Human Resource

Planning
 HUMAN RESOURCE PLANNING
• Right number of people with right skills at
right place at right time to implement
organizational strategies in order to achieve
organizational objectives

• In light of the organization’s objectives,

corporate and business level strategies, HRP
is the process of analyzing an organization’s
human resource needs and developing plans,
policies, and systems to satisfy those needs.
 Purpose of HR Planning

Effective HR
Planning

Right Right Right Right

people capabilities times places
Steps in Recruitment and Selection Process

The recruitment and selection process is a series of hurdles aimed

at selecting the best candidate for the job.
Linking Employer’s Strategy to Plans
HUMAN RESOURCE PLANNING

Setting human Ensuring HR

resource resource supply
objectives and meets human
deciding how to resource
meet them demands
 Think
• Does any organization face problems which
can be sorted with HRP?
• Is HRP a part of any organization, department,
functional stream in an organization?
• Does HRP have any role in entrepreneurial
venture?
 HRP Types
Soft
Ensuring the availability of
people with right type of
attitude and motivation
who are committed to the
organization and engaged
in work as well as behave
properly.
Hard
Quantitative analysis in
order to ensure that the
right number and right
sort of people are
available.
 Hard Soft
Forecasting Define where the
company is now

Analysis Define where it wants to

Monitoring and be in the future
review Analysing the external
environment, influences
and trends
Formulating plans to
implement necessary
changes
• Macro – HRP – Population planning and
control, literacy and education, health and
medical care, housing.

• Micro – HRP
• Dimension of HDI
• A long and Healthy life
• Knowledge
• A decent standard of living
 HDI
Composite measure of the three dimensions:
• Life expectancy index
• Education index
• Standard of living of human development
Gross National Income (GNI)
 Aim of HRP
• Attract and retain competent employees
• Anticipate the problems of potential surpluses
or deficit of people.
• Develop a well trained and flexible workforce.
• Reduces dependence on external recruitment
when key skills are in shortage.
• Improve the utilization of people by
introducing more flexible systems of work
 HR Forecasting
Strategic HR Planning

Forecast HR Forecast HR
requirements (demand) availability (supply)

Yes Match? No

Develop programs to Develop programs to

increase supply or decrease supply or
reduce demand increase demand
 The HR Planning Cycle has
four general stages:
1. Forecasting future demand of HR
2. Forecasting future internal supply
of HR
3. Forecasting future external supply
of HR
4. Formulating responses to the
forecasts
 Business
HRP Process Strategic
Plans

Resourcing
Strategy
Labour
Scenario Demand /
Turnover
Planning Supply
Analysis
forecasting
Operational
Work environment Human Resource
effectiveness
analysis Plan
analysis

Resourcing Retention Flexibility Productivity

Work
Environment
Stage 1: Forecasting Future Demand (2)

Techniques Used to Forecast Demand:

1 Systematic Techniques
– Time series or ratio trend analysis
– Work-study approach
– Productivity trend analysis
2 Managerial Judgement
3 Working back from costs
Stage 2: Forecasting Internal Supply

• Involves identifying/acknowledging the

existing staff employed by an organisation
– department by department
– grade by grade
• Involves:
– Skills Audits
– Predicting Staff Turnover
– Internal promotion analysis
Stage 3: Forecasting External Supply

• Filling the GAP using the external labour market:

– Local
– National
– International

• HR Planners must gain an understanding of the

dynamics of the Labour Market to update plans
as trends change and develop accordingly.
 Stage 3: Forecasting External
Supply / Dynamics of the Labour Market
• The following statistics can be most useful
– General population density
– Population movements
– Age distribution
– Social class
– Unemployment rates
– School leavers
– Proportion with higher education
– Skill levels
– Skills shortages
• Sources of Info include: ‘Labour Market Trends’, Labour
Market Quarterly, Annual Social Trends survey, Chamber of
Commerce, Training and Enterprise Councils
 Stage 4: Formulating Responses to
the Forecasts/Action Planning
• Forecasting should identify any potential
mismatch between future demand and supply
• If demand exceeds supply – develop plans to
match the shortfall
• If supply is likely to exceed demand – develop
plans to reduce the surplus
(Taylor, 2002; Beardwell and Claydon, 2007)
HR Forecasting Example Methods
 Individual/Organizational
Relationships
• The Psychological Contract
– The unwritten expectations employees and employers have
about the nature of their work relationships.
• Affected by age of employee and changes in economic conditions.
• Focuses on expectations about “fairness” that may not be defined
clearly by employees.
• Psychological Ownership
– When individuals feel that they have some control and
perceived rights in the organization, they are more likely to
be committed to the organization.
HR Forecasting Example Methods (cont’d)
 Labor Markets
• Labor Markets
– The external supply pool from which organizations
attract their employees
• Unemployment Rates and Applicant
Population
– Low unemployment creates competition for
employees, raising labor costs.
– High unemployment results the availability of
more applicants and more qualified applicants.
Managing a Talent Surplus

Reduction in Work Hours

or Compensation

Attrition and Hiring

Freezes
Workforce
Reductions
Voluntary Separation
Programs

Workforce Downsizing

2–25
 Managing a Talent Shortage
Use
overtime

Implement
Outsource
alternative work
work Tactics to arrangements
Reduce
a Talent
Shortage
Bring back Use contingent
recent retirees workers

Reduce
turnover
• Labour Turnover
(Number of leavers in a specific period (usually 1
year) * 100)/ Average no. of employee during
the same period
• Stability Index
(No. with 1 year’s service or more *100)/
Number employed 1 year ago
Alternatives to Deal with Employee Shortages and Surpluses
 Rightsizing

To reduce (as a workforce) to an optimal size

 HRP at Micro level
Micro level HRP is a strategy for the acquisition, utilization, and retention of
human resource in an organization. It seeks to link policy and practice in
day-to-day decision making. Micro level HRP follows the four stages of
investigation, forecasting, planning and control of manpower and utilization.
Each stage requires a careful analysis by the researcher to ultimately decide
the optimum manpower for the organization.

Timescale of HRP Forecasts

Timescale of human resource forecasts helps HR managers to decide the

availability of human resources and chart the possible action plan to meet
the requirements.
 Quantitative Tools for Forecasting
Workload analysis and time series analysis are two developed models
for human resource forecasting.

Workload analysis takes into account present and future workload,

duly quantifying the work content in every area of an organization. It is
done by classification of work, forecasting the number of jobs,
converting the projected jobs in man-hours, and then converting the
man-hours into manpower requirement.

Time series analysis uses employment data over a time period duly
considering the trend, cyclical effects, seasonality, sudden change,
random fluctuations, etc. Moving average and exponential smoothing
are two popular methods used in HRP using time series analysis.
 Quantitative Tools for Forecasting
Managerial Judgement
Managers have to make a judgement about the future employment levels. Such
judgemental decisions are based on their past experience. Combining quantitative
toolsmwith managerial judgement yields better results.

Delphi Technique
It is a group process to achieve a consensus forecast. This method calls for selection
of a panel of experts either from within or outside the organization. The comments of
these experts are extracted from a series of questionnaires and then used as the
basis for forecasting.

Nominal Group Method

This method also involves a panel of experts. However, in Delphi Method experts are
not allowed to discuss among themselves; in the Nominal Group Method experts are
given the opportunity to discuss among themselves. The coordinator assumes the role
of a facilitator. Experts are asked to rank their ideas according to their perceived
priority, and then group consensus is analyzed mathematically.
 Analysis of Manpower Supply
Analysis of manpower supply is also done using some quantitative techniques. Some
of the well known techniques are:

Wastage Analysis – Manpower wastage is an element of labour turnover. Wastage

refers to the severance from the organization due to voluntary retirement, normal
retirement, resignation, deaths, and dismissals.
Wastage Analysis can be done through assessment of labour turnover index and
stability index. The labour turnover index indicates the number of employees who
have left as a percentage of the average number of employees. The stability index
indicates the stable workforce percentage for a given period.

Cohort Analysis - Cohort Analysis takes into account the length of service as an
important variable in wastage analysis.

Census Analysis - Census Analysis uses the age-specific date to identify a general
pattern of manpower wastage.
Thank You…