Steps in Process of Human Resource Planning

Question: What is Human Resource Planning? Describe the steps in Human Resource Planning?

Human Resource Planning (HRP) is the process of analysing and strategising the organisation's current and future human resource needs based on goals and vision of the organisation. It is essentially concerned with the process of estimating and projecting the supply and demand for different categories of personnel in the organisation for the years to come.

According to E.W Vetter, Human Resources Planning is defined as - "a process by which an organisation should move from its current manpower position to its desired manpower position. Through planning management strives to have the right number and right kind of people at the right places at the right time, doing things which result in both the organisation and the individual receiving maximum long-run benefit".

According to Leon C Megginson, Human Resources Planning is "an integrated approach to performing the planning aspects of the personnel function in order to have a sufficient supply of adequately developed and motivated people to perform the duties and tasks required to meet organisational objectives and satisfy the individual needs and goals of organisational members".

Steps in the Process of Human Resource Planning

Steps in the Process of Human Resource Planning
1. Analysing Organisational Plan

In the process of HRP the first step is to study the organisational objectives and plans. The objectives to be achieved in future in various fields like - production, finance, expansion, marketing and sales gives the idea about the volume of future work activity.

The future organistional structure and job design should be made clearly and changes in the organisational structure should be examined properly so as to anticipate its future manpower requirement.

2. Forecasting Demand for Human Resources

In the process of human resource planning it is important to forecast the human resource requirement in future at different positions according to their job profile.

Human resource demand forecast­ing is often subdivided into long-range and short-range forecasts because there are certain requirements of human resources for the long term and at times the human resource requirement is to meet the short-term objectives, goals, or targets.

a) Long Range Forecasting
  • The firm's long range Business Plans - For example: an automobile manufacturing organisation may go for automation in future and replace some of its man power with robots. Obviously, it will reduce demand for man power in future and it should be considered in working out the future manpower requirement.
  • Demographic Changes - For example : an aging workforce in an aging world. People are not only living longer, but they are working longer. The demographic shift towards an aging workforce brings both unprecedented opportunities and challenges for organisations that want to attract and retain talent.
  • The Economic Conditions- During prosperity as the businesses boom more workforce is required and on the other hand during recession the under utilised employees or workers are temporarily or permanently fired. Though economic predictions are tough to make with accuracy, some considerations must be given to economic activities in planning for human resource requirements.   
  • Technological Trends - Advances in technology have definite ef­fects on the nature and mixture of jobs available. For example, advances in computer technology resulted in a decrease in the number of book-keepers, and an increase in the number of com­puter programmers.
  • Social-cultural Trends - The socio-cultural trends prevailing in an economy are another important parameter effecting the human resource planning as it directly influences the number and the nature of people seeking jobs, especially in case of women and people from minority groups. The social factors also play an important role in affecting the movement of labour from rural to urban areas which again has its impact on the human resource planning.
b) Short Range Forecasting
  • Production Schedules and Budgets - Some plans must be made concerning the amount of work that each segment of the firm is expected to accomplish during some coming period and manpower requirements need to be worked out accordingly.
  • Human Resource Objectives - The basic goals or objectives to be followed by the human resource department also play an impor­tant role in working out the human resource requirements. For example if the goal is to hire some minimum percentage of minorities or females in the workforce this definitely will be taken into consideration while working out the human resource plan.
  • Relocations, Mergers, Acquisitions, or Plant Closures - The HR people should always be informed about such changes as soon as possible so that they should be able to make arrangements to adjust the manpower wherever required and ensure the termination of employees in a nice and congenial atmosphere.

3. Forecasting Supply of Human Resources

Though the available supply of human talent would appear to be easier to determine than projected needs, there are a number of complexities in this decision as well. In projecting future availability, the following factors are usually considered:
  • Current Inventory - Maintaining proper personnel records are essential to indicate the availability of talent in various jobs, units and divisions within the firm. For example, an ‘inventory card’ should be maintained by the organisations, so that whenever there is a requirement for human resource the first thing an organisation should do is to check the availability from within. If possible the requirements should be filled in from within and if not possible then the entire hiring process should start.
  • Productivity Levels - It is important for the organisation to consider the producti­vity levels to forecast the future workforce requirements.
  • Turnover Rate - The rate of turnover for the organisation is an important parameter affecting the human resource planning for future. The turnover takes into consideration separations, quits, discharges, retirement, death, replacements, etc. An organisation having a high rate of turnover will have to go for frequent hiring exercises and vice versa.
  • Absenteeism Rate - Absenteeism obviously reduces the number of personnel actu­ally available for work. If the monthly absenteeism rate is around 4 per cent, this means that on the average only 96 per cent of people are present each day and are ready to work.
  • Movement Among Jobs - Some jobs are sources of personnel for other jobs; for example, secretaries may be obtained by the pro­motion of typist, and branch managers are obtained from a pool of section managers through internal transfers. So it is important for the human resource executives to take such internal move­ments into account before finalising the requirements for hiring from outside for meeting their future human resource require­ments.

4. Identifying Human Resource Gap

Manpower gaps can be identified by comparing demand forecasts and supply forecasts, such types of comparison will either help in deficit or surplus of human resources in future.

Deficit means the number of people recruited from outside whereas surplus implies people to be redeployed or terminated. Employees estimated to be deficient can be trained whereas employees with higher skills may be given more enriched jobs.

5. Future Course of Action

When the manpower gaps are identified plans are prepared to bridge these gaps. Plans to meet the surplus manpower may be redeployment in other departments and retrenchment in consultation with trade unions. People may be persuaded to quit voluntarily through their own wish. Deficit can be met through recruitment, selection, promotion, transfer or training methods.

6. Controlling

It implies checking, verifying and regulating to ensure that everything occurs in conformity with the plans adopted and the instructions issued. Such monitoring helps to minimise the gap between desired results and actual performance. Controlling the management of human resources involves auditing training programmes, directing morale surveys etc.