Module 2- Human Resource Planning (HRP)

Meaning and significance of HRP Objectives of HRP Linking HRP to business plans Steps in HRP Factors affecting HRP Process, problems and limitations of HRP
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Periodicity of HRP

HRP is done generally once in a year Some times it may have to be done as often as once in three months Organizations may have long term HRP say for 5 years with a broad perspective. Organizations may have short term HRP with minute details of the execution
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When is HRP Done

Before beginning of the performance period

Step 1 HR planning

Step 2 Recruitment

Step 3 Selection

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What is HRP

The process of deciding what positions will have to be filled, and how to fill them for a given period of time. It requires the knowledge of demand and supply gaps in labour market. It requires the knowledge of costs and benefits associated with filling of the positions. It requires data gathering from across the organization and analyzing it for decision.
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Significance of HRP
Organizations cannot afford to have more people than required since it will be expensive Organizations cannot afford to have less people since it will result in not meeting the business goals. Hence to determine right number of people to meet business goals, HR planning is required. It is not sufficient to have right number of people, right kind of people also matter. Hence sources of recruitment is important. Recruiting the people should also justify the cost Hence HR budgeting is required.
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Objectives of HRP

To find out the positions to be filled. To find out the positions to be abolished. To find out the positions to be created. To determine the source by which the positions have to be filled. To determine the cost-benefit associated with filling/ not filling particular positions. To ensure that HRP align with business plan of the organization.
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Steps in HRP
Identify the number of people to be hired in each level, location and function. Identify the positions which need not be filled. Identify the existing employees who can be elevated / moved to vacant positions. Identify the positions to be filled through contract employees. Identify the activities to be outsourced for which the vacancies need not be filled. For the remaining vacancies identify the sources of recruitment. Prepare the budget and get it approved. Identify the hurdles and set them right. Go ahead with the hiring process as per the plan.

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Strategic choices in HRP

Should we have high cost-high caliber people or not? What are the gender and diversity issues to be addressed in HRP What is envisaged in Business plan in the matter of HRP Which jobs should be moved from high cost destinations to low cost destinations. Which function at what level require freshers and experienced people. What are the statutory compliance issues to be addressed. How can I align HRP to business goals.
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Linking HR planning to business plans

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Identifying the positions to be filled

For example: MARKETING FUNCTION
Level
Trainee Executive Asst. Manager Manager Senior Manager Chief Manager Gen. Manager Director VicePresident Total Due to business growth Termination Resignation Death Disablement Due to promotion Due to retirement Due to superannu ation Total

2 1

5 2

3 3

6 4

1 1

5 2

0 3

0 2

22 18

2
3 0 1 2

3
4 8 2 1

7
5 0 1 0

3
6 2 2 0

2
7 1 3 1

1
2 3 2 1

1
1 1 1 1

2
1 2 1 1

21
29 17 13 8

3
1 15

2
0 27

1
2 22

1
1 25

1
1 18

0
1 17

0
1 10

0
1 10

8
8 144

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Identifying the sources

For example: MARKETING FUNCTION
Level
No. of positions to be abolished

No. of positions to be filled

positions to be filled from internal sources

Campus recruitment

News paper advertisem ent

Internet recruitment

Consultant

Walk in

Employee referrals

Trainee Executive Asst. Manager Manager Senior Manager Chief Manager Gen. Manager Director VicePresident Total
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Estimating the cost

For example: MARKETING FUNCTION
Level
No. of positions to be filled
Cost of recruitment Cost of selection Cost of training Total Salary, allowances and benefits for the first year Any other expenses Total

Trainee Executive Asst. Manager Manager Senior Manager Chief Manager Gen. Manager Director VicePresident Total

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Forecasting HR requirements

Trend analysis The study of a firms past employment needs over a period of years to predict future needs. Ratio analysis A forecasting technique for determining future staff needs by using ratios between a causal factor and the number of employees needed. Assumes that the relationship between the causal factor and staffing needs is constant
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The Scatter Plot

Scatter plot
A graphical method used to help identify the relationship between two variables.

Size of Hospital (Number of Beds)

Number of Registered Nurses

200
300 400 500 600 700 800 900

240
260 470 500 620 660 820 860

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Determining the Relationship Between Hospital Size and Number of Nurses

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Drawbacks to Scatter Plots

1. They focus on projections and historical relationships, and assume that the firms existing structure and activities will continue into the future.
2. They generally do not consider the impact the companys strategic initiatives may have on future staffing levels. 3. They tend to support compensation plans that reward managers for managing ever-larger staffs, and will not uncover managers who expand their staffs irrespective of strategic needs. 4. They tend to bake in the nonproductive idea that increases in staffs are inevitable.

5. They tend to validate and institutionalize existing planning processes and ways of doing things, even in the face of rapid change. HRM by Dr G P Naik www.iihrm.org

Forecasting the Supply of Internal sources

Qualification inventories Manual or computerized records listing employees education, career and development interests, languages, special skills, Locational preference and so on, to be used in selecting inside candidates for promotion.

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Manual Systems and Replacement Charts

Personnel position replacement charts Company records showing present performance and promotability of inside candidates for the most important positions.

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Forecasting the Supply of Outside Candidates Factors impacting the supply of outside candidates General economic conditions Expected unemployment rate Sources of information Periodic forecasts in business publications Online economic projections Statistics of government departments

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