarding a certain job during the period considered?

 How much cost did it incur for human resource planning?

 Is there any failure of a plan owing to lack of numbers and types of needed employees?
 PRINCIPLES OF HRP
 HRP is to be linked with strategic or organizational planning
 To be basic function
 Participation
 Benfits are to be greater than costs
 Consideration of factors
THANK YOU