What is human resource planning?
Human resource planning is the process of acquiring and utilizing human resources in the organization. It ensures that the organization has the right number of employees at the right place and time so that human resource problems will be solved. Human resource planning facilitates the manager in what should be done to ensure the availability of human resources needed by the organization to meet its goals. Many organizations pay less attention to the proper plan and utilization of human resources. The demand and supply of manpower determine the right number of people. The demand for manpower is derived from current and future business operations whereas manpower supply is determined by the internal and external availability of people.
According to R.S. Schuler, “Human resource planning involves forecasting human resource needs for the organization and planning the step necessary to meet these needs.”
Thus, in brief, human resource planning is the process of forecasting, developing, and controlling human resources in the organization.
Characteristics of Human Resource Planning
Human resource planning is the primary function of human resource management in an organization. The main characteristics of HR planning are as follows.
Goal-directed
HR planning focuses on achieving HR goals and organizational goals. HR planning directly links with the organizational strategy. Human resources are required to implement the business strategy of an organization effectively and efficiently.
Future-oriented
HR planning helps to estimate the demand and supply of manpower for the future to achieve a company’s objectives. It also checks the number of manpower required and estimates to recruit externally or internally.
Qualitative and quantitative
Human resource planning estimates require some employees both on a qualitative and quantitative basis. The right number of employees with the right skills and competencies at the right time is the most important work of a human resource manager.
Part of corporate planning
HR planning works in a direction to achieve organizational objectives. It can be formulated at strategic, tactical, and operational levels. HR planning greatly contributes to get broad corporate goal of the organization.
Cost-effective and efficient
HR planning assists in using the workforce cost-effectively and efficiently. It avoids overstaffing and underutilization of human resources.
Importance of Human Resource Planning
Human resources are the most important assets and their effective management is a key to its success. Therefore, every organization needs human resource planning to meet its future human resource requirements. The importance of human resource planning can be highlighted as.
Reduces uncertainties
Human resource planning is done to minimize future risks and uncertainties by forecasting the needs of technical and other manpower for the future. It matches demand and supply to determine the shortage of human resources in terms of quality and quantity.
Adaptation of environment
Human resources planning is an important process to link business strategy and its operations to organizational goals. Human resource planning follows different procedures if the impact of technology changes on new jobs and new skills.
Facilitates in acquisition of human resource
Human resource planning is one of the most important steps in acquisition, which is concerned with matching the organizational demand for quantity and quality of employees with available supply. Recruitment and selection of employees to fulfill job vacancies is a vital stage for effective results.
Human resource development
Human resource planning is important for planning the investment in the development and utilization of human resources. Human resource planning provides adequate time for planning of training and development programs.
Effective and efficient utilization of human resources
Any investment in human resource activities is considered an investment for the future growth and development of the organization. Human resource costs can be controlled to achieve efficiency through planning. Human resource planning ensures the right number and type of human resources at the right time doing the right job.
Process of Human Resource Planning
The human resource planning is completed in the following five phases:
Assessing current human resource
the first step in the human resource planning process requires assessing the current status of the organization’s human resources. This is an internal analysis that includes the inventory of employees and skills already available within the organization and a comprehensive job analysis. This step looks at jobs currently being done and the people doing those jobs. Thus the assessment of the current human resource situation is based on:
- Human resource inventory
- Job analysis
Demand forecasting
Once information about the current status of human resources is analyzed and human resource objectives are determined, the next step is to make a human resource forecast to meet the future manpower requirements of the organization. This step analyzes future human resource needs in terms of quantity and quality. Demand forecasting consists of an organization’s objectives and policies. They provide future direction to the organization.
Supply forecasting
Supply forecasting measures the quantity of human resources available internally and if not available internally, then an external source of information is required to recruit. Therefore, this step estimates the future source of supply of human resources from inside and outside of the organization. The human resource demand of an organization can be fulfilled from the two sources of supply:
- Internal supply
- External supply
Matching demand and supply of human resource
This step makes the balance between demand and supply. It is the results that balance both shortages and overstanding. If the organization predicts a shortage of human resources, then demand is increased, and if overstaffing is predicted then expenses should be cut down. Individual, who wants to quit and lay off the job, can be expected to cut down. The human resource manager must plan how to recruit different people for different positions needed and available within the organization and outside.
Action plans
This is the final step, which is concerned with the action plans to meet the needs of human resources. The success of an organization depends on how well its human resources are managed and utilized. for human resources planning to be successful, the human resource manager must ensure that there is a balance between quantitative and qualitative approaches to human resource planning.
Forecasting Human Resource (HR) Demand
Human resource demand forecasting is the process of identifying and estimating required human resources in the future. Forecasting future human resource demand is an important aspect of HR planning. This forecasting should be in terms of quantity and quality. To forecast human resource demand, there is a wide range of options in the methods to be adopted.
Management judgment
This method applies the opinion of experts to predict the future. Small-scale organizations, that do not have systematic databanks, adopt this method. In this method, the manager and supervisor who are familiar with the efficiency, ability, and workload of employees, think about the future capabilities of employees. There are three basic approaches, which help to forecast demand.
Bottom-up approach
It is concerned with the information required to send to top officials who compare this information with the organizational plans make necessary adjustments and finalize them.
Top-down approach
In this approach, management prepares the requirements and sends that information down.
Participative approach
It is the best approach to decide on the human resource needs. Management and supervisors estimate requirements through participation.
Statistical techniques
Large organizations use statistical techniques to forecast HR Demand. Statistical analysis can establish the quantitative relationship between manpower and other factors of production. Trend analysis predicts the future by studying past and present trends. Using this statistical technique, an estimation of future human resources is obtained by establishing its relations with the past production, sales, and business levels.
Work-study technique
Work study is particularly suitable for production line work and short-term projects. It indicates how much time an operation should take to complete. Total production and activities in terms of units are estimated in a year. The number of man-hours required to perform/produce each unit is carefully calculated.
e.g., planned output for the next year =100000
standard man-hour per unit =2 hrs.
No. of workers =50