Human Resource Planning (HRP)

What is HRP?
Human resource planning involves getting the right number of qualified people into the right jobs at the right time for efficiency & effectiveness. It is the system of matching the available resources either internally or externally, with the demand that the organization expects to have over a period of time.

 HRP is a process and a set of plans to eliminate any gaps that may exist between supply & demand The purpose of HRP is .. To predict future need of human resources Use existing resources effectively

Objectives of HRP
To maintain the required quantity & quality of human resources To forecast the turnover/attrition rate To plan to meet organizational human resource needs at the time of expansion or diversification To foresee the effects of technological changes on the requirement for human resources & provide for the same To optimize staffing

 To make contingent plans to handle sudden requirements & shortfall situations To utilize human resources efficiently & effectively To estimate the value of human resources & their contribution to the organization

HRP at different Planning Levels

Corporate level planning (macro level)
Changing market situation Strategic planning Anticipating technological changes Includes issues like welfare policy; development policy; employment policy

Intermediate level planning

Done at SBU level Is based on Corporate level planning Includes determining recruitment/layoff strategies; retaining strategy etc.

 Operations planning
Made at operational level Includes plans for training & development of resources; recruitment etc

Planning Short-term activities

Management of day-to-day activities like grievance handling

Human Resource Planning Process

External Environment Internal Environment

Strategic Planning Human Resource Planning

Forecasting Human Resource Requirements

Comparing Requirements and Availability Surplus of Workers Restricted Hiring, Reduced Hours, Early Retirement, Layoff, Downsizing

Forecasting Human Resource Availability Shortage of Workers Recruitment Selection

Demand = Supply No Action

HRP Process
1. It is a process of comparing human resource supply with human resource demand. Assessment of the human resources currently available in the organization. HR inventory & Job Analysis help in assessment 2. It works best when it is tied to: the organizations strategic planning process all available forecasts (technological, economic, market, etc.)

3. When there are variances, action plans must be formulated, e.g., for surpluses, will organization use layoffs, retirement incentives, reduced hours, or something else? for shortages, will organization use overtime, temporary workers, or recruit new permanent workers?

Stages/Phases of HRP
Situation Analysis/ Environmental Scanning Forecasting Demand for human resources Analysis of Supply of human resources Development of Plan of Action

Situation analysis
HRM & Strategic Planning interact to adapt to environmental circumstances Forecasting Demand for Human Resources Forecasting yields/ calculates advance estimates of the organizations staffing requirements

 Approaches to Forecasting demand

Qualitative (Top-Down approaches)
1) Expert opinions/estimates Expert or group of experts provide the organization with demand estimates based on experience, guesses, intuition & subjective assessments of economic & labor force indicators a) Delphi technique Estimates from individuals yielded in iterative mannerestimates are revised by each individual based on knowledge of others estimate b) Nominal Group technique Individual generation of estimates are followed by group brainstorming sessions

2) Trend Projection Develops a forecast based on a past relationship between a factor related to employment & employment itself. 3) Quantitative/Modeling & multiplepredictive techniques a) Regression analysis / Trend analysis b) Markov analysis

4) Unit Demand Forecasting (Bottomup approach) Unit (department/ team) is forecasted Headquarters sums the unit forecasts and the result becomes the employment forecast

Supply analysis
1) Skills inventories A list of names & the kind of skills, abilities, experiences & training the employees currently have. Contents of a Skill Inventory
Data summarizing the employees past Data summarizing status of present skills Data that focus on future (important contents are: employees own stated career goals, geographical preference, retirement plans etc.)

2) Replacement charts / Succession plans

Forecasting HR requirements
Estimate of numbers and kinds of employees the organization will need at future dates Demand for firms goods or services must be forecasted Forecast is then converted into people requirements

Forecasting HR availability
Determining whether the firm will be able to secure employees with the necessary skills, and from what sources these individuals may be obtained Show whether the needed employees may be obtained from within the company, from outside the organization, or from a combination of the two sources

Sources of supply to be considered

Addition of new-hires Transfers Employees going/coming from leave Promotions/demotions Separations due to retirement; resignation; death; disciplinary action etc.

Factors effecting supply

Changing demographics Political, Social & Legal environment

Action Plan-Surplus of employees

Retrenchment Outplacement Lay-offs Leave of absence without pay Loaning Work sharing Reduced work hours Early/voluntary retirement Attrition

Action Plan: Shortage of workers

Internal Work overtime Training programs prepare previously unemployable people for positions Compensation incentives premium pay is one method promotions

External Recruiting & Selection Contingent workers

Part time workers Subcontractors Independent professionals

Human Resource Information System (HRIS)

Virtually all HR management functions can be enhanced through the use of an HRIS any organized approach for obtaining relevant and time information on which to base HR decisions

HUMAN RESOURCE INFORMATION SYSTEM Goal: Integrate Core Processes into Seamless System
Input Data Types Job Analysis Recruitment Selection/Job Posting/ Employee Referral T&D Performance Appraisal Compensation Benefits Safety Health Labor Relations Employee Relations Output Data Uses* Employee Tracking Diversity Programs Hiring Decisions Training Programs/Elearning/Management Succession Contribute Toward Achievement of:

Organizational Strategic Plans

Human Resource Information System

Compensation Programs Benefit Programs (e.g., prescription drug programs) Health Programs (e.g., Employee Assistance Programs) Bargaining Strategies Employee Services

Human Resource Management Plans

*Certain data are available to employees at work or at home. Examples: supervisors might access just-intime training for conducting performance appraisal reviews. Operative employees might enter time and labor data.