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Human Resource Planning

Definition of HRPHuman resource planning can be defined as the process of ensuring the right number of qualified people,into the right job at the right time to deliver the results in an efficient and effective manner.

Human Resource Planning (HRP)Is the first component of HRM strategyAll other functional HR activities are derived from and flow out of the HRP process.Has its basis in considerations of future HR requirements in light of present HR capabilities and capacities.Is proactive in anticipating and preparing flexible responses to changing HR requirements.Has both an internal and external focus.

Vision: what do we want to create.Mission: An enduring statement of purpose that distinguishes one company from other similar companies.Objective: Accomplishment of mission of an organization requires the formulation of a no. of objectives.e.g.: The objective of Hero Honda is to enhance is to enhance market share.Goals: goals are derived from objectives. goals are precise, clear & specific. e.g.: Goal to achieve the obj. of Hero Honda is to inc. sales by two lakhs .

Strategy: Unified course of action to achieve goals.e.g.: the goal can be achieved by reducing the price by reducing the production cost.Or By improving the production design.OrBy increasing the fuel efficiency.

HRP and Strategic PlanningStrategic Analysis What human resources are needed and what are available?Strategic FormulationWhat is required and necessary in support of human resources?Strategic ImplementationHow will the human resources be allocated?

Human Resource PlanningStrategicPlanning

Influence of Strategic Planning on HRPStrategy HRP requirement

Expansion: Additional HR of existing categoriesDiversification: Additional HR of diff. categoriesM&A: Reduction of HR of managerial positions.Retrenchment: Reduction of HR of almost all the categories through VRS and other means.

HR Planning IssuesStaffing Questions:How do we manage staffing in times of recession or expansion?What impact does technology change, mergers or relocation have on staffing issues?Do we always have the right people in the right jobs at the right time?How do we get our human resources: buy them or make them or both?

Major Objectives of HRPPreventing understaffing and overstaffingEnsure the organisation has the right employees with the right skills at the right place at the right timeEnsure the organisation is responsive to changes in its environmentProvide direction and coherence to all HR activities and systems

HRP processForecasting (future requirements/ Demands)Inventorying(present strength/ supply)Anticipating(comparison of present and future requirements)Planning(necessary programme to meet future requirements)

Human Resource Planning ModelFORECASTING DEMANDConsiderations Technology Financial resources Organizational growth Mgmt. philosophy

TechniquesTrend analysis Managerial estimates Delphi technique

Techniques HR inventories Replacement charts Succession Planning

External Considerations Wkforce changes Mobility Govt policies Unemployment

FORECASTING SUPPLYBALANCING SUPPLY AND DEMAND(Shortage) Recruitment Full-time / Part-time(Surplus) Reductions Layoffs Terminations Demotions Retirements

Forecasting Demand for EmployeesForecasting Demand

Quantitative Approach: Trend Analysis Example of Trend Analysis of HR Demand2003 Rs. 3,61311.123252004 Rs. 3,74811.123372005 Rs. 3,88012.523102006 Rs. 4,09512.523272007 Rs. 4,28312.523422008 Rs. 4,44612.52355BUSINESS LABOR HR FACTORPRODTYDEMANDYEAR(SALES IN 000)(SALES/EMPLOYEE)(NO. OF EMPLOYEES)=

Qualitative Approaches to Demand Forecasting Management ForecastsThe opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organizations future employment needs.Delphi TechniqueAn attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.The final forecast represents a composite group judgment.

Forecasting Supply of Employees: Internal Labor SupplyStaffing TablesReplacement ChartsSuccession Planning

Forecasting Internal Labor SupplyStaffing TablesGraphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements.

Replacement ChartsListings of current jobholders and persons who are potential replacements if an opening occurs.

An Executive Replacement Chart

Existing inventory at a future date is calculated as follows:Future supply of HR=present inventory as on today + Potential additions Potential losses.

Note:Potential additions: includes transfers, promotions in , demotion in & new hires.

Potential losses: includes VRS,death,dismissals,retirement.

HRP ConsiderationsBalancing supply and demand

Dealing with surplus Manpower.RetrenchmentOutplacementLay-OffsLeave of absence without payLoaningWork SharingReduced work hoursEarly/ Voluntary retirementAttrition

Requisites for Successful HRPHRP must be seen as equally vital as business planningTop-management supportPeriodic review and revision of the forecasting techniques and the forecastsWithout long range planning concentration becomes focussed on short-term needs resulting in crisis management reactionsAn excellent and up-to-date HRISActive involvement of line managers and co-ordination between line mgrs and HR function