Human Resource Planning: Meaning, Process, Importance & Objectives

Everything you need to know about human resource planning. Human resource planning is defined as a process, which includes forecasting, developing and controlling, by which an organization ensures that it has the right number of people and the right kind of people, at the right place at the right time doing work for which they are economically most useful.

Its meaning when applied to corporate enterprises is not materially different from manpower planning. It attempts to provide sufficient manpower required to perform organizational activities. HR planning is a continuous process which starts with identification of HR objectives, move through analysis of manpower resources and ends at appraisal of HR planning.

According to Beach, “Human resource planning is the process of determining and assuming that the organisation will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved.”

In this article we will discuss about human resource planning. Learn about:-

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1. Meaning of Human Resource Planning (HRP) 2. Definition of Human Resource Planning (HRP) 3. History and Growth 4. Need 5. Features 6. Factors Affecting 7. Core Areas 8. Responsibility

9. Aspects 10. Importance 11. Types 12. Effective Guidance 13. Techniques 14. Dimensions 15. Process 16. Barriers.

Human Resource Planning: Meaning, History, Need, Features, Importance, Types, Techniques, Benefits and Barriers

Contents:

Meaning of Human Resource Planning (HRP)
Definition of Human Resource Planning (HRP)
History and Growth of Human Resource Planning (HRP)
Need for Human Resource Planning (HRP)
Features of Human Resource Planning (HRP)
Factors Affecting Human Resource Planning (HRP)
Different Core Areas of Human Resource Planning (HRP)
Responsibility for Human Resource Planning (HRP)
Basic Aspects of Human Resource Planning (HRP)
Importance of Human Resource Planning (HRP)
Types of Human Resource Planning (HRP)
Effective Guidance Human Resource Planning (HRP)
Techniques of Human Resource Planning (HRP)
Dimensions of Human Resource Planning (HRP)
Process of Human Resource Planning (HRP)
Barriers to Effective Human Resource Planning (HRP)

Human Resource Planning – Meaning

Human resource planning is defined as a process, which includes forecasting, developing and controlling, by which an organization ensures that it has the right number of people and the right kind of people, at the right place at the right time doing work for which they are economically most useful. Its meaning when applied to corporate enterprises is not materially different from manpower planning.

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A systematic programme of recruitment, selection and placement at the enterprise level begins with manpower planning. Without manpower plans estimates of human resource needs are reduced to near guess work.

Human resource planning is a process that identifies current and future human resources needs for an organization to achieve its goals. Human resources planning should serve as a link between human resources management and the overall strategic plan of an organization.

Human resource planning can also be defined as “a process through which the company anticipates future business and environmental forces. Human resources planning assess the manpower requirement for future period of time “.

It attempts to provide sufficient manpower required to perform organizational activities. HR planning is a continuous process which starts with identification of HR objectives, move through analysis of manpower resources and ends at appraisal of HR planning.

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The sine-qua-non of human resource planning is:

(1) The precise and detailed knowledge of what resources the organization actually has at its disposal,

(2) The state of resources in terms of skills, knowledge, morale, and motivation, and

(3) The efficiency with which and conditions within which that resource is being utilized.

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In an integrated system of manpower planning, the organization sets its goal or objectives, determines its needs for employees, matches the needs against its current inventory of people, and determines its requirements. Employees to fill these needs are then acquired, developed, or contracted for.

Human Resource Planning – Definition Propounded by Various Management Thinkers: Geisler, Beach and Robins

According to Geisler, “Human resource planning is the process that includes forecasting, developing and controlling by which a firm ensures that right number of people, right kind of people, at the right places, at the right time and doing work for which they are economically most useful.”

Human resource planning is the process by which the quantity and quality of manpower required in an organisation is estimated according to present and future needs of organisation. Human resource planning ensures right number and right kind of people in an organisation at right place and at right time.

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(a) Planning right number of people means the planning of number of persons required in different departments at different levels.

(b) Planning right kind of people means persons who are hired should match the job profile for which they are hired e.g., persons with right qualification, skills, knowledge, work experience and aptitude for work should be hired.

(c) Planning at right place means placement of persons should be such that they can accomplish their jobs willingly and effectively.

(d) Planning at right time means planning according to business needs. For example, in sugar mills, more persons are required at the time crop of sugarcane comes.

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Robins defined human resource planning in the corporate enterprises as ‘the process by which an organization ensures that it has the right number and right kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will aid the organization in achieving its overall objectives’.

Efforts should be made to maintain flexible workforce. Human resource planning requires the knowledge of demand and supply of human resource. Demand of human resource is affected by organisational events such as expansion, diversification, lay off, retirement, retrenchment, dismissals, transfers, voluntary quits, deaths, etc. Supply of human resource depends on new hires, transfers-in, individuals returning from leave, etc.

Human Resource Planning – History and Growth

1. Peter Drucker:

Throughout the history of the Human Resource (HR) profession there has been a debate that Human Resource professionals have suffered from problems associated with achieving credibility and recognition in their organizations.

For example, Peter Drucker noted, as far back as 1954, a constant worry of all personnel administrators to prove that they are making a contribution to their enterprise. He believed that these problems mainly have been due to the Human Resource functional role as an administrative support function, dealing with employment contracts, salaries etc.

2. Berglund, 2002; Legge, 1995:

i. Human resource is people and not business oriented:

The Human Resource function has been considered as representing mainly the interests of the employees and thereby been split off from the rest of the organization. According to Berglund this has created a continuous struggle for many Human Resource professionals to re-establish their status and legitimacy in their companies, and reduce the gap by becoming more business oriented.

ii. Personnel, human resource and strategic human resource management are same concepts in a new bottle:

Berglund observed further that this has also sometimes created a willingness to adopt different roles and rhetorics to enhance their legitimacy and strengthen their identity. Throughout the history of the personnel management profession, the world has also witnessed several concepts that have evolved in the profession, starting with Personnel Management and followed by Human Resource Management (HRM), and later Strategic Human Resource Management.

Many critics have argued that the different concepts describes the same thing and do not differ extensively from each other. Legge noted that Human Resource Management had the same intentions and described the same things as Personnel Management.

3. Mabey, Salaman and Storey (1998):

Mabey, Salaman and Storey (1998) claimed that Strategic Human Resource Management referred to the same intentions that Human Resource Management had from its birth, and argued that the choice to add the strategic component was a rhetoric way of again, emphasising that people could make difference in distinguishing successful organizations from the rest.

4. Wren (1994) – From Welfare Planning to Human Resource Planning:

Human Resource Planning has been discussed in different Human Resource Management contexts for many years. The first documented attempt to establish a plan for the employee development was made in the end of 1800 and was generally referred to as welfare planning.

These plans were based on the idea to carefully select, train, and retain employees. In addition they were taking care of grievance and transfers of dissatisfied workers as well as education and management of performance and development records. The ideas sustained and developed but gradually changed name to manpower planning, and later also to Human Resource Planning (HRP).

5. McBeath (1978) – Knowledge, Competencies and Skill:

In 1978, McBeath addressed his view of human resource planning by highlighting a set of issues that he regarded as being important with respect to the human resource planning.

These were:

i. An estimation of how many people the organization needed for the future.

ii. A determination of what knowledge, skills and abilities that are needed to ensure that the organization can survive and grow.

a. An evaluation of the knowledge, skills and abilities of existing employees.

b. A determination of how the company could fill the identified competence gaps.

6. Gallagher (2000) – From Job Analysis to SWOT Analysis:

i. Human Resource Planning was a Part of Job Analysis and Used as SWOT Analysis:

According to Gallagher (2000), human resource planning was initially an important aspect of job analysis and was often used as bases for determining strengths and weaknesses among the employees and to develop the skills and competences they needed.

As individual career plans started to gain more popularity, companies gradually started to pay more attention to the certain skills and competences among individual employees as a way of dealing with the companies’ succession planning. Annual appraisals were made between managers and employees in order to evaluate the current competence and the aspirations and objectives for the future, and a distinction was often made between, what Gallagher refers to as, functional and numerical groups of employees.

ii. Functional Theoretical Framework is More Critical to Organizational Success:

The functional theoretical framework group was considered as able to perform complex professional and managerial duties, while on the contrast, the numerical groups of employees were regarded as low skilled. Thus, the functional group was being regarded as critical to the success of the organization and as the core group in the succession planning.

7. Storey (1995):

i. Human Resource Planning is Competencies Forecast:

Storey (1995) argues that human resource planning today is a very important task of every organization’s human resource department. He refers to it as the company’s ability to forecast future needs of competence. In this way the company actively scans its current competences and makes forecast for future needs using various techniques.

ii. Succession Planning is an Essential Part of Human Resource Planning:

According to him, Human Resource planning mainly involves the identification of skills and competence within the organization, the filling of identified competence gaps, and the facilitation of movements of employees within the organisation. An essential part of the human resource planning is, according to him, the succession planning which aims to ensure the supply of individuals and filling of gaps on senior key positions when they become vacant, and to transfer competences to areas where they are most valued.

Human Resource Planning – Present Need for Demographic Change, Skill Shortages, Technological Change, Legislative Control, Government Influences and a Few More

Major reasons for the present emphasis on HRP include the following:

(a) Demographic Change – The changing profile of the workforce forming the view point of age, sex, literacy, technical inputs and social background have implication for manpower planning. Due to development in education, technology and income the features of employees are changing.

The percentage of working women is increasing with the time. The employees are from different caste, creed, religion, region and nationality. So the manpower planning is needed in this situation and it cannot be ignored.

(b) Skill Shortages – If there is unemployment it does not necessarily mean that the labour market is a buyer’s market. Normally organisations become more complex and need a good range of rare and scarce specialist skills. Problems do arise when such employees leave the organisation.

(c) Technological Change – The rapid change in production technologies, marketing methods and management techniques are rapid and extensive. They have a profound effect on the job contents. Problems pertaining to redundancies, retraining and redeployment arise due to such changes. Due to new technology the requirement of manpower has been reduced. On account of all these manpower needs are to be planned intensively and systematically.

(d) Legislative Control – Executive ‘hire and fire policies’ no longer hold good now. Now it is easier to increase but difficult to reduce the size of an organisation quickly and cheaply because of the recent changes in labour laws regarding layoff and closures. Those who are responsible for managing manpower have to look far ahead and thus try to foresee manpower problems.

(e) Government Influences – Government controls and changes the legislation in respect of affirmative action for disadvantages groups, working condition and hours of work, restriction on woman and child employment. Casual and contract labour, etc., have encouraged the enterprises to get involved in systematic manpower planning.

(f) Organisational Changes – In the turbulent environment marked by cyclical fluctuation and discontinues the nature and pace of changes in organisational environment activities and structures affect manpower requirements and require strategic planning. With the changing time the organisations are also changing so the need for human resource planning is felt.

(g) The Unemployment Situation – In general the number of educated unemployed is on the increase but there is an acute shortage for those with a variety of skills. Hence there is greater need for more effective recruitment and retaining people. For recruitment and selection the manpower planning is the base. So it can be said it is needed in this situation.

(h) Lead Time – It is necessary to have long lead time for the selection process as also for employee’s training and development so that new knowledge and skill can be handled successfully. To avoid the shortage of manpower during selection process the manpower planning is to be done in time without fail.

(i) System Concept – The spread of systems knowledge and the incoming of the microcomputer as part of the ongoing revolution in information technologies put a great emphasis on planning and newer ways of handling voluminous personnel records.

(j) Impact of Pressure Groups – The enterprise management has to constantly face pressures in matters of internal recruitment and promotions preference to employees, children, displaced persons, sons of soil, etc., from pressure groups such as unions, politicians and persons displaced from land by location of grant, enterprises have been raising contradictory pressures.

Human Resource Planning – Top 10 Features: Basis of HRM, Forward Looking, Hiring and Placement, Effective Utilization and a Few Others

Human resource planning is the foremost function of human resource management.

The features of human resource planning are as follows:

Feature # 1. Basis of HRM:

HRP is the basis of human resource management. HRM begins with the planning for the requirement of human resources. All other activities of HRM-recruitment and selection of employees, training and development, performance appraisal are all based on HRP.

Feature # 2. Forward Looking:

HRP is a forward looking approach that analyses the future requirement of human resource in the organization in the light of expansion plan, growth of the organisation, and change in technological environment, lay off, attrition and retirement of personnel. HRP makes a prior assessment of human resource requirement-the quantitative and qualitative requirement in the organization to ensure uninterrupted supply of workforce.

Feature # 3. Hiring and Placement:

HRP compares the existing human resource availability with the human resource need, and identifies if there is shortfall or surplus of human resources. The shortfall is met by recruitment and selection of person and the surplus of workforce are resolved through lay off.

Feature # 4. Effective Utilization:

HRP ensures effective utilization of human resources. This is possible through efficient acquisition, utilization, improvement and preservation of organisation’s human resources.

Feature # 5. Continuous Process:

Human resource planning is a continuous process to ensure continuous supply of the best work force to the organization. Human resource planning needs continuous revision and update to meet changing demands of the job. HRP develop strategies to meet long and short term requirement.

Feature # 6. Dynamic Process:

Human resource planning is a dynamic process that considers the changing human resource needs of the organisation. Every job in the organisation is different from each other with regard to how the job is to be performed, abilities and skills required to perform the job. The requirements of jobs and the qualities, skill and abilities of work force are not static. Therefore HRP incorporates the dynamic job requirement and the dynamism in the quality of work force.

Feature # 7. Qualitative and Quantitative Aspect:

HRP considers both the qualitative aspect and quantitative aspect of human resources at the time of planning. Quantitative aspect means that HRP estimates the future requirement of number of personnel required by the organisation. Qualitative aspect denotes the skill, knowledge, talent required of the workforce.

Feature # 8. Objective Based:

The objectives of HRP are based on the objectives and goals of the organisation. The objectives of HRP like training and development of existing employees, updating technical knowledge and expertise, planning for future human resource requirement are all based on overall organisational objectives and future plans and aimed at achieving organisational objectives.

Feature # 9. Programme for HRM:

HRP helps in designing recruitment policies, framing selection procedure, training and development programmes and performance appraisal programmes of the organisation.

Feature # 10. Maintenance of Inventory of Human Resource:

HRP maintains detailed information regarding the existing man power in the organisation. It maintains the profile of each employee, their educational qualification, skill, their level of performance. This helps to discover untapped talent within the organization who can be put to best use and also helps to initiate training and development programme.

Human Resource Planning – Different Core Areas: Demand & Supply Forecasting, Job Analysis, Job Description, Job Enlargement and Enrichment & Negotiating and Contacting

The different core areas that are very needful to provide basic raw structure towards a better formulation and implementation of HR planning.

1. HR Demand and Supply Forecasting:

According to the HR requirements in an organisation, there is a HR programme to make the estimate and forecast of the potential HR requirement. With the help of prediction of the number and types of employees, the planning process might be able to determine the alternative sources of HR as well as the action plan also. At the same time the alternative sources of HR supply also provide a basic feedback to make the planning and its various techniques to make adequate source of HR supply.

2. Job Analysis:

It is a systematic process by which management find out and analyses information related to the task and its duties and responsibilities within organisation.

It provides the needful information to the HR planning as:

i. The list of actual activities and analyse why, how and when each activity is performed;

ii. Information about the tools, equipment’s and machineries used in performing the job;

iii. Different performance standards relating to each aspect of the job; and

iv. Total accuracy and completeness by verifying the information with the job incumbent.

3. Job Description:

It is a written statement of the nature and context of a job. The contents of it are job title, identification of job by virtue of its department, group, title of post acquired and salary grade etc. It also shows the job summary in that the purpose of the job, functions or activities of the job. Some other information like responsibilities, duties, inter relationship among the job holders, tools, equipment’s and working conditions provided for job performance are also included in it.

4. Job Enlargement and Job Enrichment:

Job enlargement is the act of increasing the number of activities performed by an employee. Thus, it involves assigning additional same level activities to employees. Job enrichment is the act of redesigning jobs in a way that leads the employee that experience feeling of responsibilities, achievement, growth and recognition.

5. Negotiating and Contacting:

Within the HR planning issues the outsourcing serves primarily as a source of human resources for the organisation. All the initial stage, the HR plan determine the required number of people with required skills and capabilities and the roles to be executed. Then identified the gaps that exists in the HR plans or the shortage in the workforce in numbers or skills.

Outsourcing is one of many ways to fill this gap. The HR planners may contact with contractors and vendors to make the contact with appropriate negotiating process. The vendors takes a little part of ownership and operational responsibilities of the organisation with the purpose of improving business performance.

As such, the outsourcing firms with the part of negotiating and contacting different services like recruitment, selection, job specification and different competitive advantages in HR scenario and that are very needful in HR planning process.

Human Resource Planning – Responsibility of HR Department

Formulation of human resource plans is a shared task between top management, line managers, and HR department. Top management is involved in HR planning process because ultimately, it approves various plans of the organization as a whole.

Two types of plans are more seriously discussed at the level of Board of Directors of a company; one is financial plan including investment decisions and another is human resource plan particularly involving higher level managers. Thus, top management shares the responsibility of approving human resource plans and creating climate for undertaking systematic HR planning.

The second group of personnel involved in HR planning process is the functional managers under whom people work. Though these managers do not prepare overall human resource plans, they provide useful inputs which are used in the formulation of HR plans.

Ultimately, these managers are responsible for the effective utilization of human resources and, therefore, they must know what kind of personnel they need. HR department undertakes coordinative functions and various procedural activities which ultimately result in HR plan.

In this context, Pareek has observed as follows- “It is the top management responsibility to project shared vision and strategic plans of the organization into long-term vision and short-term goals. The projected vision and plans are then translated into human resource requirements for their respective departments by the line managers. Detailed analysis of required competencies in terms of levels and numbers are developed by personnel department.”

The responsibilities of HR department in HR planning process are as follows:

1. Showing operating management how systematic HR planning would ensure proper staffing in different departments.

2. Assisting, counselling, and even pressurizing the operating management to plan and establish objectives in their areas.

3. Collecting and summarizing data related to human resources organization-wide and evaluating their needs in terms of long-term objectives and other elements of the total organizational plan.

4. Providing research findings to make HR planning effective.

5. Monitoring and measuring progress of HR planning process organization-wide.

Human Resource Planning – Basic Aspects

HR planning involves “Planning for Future Needs” by deciding how many people with what skill the organization will need in the organization. In other words this approach can be termed as “finding the right person at the right number and right capabilities for the right positions in the organization”.

Hence the basic aspects of HR planning would involve the following:

a. Planning for future balance of workforce by comparing the number of needed employees to the number of present employees who can be expected to stay with the organization, which leads to

b. Planning for recruiting or laying off employees

c. Planning for the development of the employees to be sure the organization has a steady supply of experienced and capable personnel.

Four essential things should be added to HR planning to make it more strategic and useful for the organization.

These are:

a. Facilitate organization’s strategic goals and ensure that the HR system functions as a strategic partner to the top management.

b. Assess the readiness of the workforce in order to implement the overall HR strategy and also identifying knowledge gaps, study the organizational structural change needs etc.

c. Involved in the communication of the HR strategy at all levels in the organization.

d. Measure the result and implications of the HR functions in terms of contributing to the organization’s performance.

Planning staff levels requires that an assessment of present and future needs of the organization be compared with present resources and future predicted resources. Appropriate steps then be planned to bring demand and supply into balance.

Thus the first step is to take a ‘satellite picture’ of the existing workforce profile (numbers, skills, ages, flexibility, gender, experience, forecast capabilities, character, potential, etc. of existing employees) and then to adjust this for 1, 3 and 10 years ahead by amendments for normal turnover, planned staff movements, retirements, etc., in line with the business plan for the corresponding time frames. Hence it is evident that the HRP should need to integrate the bottom line of the organization with that of the top level of the organization.

The importance of aligning the HRP process with the strategic planning process in the organization could be achieved by effectively mapping the organization’s human capital architecture and recognizing the same as a part of the strategic objectives of the organization.

This mainly involves:

1. Identifying the “Core knowledge workers” in the organization (“Super-keepers”) – These are the employees who have firm-specific skills that are directly linked to the company’s strategy (Example- Senior software programmer).

2. Identifying the “Traditional job-based employees” or the so called “Keepers” – These include those employees with skills to perform a predefined job that are quite valuable to a company, but not unique. (Example- Security guard).

3. Identifying the employees whose skills are of less strategic value and generally available to all firms (Example- General Electrician).

4. Identifying the Alliance/partners – These involve those individuals and groups with unique skills which may not even be directly related to a company’s core strategy (Example- Independent product label designer).

Human Resource Planning – Importance: Progressive Personnel Needs, Enables the Organization to Cope with Change, Creating Highly Talented Personnel and Others

Manpower planning has been recognized only recently as an important part of the overall planning of any organization. Without procurement and maintenance of adequate number of personnel, it is not possible to realize the goals of the organization. MP is essential to put the plans of the organization into action for the achievement of certain goals or objectives.

Importance # 1. Future/Progressive Personnel Needs:

MP is very important from organizations points of view, simply because it helps to determine future personnel needs. The effective human resource planning fulfills the corporate need for quality workforce. It also determines the movement of the organization from the present human resource position to the anticipated one.

Importance # 2. It Enables the Organization to Cope with Change:

HRP enables an enterprise to cope with internal external changes such as changes in labour market, technology, product, government regulation, markets competitive hours, moreover changes in social, political cultural, educational areas. These type of changes generate changes in jobs content, its nature, skill require, number and type of personnel.

It ultimately results in either shortages or surplus of human resource. An adequate and sound human resource planning will help the enterprise to overcome this situation. In planning itself adequate provision is made to face both the situations.

Importance # 3. Attracting and Creating Highly Talented Personnel:

In modern era jobs are becoming highly intellectual and professionalized. Prospective employees are attracted towards such companies in which sound manpower planning is prepared. HRP facilitates increase in skills, abilities ad potentials of the workforce through training and development and thereby making the existing employees more talented, skillful, able and highly potential.

Importance # 4. Protection of Weaker Sections of the Society:

A well-conceived manpower planning programme would protect the interest of weaker section of the society such as SC / ST candidates, physically handicapped, backward class citizen etc. This section will enjoy a given percentage of jobs in a well and balanced plan of manpower.

Importance # 5. International Strategies Depend on HRP:

In the global world the need for human resource planning is increasing day by day. There is no barrier where to work in this global is a major challenge facing within or across national borders is a major challenge facing international businesses. In the absence of effective HRP, personnel recruitment, selection, placement training and development, career planning and the growing competition for foreign executives may lead to expensive.

Importance # 6. A Base for Personnel Functions:

Manpower planning is able to provide very valuable and basic information for designing. Redesigning and implementing personnel function such as recruitment, selection placement, induction, promotion, transfer, lay off, training and development etc.

Importance #7. Growing Investment in Human Resources:

Human resource is the live asset of the organisation. An organisation makes an investment in its personnel through training and development programme. Such employees develops their skills, abilities, knowledge and becomes a valuable asset of the business organisation. Therefore there must be a good HRP, which utilize their personnel throughout their careers.

Human Resource Planning – Types: Classification on the Basis of Level and Time Span

HRP is broadly classified on two bases:

I. On the basis of level

II. On the basis of time span

I. On the Basis of Level:

There are macro and micro-level of HR planning on the basis of following levels:

(i) Macro-Level Manpower Planning:

Macro-level human resources planning depends on the population development and planning issues in the same way as corporate human resource planning, the difference being that governments take-up the role of a planner and the canvass of operation is the entire country.

Majorly development issues are addressed for the entire population, employment generation, and improving the standard of living are issues for the entire nation. Planners deal with the issues of meeting current and future challenges that face the country.

They have to focus on regular and adequate levels of availability of human resources for the following country’s industry, agriculture, government machinery and national infrastructure, military and so on. So far as the micro-level plans, are concerned the challenges are in the areas of internal redundancies, excess manpower and similar issues.

At the macro-level, governments have to deal with the following issues of unemployment, educational policies and equitable distribution of employment opportunities for the whole system or of the country.

(ii) Micro-Level Manpower Planning:

Generally, micro-level refers to the planning done on a smaller, i.e., micro-scale as in the case of an organisation. Micro-level planning revolves around the manpower needs and requirements of an organisation. First the assessment of need and requirement is made. Thereafter the process of procuring the human resources is set in such motion.

An ideal procedure will be to try to assess the manpower need at each level of work, recruiting the manpower that is required according to the needed skills and also providing training where updating of skills is wanted.

Planning should take into consideration the supervision and other matters regarding staff discipline, monitoring and coordination. Human resource planning must be followed by human resource development to achieve the prerequisite set-up by the planning.

II. On the Basis of Time Span:

There are three main types of human resource planning on the basis of time span less than a year, more than one but less than two years and more than three years

(i) Short-Term Human Resource Planning:

The type of human resource planning refers to planning of staffing that is needed in the near future for a period not more than 1 year. It mainly involves a keen awareness of demand and supply, i.e., an awareness of what positions need to be filled and who in the workforce is available to fill those positions.

It is much easier to establish objective in short-term manpower planning. In comparison to long-term manpower planning Short-term manpower planning programmes include recruiting, selection and performance appraisal programmes. The time under evaluation being small the evaluation of programmes is easy.

(ii) Intermediate-Term Human Resource Planning:

It comprises of the time period of 2-3 years. More uncertainty is involved at every phase of intermediate manpower planning. Main focus is on forecasting demand and supply of labour and trying to adjust employee’s skills to match those that will be needed in the immediate future. Evaluation of programmes is less time-consuming under this plan.

(iii) Long-Term Human Resource Planning:

Long-term planning is the planning for a period more than two years. It is carried-out by highly experienced specialists. The aim is to arrange for the personnel before the position is vacant. Succession planning, i.e., growth, diversification, technological upgradation, etc., are the main reason for such plan.

Future manpower requirements are estimated with qualifications and capabilities. Plans are also made for individual development. Estimates for manpower planning should also be updated from time to time to keep them effective and efficient.

The main elements of long term manpower planning are as under:

(a) Estimating the future manpower requirements.

(b) Qualifications and capabilities of the existing employees and that of future manpower requirement.

Human Resource Planning – Effective Guidelines Followed to Increase Effectiveness

The following guidelines should be followed to increase effectiveness of human resource planning:

(i) Organised Effort:

Human resource planning function should be properly organised. A separate cell, section or committee may be constituted within the Human Resources department to provide adequate focus, arid to coordinate the planning efforts at various levels.

(ii) Support of Top Management:

To be effective, in the long-run, human resource planning must have the full support of top management. The support from top management is essential to ensure the necessary resources, cooperation and support for the success of Human Resources planning.

(iii) Size of Initial Effort:

Human resource planning fails because of lack of sufficient initial effort. To be successful, human resource planning should start slowly and expand gradually. Development of accurate skills inventory, and preparation of replacement chart are an integral part of human resource planning.

(iv) Coordination with other Management Functions:

To be effective, human resource planning must be coordinated with other management functions. Unfortunately, there is a tendency on the part of human resource planners to become totally absorbed in their own world keeping aloof from the other operating managers.

(v) Integration with Corporate Plans:

Human resource planning must be based on corporate objectives and plans. This requires development of good communication channels between organisation planners and the human resource planners. In many organisations, such a communication is lacking and the human resource plans are prepared in isolation of the fundamental organisational plans.

(vi) Involvement of Operating Managers:

Human resource planning is not a function of human resource planners only. Successful human resource planning requires a coordinated effort on the part of human resource department and the operating managers to develop human resources plans.

Approaches to Human Resource Planning – 3 Distinct Approaches: Social Demand, Rate of Return and Manpower Requirement Approach

HRP follows three distinct techniques:

1. Social demand approach

2. Rate of return approach

3. Manpower requirement approach

1. Social Demand Approach:

The social demand approach relies on the assessment of society’s requirement of education. In principle, it is an aggregate of individuals’ demand for education with respect to all individuals within the society. The approach is capable of revealing the number of students with different type of professional preparations that may be expected by a given target date.

Projections of social demand for education depend on aspects such as –

i. Incomes of educated people

ii. Tastes and preferences of households for education

iii. Preferences of domestic circles for education

iv. Demographic characteristics such as fertility and mortality

v. Direct costs of education

vi. Student grants

vii. Existing standards of entrance to institutes

Social demand approach has certain persistent problems associated with it. The main problem is associated with the database on demographic aspects such as district, block, or village, wastage of education, stagnation and break in education, intensity of utilization of existing educational facilities, and difficulties in predicting the future.

2. Rate of Return Approach:

The rate of return approach is a critic of social demand approach. As per this approach, after passing the school-learning age, people attach positive values to present and future benefits of education, and their careers on considerations. The rate of return approach treats education as a contributor to productivity, prompts students to decide whether to receive more education, and facilitates investment decisions in education.

Three parameters of rate of return approach are cost of education, returns to education, and present net worth (used in discounting future return to arrive at present value).

Conceptual issues involved in the rate of return approach are discussed below:

i. Investment in education has two-element taxonomy – direct and indirect cost

ii. Direct cost has two components- private expenditure and public expenditure in education

iii. Private expenditure is incurred by individuals (fees, hostel, books, etc.)

iv. Public expenditure comprises –

a. Creating, expanding, maintaining facilities

b. Publicizing need of education

c. Recurring expenditure in affiliating institutes

d. Expenditures towards students’ welfare

v. Non-recurring costs in developing building, plant and equipment, library, sports complex, etc.

vi. Indirect cost may be viewed from both private and social angles. From private angle, it is earnings foregone for studying. The social view point of indirect costs comprises opportunity cost of public expenditure on education.

In rate of return approach, returns to education are generally split into three categories, namely direct monetary benefits, indirect monetary benefits, and non-monetary benefits.

3. Manpower Requirement Approach:

Manpower requirement approach rests on the maxim or axiom that a definite link exists between education and economic growth, and lack of skilled manpower hinders the growth of any nation. In manpower requirement approach, an attempt is made to forecast future requirements of educated and skilled manpower to achieve a future target of Gross National Product (GNP) or specific targets of industrial production. Based on this approach, the planners indicate the directions of development of the education sector over the forthcoming years.

The basic steps in the manpower requirement approach are:

(a) Anticipating the direction and magnitude of development of each individual sector in the economy

(b) Evolving norms for engaging manpower in each individual sector duly considering the technological options, both present and future

(d) Estimating the educational equivalents of manpower requirements

(e) Analysing the propositions of estimates of educated manpower requirements for educational developments based on assumptions regarding enrolment rates, transition probabilities, and wastage and stagnation rates at each level of education

Human Resource Planning – 2 Unique Dimensions: Quantitative and Qualitative

1. Quantitative Dimension of HRP:

Sometimes the expressions hard and soft human resource planning are used. The former is based on quantitative and ensures that the right number and right sort of people are available when needed. Soft human resource planning is concerned with ensuring the availability of people with the right types of attitude and motivation, who are committed to the organization and engaged in their work and behave accordingly.

Quantitative dimensions of human resource planning at the macro level are determined by the size, composition, and quality of human resources. The rate of growth of human resources in turn is also influenced by these. The size is the result of population policy of the country. It is measured in terms of numbers. The population structure is constituted by the sex and composition of people. The knowledge, skill, capability, and the level of education constitute the quality composition of resources.

The sex and age composition of population are indicative of only the natural growth in it. Another factor which causes changes in the size of population is the net migration. If the net migration is positive, the population grows at a faster rate than is indicated by natural growth. On the other hand, if the net migration is negative, it causes decline in the rate of growth indicated by natural growth.

Changes in the size of the population do not cause changes in human resources. It is the change in that percentage of population which is actively engaged in economic activities that affects growth and quality of human resources. Such a percentage is known as labour participation rate in economic activity. It is this segment of the population whose function is to produce goods and services demanded by the whole population.

It is calculated as –

Labour participation rate = Total population x 100/Labour force

2. Qualitative Dimension:

The qualitative aspect of human resources, on the other hand, is affected by factors such as:

i. Education and training,

ii. Health and nutrition, and

iii. Equality of opportunity.

Quantitative and qualitative dimensions of human resource only regulate the supply of such resources. Its utilization, which results in the demand for the same, depends crucially on the functioning and flexibility of labour markets. The primary constituents of the labour markets are employers and the employees.

The structure of labour market in the macro analysis is determined by internal and external economic environment; technological progress and absorption; degree of labour mobility—sectoral, spatial, and occupational; and wage structure with reference to productivity differentials. Hence, labour market analysis should be the principal instrument of human resource planning, as it helps identify skill shortages and match the labour supply with demand.

For effective human resource planning, labour market information should be comprehensive, updated at regular intervals, and should throw light on the following:

i. Workforce,

ii. Unemployment,

iii. Underemployment,

iv. Manpower requirements by occupation, education, and experience,

v. Wages and earning structure,

vi. Job search plan,

vii. Work environment and industrial relation, and

viii. Inventory of different education/skill categories.

At the macro level, human resource planning involves taking a set of decisions on human resource developments for the economy as a whole. These decisions relate to generating employment opportunities, balancing between the demand and supply of the labour force in view of changes in technologies so as to avoid the problem of unemployment, underemployment, and overemployment; and also evolving/coping up with changes in technologies to help the process of economic development. Given the changes in growth of population and labour force, certain types of investment in health and nutrition, and education and training, contributing to the development of human resources are required.

Human Resource Planning – Process: Determining the Numbers to be Employed at a New Location, Retaining Highly Skilled Staff and a Few Others

Effective Human Resource Planning provides adequate lead time for the procurement and training of employees. It is all the more crucial because the lead time for procuring personnel is a time consuming process and in certain cases, one may not always get the requisite type of personnel needed for the job.

Non-availability of suitable manpower may result in postponement of delays in executing new projects and expansion programmes, which ultimately lead to lower efficiency and productivity. To overcome this, an organization must plan out its manpower requirements well in advance, so that it can compete effectively with its competitors in the market.

1. Determining the Numbers to be Employed at a New Location:

If organisations overdo the size of their workforce it will carry surplus or underutilised staff. Alternatively, if the opposite misjudgement is made, staff may be overstretched, making it hard or impossible to meet production or service deadlines at the quality level expected.

So the questions we ask are:

i. How can output be improved through our understanding the interrelation between productivity, work organisation and technological development? What does this mean for staff members?

ii. What techniques can be used to establish workforce requirements?

iii. Have more flexible work arrangements been considered?

iv. How are the staff we need to be acquired?

The principles can be applied to any exercise to define workforce requirements, whether it be a business start-up, a relocation, or the opening of new factory or office.

2. Retaining Highly Skilled Staff:

Issues about retention may not have been to the fore in recent years, but all it needs is for organisations to lose key staff to realise that an understanding of the pattern of resignation is needed.

Thus organisations should:

i. Monitor the extent of resignation.

ii. Discover the reasons for it.

iii. Establish what it is costing the organisation.

iv. Compare loss rates with other similar organisations.

Without this understanding, management may be unaware of how many good quality staff are being lost. This will cost the organisation directly through the bill for separation, recruitment and induction, but also through a loss of long-term capability.

Having understood the nature and extent of resignation steps can be taken to rectify the situation. These may be relatively cheap and simple solutions once the reasons for the departure of employees have been identified. But it will depend on whether the problem is peculiar to one organisation, and whether it is concentrated in particular groups (e.g., by age, gender, grade or skill).

3. Managing an Effective Downsizing Programme:

This is an all too common issue for managers. How is the workforce to be cut painlessly, while at the same time protecting the long-term interests of the organisation?

Human resources planning help by considering:

i. The sort of workforce envisaged at the end of the exercise.

ii. The pros and cons of the different routes to get there.

iii. How the nature and extent of wastage will change during the run-down?

iv. The utility of retraining, redeployment and transfers.

v. What the appropriate recruitment levels might be?

vi. An analysis can be presented to senior managers so that the cost benefit of various methods of reduction can be assessed, and the time taken to meet targets established.

If a CEO announces on day one that there will be no compulsory redundancies and voluntary severance is open to all staff, the danger is that an unbalanced workforce will result, reflecting the take-up of the severance offer. It is often difficult and expensive to replace lost quality and experience.

4. Where will the Next Generation of Managers Come From?

Many managers are troubled by this issue. They have seen traditional career paths disappear. They have had to bring in senior staff from elsewhere. But they recognise that while this may have dealt with a short-term skills shortage, it has not solved the long term question of managerial supply – what sort, how many, and where will they come from?

To address these questions, we need to understand:

i. The present career system (including patterns of promotion and movement, of recruitment and wastage).

ii. The characteristics of those who currently occupy senior positions.

iii. The organisation’s future supply of talent.

iv. This then can be compared with future requirements, in number and type. These will of course be affected by internal structural changes and external business or political changes. Comparing your current supply to this revised demand will show surpluses and shortages which will allow you to take corrective action such as –

a. Recruiting to meet a shortage of those with senior management potential.

b. Allowing faster promotion to fill immediate gaps.

c. Developing cross functional transfers for high fliers.

d. Hiring on fixed-term contracts to meet short-term skills/experience deficits.

e. Reducing staff numbers to remove blockages or forthcoming surpluses.

Human Resource Planning – 6 Major Barriers/Factors Responsible for Ineffective Planning of Human Resource

Effective HR planning is a pre-requisite for successful human resource management practices. However, there are certain factors — internal to the organization and external to it — which affect the effectiveness of human resource planning adversely.

Some of the more important factors are as follows:

Barrier # 1. Improper Linkage between HR Planning and Business Strategy:

Human resource management plays crucial role in strategic management of an organization and, therefore, it must be linked to strategic management process. In the absence of this linkage, neither HRM nor any of its subsystems will contribute effectively.

HR planning is the basis of further activities for HRM and, therefore, must be linked to strategic management process at the initial stage. However, many organizations fail to do so. As a result, either they do not have right personnel at right time or face the problem of excessive personnel.

Barrier # 2. Inadequate Appreciation of HR Planning:

Another problem that comes in the way of effective HR planning is the lack of adequate realization of role of HR planning. Many organizations which have not realized the importance of human assets in this competitive environment believe that people are available when they are needed because of increasing unemployment.

So, why they should go for elaborate process of HR planning. So far as unemployment factor is concerned, the argument may appear to be logical. However, the question arises whether these organizations will like to employ those who are unemployable or they need right type of persons.

It is not the quantity of persons that matters but it is the quality that matters. So long as the above belief is not changed, either HR planning exercise will not be taken or may not be effective.

Barrier # 3. Rigidity in Attitudes:

The third factor responsible for ineffective HR planning is the rigidity of attitudes on the part of top management as well as HR managers. This is more relevant in the case of those organizations which have named their personnel department to human resource department but retained the old culture.

In the old culture, human resources have been treated as subordinate factors. For such subordinate factors, elaborate planning is considered as luxury which these organizations would not like to afford.

Barrier # 4. Environmental Uncertainty:

The concept of environmental uncertainty involves the lack of prediction about the future behaviour of environment. It depends on complexity and variability of environment. Complexity involves the presence of too many heterogeneous factors in the environment and variability involves the rate of change in these factors.

High environmental complexity and variability create uncertainty and the exact behaviour of environment may not be predicted. Since planning, including human resource planning, involves commitment whose impact will be felt in some future period, environmental uncertainty makes this commitment, based on future projection, unrealistic.

For example, in industries where nature of jobs changes too fast or employee turnover rate is very high like information technology sector, HR planning turns to be less effective, thus, more meticulous HR planning is required for such a situation.

Barrier # 5. Conflict between Long-Term and Short-Term HR Planning:

Another source from where ineffectiveness in HR planning emerges is the conflict between long-term and short- term HR planning. In long-term HR planning, the organization has flexibility of matching its human resources and jobs. However, this flexibility is not available in short-term in which jobs have to be matched with existing personnel and some ad hoc arrangement is required.

Gradually, this adhocism becomes deep-rooted which affects entire human resource management process. For example, one of the major factors of management problems in public sector enterprises has been the adoption of this ad hoc approach.

Barrier # 6. Inappropriate HR Information System:

The effectiveness of HR planning depends on the timely availability of relevant information regarding the contingent factors which are considered while formulating human resource plans. Such factors are organizational strategy and action plans defining the volume and area of operations, nature of human resource market, employee turnover rate, employee productivity, etc.

If the HR information system has not been well developed in an organization, the projections for the future may at best be in the form of some pluses and minuses. We can easily appreciate the usefulness and validity of such projections. Sometimes, these projections become more frustrating than the nonexistence of such projections.