Everything you need to know about human resource planning. Human resource planning is the process by which the organisation ensures that it has the right number and right kind/type of people in right places, at the right time, effectively performing organisational tasks and helping in the achievement of organisational objectives.
Human Resource Planning is the predetermination of the future courses of action from a number of alternatives for procuring, managing, motivating, compensating, career and succession planning, promoting and separating the human resources of an organisation.
Learn about:-
1. Introduction to Human Resource Planning 2. Definitions of Human Resource Planning 3. Concept 5. Objectives 6. Characteristics 7. Levels
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8. Importance 9. Responsibilities of HRM Department in Regard to HR Planning 10. Factors 11. Activities 12. Forecasting Methods 13. Roles 14. Steps
15. Quantitative Aspects 16. Approaches 17. Models 18. Barriers 19. Benefits 20. Limitations 21. How to Minimize Problems Related to Human Resource Planning.
Human Resource Planning: Definitions, Concept, Need, Methods, Steps, Models, Barriers, Benefits, Limitations and Other Details
Contents:
- Introduction to Human Resource Planning
- Definitions of Human Resource Planning
- Concept of Human Resource Planning
- Objectives of Human Resource Planning
- Need for Human Resource Planning
- Characteristics of Human Resource Planning
- Levels of Human Resource Planning
- Importance of Human Resource Planning
- Responsibilities of HRM Department in Regard to HR Planning
- Factors Affecting Human Resource Planning
- Activities of Human Resource Planning
- Forecasting Methods Used for Human Resource Planning
- Roles of Human Resource Planning Teams
- Steps or Stages in Human Resource Planning
- Quantitative Aspect of Human Resource Planning
- Approaches of Human Resource Planning
- Models of Human Resource Planning
- Barriers to Human Resource Planning
- Benefits of Human Resource Planning
- Limitations of Human Resource Planning
- How to Minimize Problems Related to Human Resource Planning
Human Resource Planning – Introduction to HRP
E.W. Vetter viewed human resource planning 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-term benefit”.
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According to Leon C. Meggison human resource 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 arid goal of organisational members.”
The United Kingdom Institute of Personnel Management in 1989 defined human resource planning as- “The systematic and continuing process of analysing an organisation’s human resources needs under changing conditions, and developing personnel policies appropriate to the longer term effectiveness of the organisation. It is an integral part of corporate planning and budgeting procedures since human resource costs and forecasts both affect, and are affected by longer term corporate plans”.
Human resource planning may be viewed as foreseeing the human resource requirements of an organisation and the future supply of human resources and (i) making necessary adjustments between these two and organisational plans; and (ii) foreseeing the possibilities of developing the supply of human resources in order to match it with requirements by introducing necessary changes in the functions of human resource management. In this definition, human resource means skill, knowledge, values, ability, commitment, motivation etc., in addition to the number of employees.
Human Resource Planning determines the human resource needs of the whole organisation arid also of each of its departments for a given period in future to accomplish various activities, functions and operations envisaged in connection with the achieving the organisational goals and objectives.
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Human Resource Planning is the predetermination of the future courses of action from a number of alternatives for procuring, managing, motivating, compensating, career and succession planning, promoting and separating the human resources of an organisation.
Human Resource Planning or Manpower Planning involves identifying staffing needs by analysing properly the available human resources and determining what additions and/or replacements are required in order to maintain the staff of the desired size and quality. It can be at different levels and for different purposes. At the national level, manpower planning is done by the Government for economic development, such as population projections, educational facilities, etc. Such manpower planning is also known as macro-level planning.
Managing human resource is an important function of any entire organisation. It is a process of identifying, maintaining and enhancing the knowledge, skill and the ability of the individual’s in the workplace. The enhancement of these qualities of an individual must be related to the organisational goals and objectives. In the 21st century, the concept of Human Resource Management (HRM) is becoming slowly outdated and the emerging concept, i.e., Human Resource Planning (HRP) is becoming more prominent.
HRP is a more forward looking approach than the management of human resource. Human resource planning assesses the human resource requirement in advance keeping in view the market condition, production schedule, employees’ level of motivation and availability of resources. HRP is the integral part of the overall corporate plan. The importance of HRP can be clearly identified by discussing its importance and objectives.
Human Resource Planning – Definitions by Some Eminent Authors
Human resource is the knowledge, skill, creative abilities, talents and aptitude of persons working in an organization. But Human Resource Planning is planning of human resource requirement in terms of number and quality. It is the determination of man power requirement of an organization and preparing the plans to obtain this requirement.
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According to Beach “Human resources planning is a process of determining and assuming that the organization will have an adequate number of qualified persons, available at the proper times performing jobs which meet the needs of the enterprise and which provides satisfaction for the individuals involved.
In the words of Geisler, ” Human Resource Planning is the process including forecasting, developing and controlling by which a firm ensures that it has the right number of people and the right kind of people at the right places at the right time doing work for which they are economically most useful.”
Thus, HRP is concerned with determination of man power requirement in terms of number and quality for an organization.
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Following are some definitions of ‘HRP’ or ‘MPP’ which throw light on different aspects of human resource or manpower planning:
Lean C. Megginson – “Human Resource Planning is an integrated approach in 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”.
E. B. Geisler – “Manpower planning is the process – including forecasting, developing and controlling – by which a firm ensures that it has the right number of people and the right kind of people, at the right places, at the right time doing work for which they are economically most useful”.
Eric W. Vetter – “Manpower planning is the process by which management determines how the organisation should move from its current manpower position to its desired manpower position. Through planning, management strives to have right number of and the right kind of people at the right place at the right time, doing things which result in, both the organisational and the individual, receiving maximum long run benefits”.
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Wendell French – “Human Resource Planning is the process of assessing the organisation’s human resources needs in the light of organisational goals and making plans to ensure that a competent, stable work force is employed”.
Leap and Crino – “Human Resource Planning includes the estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, and what, if anything, must be done to ensure that personnel supply equals personnel demand at the appropriate point in future”.
Decenzo and Robbins – “Human Resource Planning is the process by which an organisation ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organisation to achieve its overall objectives”.
Coleman – Human Resource or Manpower Planning is “the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organisation”.
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Strainer – “Manpower Planning is “strategy for the acquisition, utilisation, improvement and preservation of an enterprise’s human resources. It relates to establishing job specifications or the quantitative requirements of jobs determining the number of personnel required and developing sources of manpower”.
Gordon MacBeath – “Manpower planning involves two stages. The first stage is concerned with the detailed planning of manpower requirements for all types and levels of employees throughout the period of the plan and the second stage is concerned with Planning of manpower supplies to provide the organisation with the right types of people from all the sources to meet the planned requirements”.
James J. Lynch – Manpower planning is “The integration of manpower policies, practices and procedures so as to achieve the right number of the right people at the right jobs at the right time”.
Human Resource Planning is a continuous process of identifying human resource requirements for an organisation in terms of quality and quantity. It is a strategy for the acquisition, utilisation, improvement and preservation of an organisation’s human resources.
It cannot be rigid or static. It requires modifications, review and adjustments according to the needs of an organisation in the changing business environments. Planning activities focus on the future. These consider how an organisation should move from its current human resources condition to achieve its human resource objectives.
Human Resource Planning helps to establish the links between the organisation’s overall strategies and its human resource strategies. It is mainly concerned with how to integrate all human resource decisions into a coherent overall resource strategy.
Human Resource Planning – Concept of HRP
Human resource planning is the most important element in a successful human resource management system. A survey in 1980s reported that 85 per cent of Chief Executives listed Human Resource Planning as one of the most critical management function which is still valid in this decade. But what do we mean by Human Resource Planning?
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Human resource planning is the process by which the organisation ensures that it has the right number and right kind/type of people in right places, at the right time, effectively performing organisational tasks and helping in the achievement of organisational objectives.
In the past, human resource planning tended to be a reactive process. It was being done according to the business needs but at the eleventh hour. For example, if an organisation decided to expand, manpower planning was done only after the expansion. Today, the changes in the business scenario and the competitive atmosphere demand for the integration of business planning and human resource planning.
Human resource planning is now a forward looking function which helps in assessing the human resource requirements in advance which helps the business schedules, market analysis and expansion/acquisition plans. To address the human resource concerns systematically, organisations have started adopting short-term and long-term solutions. These have taken into account the rapid changes in technology and developments in the market.
The purpose of human resource planning is to assess the future supplies and demands for human resource in connection with where the organisation is, where it is going and its implications on human resource. Attempts are made to match the supplies and demands, making them compatible with the achievement of organisation’s future needs.
Human Resource Planning – 11 Important Objectives of HRP
Following are the important objectives of human resource planning:
1. To assess manpower needs for the future and to make plans for recruitment and selection in the organisation.
2. To assess the requirement of skills in the future.
3. To determine the training and development needs of the employees.
4. To control the costs of wages and salaries.
5. To anticipate the surplus or shortage of staff and to avoid unnecessary detention or dismissals.
6. To ensure the optimum use of human resources in the organisation.
7. To help the organisation in coping up with the technological development and modernisation.
8. To ensure career planning of every employer of the organisation and to make succession programmes.
9. To ensure higher labour productivity.
10. To maintain pleasant industrial relations by maintaining optimum level and structure of human resource.
11. To minimise the imbalances caused due to non-availability of human resource of the right kind, in right number, at the right time and right place.
Human Resource Planning – Need for Human Resource Planning
Below given are some of the needs for human resource planning:
1. To meet the manpower requirement of an organisation and also forecasting the cost of labour.
2. Expansion of an organisation is the basic indication of the growth of the organisation and human resource planning is required to keep the production at the highest level to meet the increasing demand for the products in the marketplace.
3. Due to technological changes, the management may require skilled labour. Existing employees are to be provided with training and new employees are to be inducted after proper training and HRP plays a major role in this scenario.
4. Frequent labour turnover which is of course unavoidable, should be monitored and proper replacement should be available to keep the high standard of production.
5. Each job may requires specific skills and HRP provides manpower with the required knowledge, skills and attitude.
6. Unproductive labour and shortage of labour lead to production losses. Both problems are serious and HRP can overcome these problems.
7. Replacement of personnel – Existing manpower may be affected due to retirement, resignation, retrenchment etc. and HRP is required to assess the shortages and arrange for recruitment.
8. To meet department-wise manpower requirements – The organisation as a whole may have the required number of employees, but there may be surplus/shortage of staff in a particular department. HRP plays a major role in correcting such imbalances.
Human Resource Planning – 5 Main Characteristics of HRP
Certain characteristics of Human Resource Planning which are as follows:
(a) Human resource planning is an important process and its integrated approach helps the management in many ways. Through proper and effective human resource planning, management strives to have right number of and right types of employees at the right place and at the right time for attaining the goals and objectives of the organisation.
(b) Human resource planning helps to identify the human resources needs in the light of organisational goals.
(c) Human resource planning paves the way for an effective motivational process.
(d) Human resource planning takes into account likely possibility of new developments and extends plans to cover the changes during the given long period.
(e) Human resource planning also provides the base for developing skills and talents.
It is found that human resource planning means different things from the view point of different experts in the field of management. However, general agreement exists on its ultimate objectives i.e. the most effective and efficient placement of scarce human resources in the interest of employees as well as of their organisation.
Human Resource Planning – Different Levels of HRP
Human resource planning occurs mainly three levels-strategic level, tactical level, and operational level. All these levels provide HR managers with sophisticated planning tools to craft effective policies. It allows HR managers to make plans quickly and more frequently in order to keep pace with the dynamic operating environment.
Strategic Manpower Planning is needed to counteract pulls and pressure of globalization. It mostly determines personnel policies to develop and retain the right mix of people to achieve organisational goals.
The Tactical Planning System based on career planning and development needs of personnel in the organisation. Tactical model is a career plan that systematically grooms the right number of individuals to hold the various jobs. The career plan will spell out the sequence of jobs to assume and the training to attend so that the individuals going through the pace will gain the necessary exposure and experience to discharge the duties professionally.
The operational planning system assists the HR managers to formulate optimal personnel posting or deployment plan for the employees.
Human Resource Planning may be prepared at different levels which are described below:
1. At the National Level – At the national level, generally Central government plans for human resources. It forecasts the demand for and supply of human resources for the entire nation. National level plan covers population projection, programme of economic development, education and health facilities, occupational distribution, mobility of people etc. To adjust the demand and supply of human resources, Government uses population policy, family planning, education policy etc.
2. At the Sectoral Level – Based on the government policy and operation, both Central and State Government frame human resource plan for a particular sector, like agricultural sector, industrial sector, service sector, etc.
3. At the Industry Level – Here man power requirements of a particular industry are covered such as – engineering industries, textile industries, cement industries, iron and steel etc.
4. At the Unit Level – At the unit level human resource requirement of a particular enterprise are planned. Here human resource plan may be made even at department or job wise also.
HRP makes for different purpose at different levels and for different aims.
Different levels of HRP are:
(a) National – HRP by government includes population projection, economic development programme, occupation distribution and growth, educational facilities, industrial and geographical mobility personnel.
(b) Sector-wise – This covers manpower requirements of the three sectors, viz., agricultural, industrial and service.
(c) Industry-wise – This includes manpower forecast for particular industries, e.g., textiles, engineering, cement, plantation, etc.
(d) Individual Unit-based – This refers to the manpower needs of a particular enterprise.
(e) Departmental Level – This covers manpower needs of a particular department in a company.
(f) Job Level – Manpower needs of a particular job family within department like mechanical engineer forecasted at this level.
Human Resource Planning – Importance of HRP
Human resource planning offers the following importance:
1. Helps to Forecast Man Power Requirement:
Vacancy arising due to death, retirement or transfer of employees and due to expansion programme undertaken by the organization is filled up with suitable persons. For assessing the requirement of suitable person in number and quality, HRP is helpful.
2. Helps in Expansion and Diversification Programme:
Expansion and diversification programme of any organization need extra staff. For forecasting and determining the number and type of persons required, human resource planning is useful. In the absence of human resource planning, required quantum of human resources may not be available to execute expansion and diversification activities of the organization.
3. Helps in Estimating the Cost of Human Resources:
HR plan helps in estimating and controlling the cost which in turn help in avoiding surplus or shortage of manpower.
4. Helps in Planning the Physical Facilities:
HRP helps in planning the physical facilities like staff quarters, canteen, and school for the children of employees, recreation facilities for staff etc., which are essential for the smooth conduct of the work of the organization.
5. Helps to Satisfy Individual Needs of Employees:
Human resource planning helps to satisfy individual needs of the employees like promotion, transfer, enhancement in salary, housing, extra facilities like free housing, free education to the children and free use of vehicle etc.
6. Helps to Meet Technological Change:
Human resource planning helps to meet the challenge of new technology. For this purpose, HRP helps in determining the training needs of the existing employees or employees to be appointed.
7. Helps to Reduce Wastage of Man Power:
It helps in judging the effectiveness of human resource policies and programme of management and facilitates to reduce wastage of man power. HRP creates awareness about the proper use of human resources throughout an organization and thus helps to avoid wastage of man power.
8. Helps to Achieve Objectives:
To achieve the objectives, every organization needs employees with expert knowledge, experience, ability and aptitude. HRP helps in the selection of such persons who can work hard and enables organization to achieve the goals or objectives
Human Resource Planning – Responsibilities of HRM Department in Regard to HR Planning Stated by Geisler
The HRP is the responsibility of the HRM department. The responsibility for manpower aspects of various divisions is on their respective heads. The plans are prepared by HRM department consultation with other corporate heads.
The responsibilities of HRM department in regard to HR planning have been stated by Geisler in the following manner:
(i) To assist and counsel the operating managers to plan and establish objectives.
(ii) To collect and summarise manpower data in total organizational terms and to ensure consistency with long-range objectives and other elements of the total business plan.
(iii) To monitor and measure performance against plan and keep the top management informed about it, and
(iv) To provide proper research base for effective manpower and organizational planning.
The organization must plan their short-term, medium term, and long-term manpower needs. It can increase the prospect of an organization managing its resources better and coping more effectively with dynamic situations. These needs periodical reviews also
Human Resource Planning – Future Requirements of Human Resource: External Factors and Internal Factors
The future requirements of human resource depend upon a number of factors which are as below.
1. External Factors:
a. Government policies with regard to liberalisation, industrial relations, religion/caste based job reservations, age exemptions, sons of the soil, etc., will affect Human Resource Planning. Example – The Government has given licence for commercial banking operations to microfinance institution like ‘Bandhan’, Equitas.
b. Economic factors – If the economic situation is encouraging, it may lead to increase in production and sales and more employment opportunities.
c. External business environment factors will influence product volumes and mix of production and demand for human resources.
d. Information technology initiatives on supply chain management, enterprise resource planning, computer aided design, etc., have influenced the quantity and quality of manpower required in the organisation.
e. Level of technology also affects the type of human resource required in the organisation. Computerisation in railways, postal department, banks, airlines, etc., can reduce the headcount in certain departments and at the same time provide opportunities to qualified people.
f. When the business is highly competitive, companies may go for lean organisation reducing the number of employees. At the same time, these companies may also look for people with critical skills to succeed in a competitive environment.
2. Internal Factors:
a. Company strategies on expansion, diversification, acquisition, etc., will affect the requirement of human resources.
b. HR policies on quality of people, compensation, career prospects, organisation culture will influence human resource plan.
c. Planning period, i.e., short-term/long-term forecast have to be considered while planning for human resources.
d. Job analysis consisting of job description and job specification determines the type of human resource required.
e. Under expansion programme, the company normally needs more number of people in production/sales and marketing etc.
f. Production/Sales estimates are important inputs for determining manpower requirements.
g. Production/Operations policies on in-house production, third party production, changes in process, techniques or installation of new machinery or better raw material, etc., will influence the quality and quantity of manpower required.
h. The terms and conditions of working of employees under Union Agreement will affect human resource planning.
i. Loss of manpower due to leave, sickness, transfers, resignations, absenteeism, etc., are also considered.
j. Under Workload Analysis, the company tries to find out the number and type of people required for various jobs in relation to planned output.
k. Type of organisation.
l. Organisation Cycle.
Human Resource Planning – Basic Activities Involved in HRP
The basic activities involved in human resource planning are as under:
(i) Listing of current manpower or preparation of manpower inventory. The existing workforce must be listed category wise and department wise.
(ii) Assessing the extent to which the current manpower is utilised to the advantage of the organisation. It is necessary to ensure effective utilisation of the surplus manpower through transfers.
(iii) Analysing the requirements of manpower in future in the light of existing vacancies, expansion plans, retirement of personnel, etc. This should lead to making manpower forecasts for the next five years. The number of workers required in different categories must be specified clearly.
(iv) Projecting the supply of different types of employees after one year, two years and so on.
(v) Planning and necessary programmes of recruitment and selection to fulfil the requirements of manpower.
(vi) Designing training programmes for different categories of manpower.
(vii) Evaluation of the effectiveness of the process of manpower planning.
Human Resource Planning – HRP Forecasting Methods: Demand Forecasting Methods and Supply Forecasting Methods
In HRP, the forecasting of demand and supply of human resource can be performed by using two methods that is, qualitative and quantitative. The qualitative methods of HRP involve forecasting the quality of employees required for different jobs. The quality of an employee is determined by skills, knowledge, and technical expertise needed to perform a particular job.
The qualitative methods of HRP forecasting reconcile the interests, capabilities, and aspirations of the existing employees with the present and future employee requirements of the organization. The qualitative methods can be used by both large and small organizations. In qualitative methods, human resource planners can trust executives or experts who provide their assistance in estimating future human resource needs.
In contrast, the quantitative methods of HRP deal with the determination of required number of employees. Furthermore, the quantitative methods involve estimating the number of employees, considering the anticipated demand and supply of employees in future. Quantitative methods are less subjective and more statistical as compared to the qualitative methods.
1. Demand Forecasting Methods:
Demand forecasting involves the estimation of future human resource needs of an organization. The demand of human resource can be of different kinds, based on the requirement of specific skills and expertise for a particular job position in an organization. Moreover, there are separate techniques based on qualitative and quantitative aspects of forecasting.
i. Quantitative Methods for Forecasting Demand:
There are four key quantitative methods to estimate the future demand of human resource in an organization:
a. Managerial Judgment:
Refers to the method where managers sit together, discuss their future work assignments and tasks, and estimate how many people they need. The top management reviews and discusses these estimations with the concerned departmental managers.
This method is widely used by small companies, or by those who do not have access to proper, valid, and accurate database to identify the adequate number of people required to perform a particular work. The demand forecasting of human resource is mainly based on the proposals approved by the top management and then reviewed by a committee comprising functional heads.
b. Statistical Techniques:
Refer to the methods used to analyze large amount of human resource data. The advent of computers and statistical techniques has made it easier for organizations to handle the bulky chunks of data.
Examples of statistical techniques used to perform common analysis during HRP are as follows:
(I) Ratio and Trend Analysis:
Refers to the technique under which ratios are calculated for the past data of production and sales. It is the most commonly used statistical technique. In this method, a provision is made for the future changes expected in the quantity of human resource. The results of these ratios are correct only if the data obtained from the past records is accurate.
(II) Regression Analysis:
Refers to the technique under which a functional relationship can be established between the dependent and independent variables. In this technique, regression equations are formed and solved with the help of different software. It is used to forecast the future workforce demand of an organization based on various factors, such as sales, output, profit, productivity, and number of existing employees.
(III) Bureks-Smith Model:
Refers to a mathematical model for forecasting the future human resource demand based on the selected key variables that influence the overall workforce needs of the organization.
The basic equation of this model is as follows:
En = [(Lagg + G) 1 /X] Y
Where,
En = Estimated human resource demand
n = Planning period
Lagg = Overall turnover or aggregate level of current business activity (in rupees)
G = Total growth in the business activity during period n
X = Average improvement in productivity
Y = Conversion figure that relates the present overall activity to the human resource needed
c. Work-Study Technique:
Determines sales forecasts, work schedules, and human resource required per unit of product, with the help of planning experts. Work-study technique is meant for the cases where it is possible to measure the work to determine the duration of the operations and the number of employees required. This is also known as work-load analysis. It estimates the required number of employees possessing desirable skill sets to accomplish the total production targets.
d. Group Brainstorming:
Involves face-to-face discussion on various issues by experts who make some assumptions about the future course of action for the business. For example, experts first examine the strategic plans of the organization and then try to predict the future demand of employees.
ii. Qualitative Methods for Forecasting Demand:
Qualitative methods are meant to formulate short-term estimations of human resource demand. These methods can enhance the projections formulated by using quantitative methods. The qualitative methods are mainly based on the expert opinions of experienced management professionals.
Three basic qualitative techniques to forecast the future human resource demand of an organization are as follows:
a. Expert Opinion:
Refers to the technique based on the executive or expert decisions provided by the marketing, production, finance, purchasing, administration heads, or other knowledgeable persons. The judgmental views of experts are collected to produce a forecast about the future performance of human resource. This technique is used in combination with other quantitative techniques, and the top management adjusts the resulting estimation of these techniques as per their requirements.
Fundamentally, the focus of this approach is to assess the performance of workforce and their likelihood of getting promotions. The advantage of this approach is that it provides quick estimation without using statistical techniques. Moreover, in the absence of adequate and accurate data, the jury of executive opinions may be the only mode of estimation. In addition, this technique is simple and economical in execution.
However, the technique has a disadvantage of groupthink that arises due to common thinking of the people in a group. The preconditions that primarily led to groupthink are high cohesiveness, commanding leadership, and group insulation. The high cohesiveness in the group leads to increasing group conformation, which arises due to the high tendency of group members to reach at a consensus for a particular issue.
High group conformity suppresses the possible opposition and critical views of the group members. Furthermore, the commanding leadership exerts pressure on the group to produce unanimous opinion. Moreover, if the group is insulated it would be deprived of the opinions of external experts.
b. Delphi Technique:
Refers to the technique in which a series of questions is individually asked to a jury of experts about their perceptions of future events. In this technique, the direct interaction among the members of the group during decision-making is avoided; as it could result in reaching an unfair consensus due to dominant personality factors.
Alternatively, the estimation and associated arguments are summarized by a third party and responses, in conjunction with the added questions, are sent back to the experts. This process is repeated until a consensus is reached and used for long-term forecasting.
The Delphi technique involves the use of questionnaires to prevent the disadvantages of groupthink. In this technique, no committee is formed and experts’ opinions are not prejudiced by the pressure of peers. As a result, the decision is not likely to be reached by an unfair consensus. The main disadvantage of this technique is its low reliability and absence of consensus among the experts.
Moreover, it is a very time consuming and expensive technique. In practice, while forecasting for HRP, usually key line managers produce their individual and anonymous estimations based on asked questions. The human resource department analyzes the responses of line managers, and their analyzed responses along with further questions are returned to the experts. The line managers again rework their original predictions in the light of analyzed responses and this cycle is repeated until a consensus is reached.
c. Nominal Group Technique:
Connotes a group technique in which a problem or issue is presented to the group and each member of the group individually produces as many solutions as possible. After that, all the generated answers are presented to the group and clarification on each solution is made. The group proposes the most feasible and realistic solutions based on the clarifications. Each member ranks the projected solutions and a list of solutions is prepared on their ranking starting from highest to lowest. The highest ranked solution is considered to be the best solution.
2. Supply Forecasting Methods:
Supply forecasting methods measure the quantity of human resource that is likely to be available from within and outside the organization, taking into account the current resources and future availability. There are separate qualitative and quantitative methods for supply forecasting.
i. Quantitative Methods for Forecasting Supply:
There are three basic quantitative methods to forecast the future supply of human resource in an organization, which are as follows:
a. Markov Analysis:
Uses historical flow rates of workforce to predict future rates. The historical data is prepared by gathering and assessing information for a period of time. The flow of workforce over years within the organization is shown by means of probabilities. The probability of how many existing employees would be retained, transferred, promoted, terminated, resigned, and demoted is estimated. Thereafter, future workforce flows are estimated based on the present data. For example, in a hypothetical Retail Company, human resource forecasting is done through Markov analysis.
For the Markov analysis to succeed, it is required that there should be enough employees in each job category and their nature of jobs should not have been changed over time.
b. Turnover Analysis:
Examines the attrition rate and its historical trends in detail. The information for the analysis is gathered from the exit interviews and labor turnover rates are calculated from the past data. The labor turnover rate for each job category, department, and division is also assessed.
c. Goal Programming:
Optimizes the goals of the human resource plans. In goal programming, the desirable employment pattern is estimated considering various potential constraints, such as total salary budget and limit of the new employees that can be recruited.
ii. Qualitative Methods for Forecasting Supply:
Qualitative methods are aimed at formulating the short-term estimations on the future availability of human resource and enhancing the projections as proposed by quantitative methods. These methods are principally based on the experienced opinions of appropriate executives. There are three qualitative methods to forecast the future human resource supply in an organization.
These methods are as follows:
a. Skill Inventory – Refers to the technique in which skills, knowledge, abilities, expertise, and career aspirations of present pool of human resource is assessed.
The existing skills inventory should be updated after every two years to incorporate the changes in the skills, additional qualifications, and job duties of employees. The most important issue that needs to be addressed with high priority is confidentiality of the inventory.
b. Succession Planning – Involves the preparation of an inventory report of executives representing which candidates are prepared to be promoted to the higher managerial level positions in the organization.
c. Replacement Charts – Refers to the short-term replacement schedules that map the possible substitution of the employees within the hierarchy of an organization. They can be used in predicting internal supply, especially for the managerial positions.
Human Resource Planning – Roles of HR Planning Team
It is important to remember that when employees are involved in the HR planning process, they also accept the plan and promote it to other employees. A HR planning team should consist of dedicated and knowledgeable employees from different occupations, locations, and levels within an organization.
The National Academy of Public Administration’s Building Successful Organizations: A Guide to Strategic Workforce Planning provides a specific list of team members.
These include:
1. Top Leaders – Heads of agencies are responsible for recognizing the need for workforce planning, demonstrating commitment, and providing the resources to make it happen.
2. Line Managers – Line managers should serve on workforce planning teams. Managers are also responsible for using workforce planning as a process for aligning people actions, such as recruitment and training, with strategic goals and objectives.
3. HR Professionals – HR professionals should serve on workforce planning teams and provide support and workforce data. They should also work closely with line managers in developing and implementing workforce plans.
4. IT (Information Technology) Professionals – IT professionals should serve on workforce planning teams, especially if the process is being automated.
5. Strategic Planners – Strategic planners should serve on workforce planning teams to ensure linkage between the strategic plan and the workforce plan,
6. Budget Analysts – Budget analysts should serve on workforce planning teams to ensure linkage between the budget and workforce planning.
Human Resource Planning – 5 Important Steps of HRP
Human resource planning consists of the following steps:
Human resource planning is influenced by the company’s business planning. In spite of its unique characteristics and specific applications, it must be linked with the general business plan.
The middle-range operational planning flows from long-range strategic planning of the organisation. The short-range annual budgets mention specifically about timetables, allocation of resources and ways/standards of implementing the other two plans.
At the business plan level, human resource planning looks at the issues relating to future business needs, external factors like social trends and demography, and measuring the internal supply of employees in the long run.
At the operational level, human resource planning is concerned with detailed forecast of employee supply and employee demand. Specific action plans are prepared based on these forecasts. This includes all the functional areas of human resource management.
The objective of human resource planning is to ensure the following:
i. To obtain and retain the human resource of required quality and quantity in the organisation in the right time and at the right place; and
ii. To make optimum utilization of obtained human resource for the purpose of the organisation.
iii. To develop right kind of HR to meet the performance needs, as and when required
The process of human resource planning includes the following steps:
(i) Demand forecasting
(ii) Supply forecasting
(iii) Determining the human resource gap
(iv) Formulating action plans, and
(v) Monitoring and review of plans.
It starts from deciding on the planning horizon, i.e., the period for which the plan will apply. It should be integrated with the corporate plan. Knowing the corporate plans and strategies, the projection for demand and supply of human resource can be prepared, and the difference found between the two estimates is known as human resource gap. The gap may be bridged through a proper recruitment and training plan (if demand exceeds supply) or are redundancy plan (if supply exceeds demand).
The steps in human resource planning process are interrelated and often overlap.
Step # I. Forecasting the Human Resource Demand:
This step refers to the process of estimating the need for human resource in the future within in the context of corporate and functional plans.
The demand for human resource at various levels is primarily due to the following factors:
1. External Challenges:
Due to:
(i) economic development,
(ii) socio-political and
(iii) Technological changes and competition.
(i) Economic Developments refer to the changes due to globalization and liberalization which brought opening up of markets, capital market reforms, on-line trading, etc., along with them. This demanded for establishment and expansion of manufacturing and service industries led to a demand for better qualified, professionally trained workers.
(ii) Socio-political and Technological Changes refer to the changes in social, political and legal environment as well as technological advancement. The legal provisions call for specific recruitment whereas technological advancements need specific skills and so call for less manpower.
(iii) Competition is the result of open market economy which brings benefits to the customers but raises the issue of the survival of the company in the market. Labour cost and skill management become two major issues due to competition.
2. Internal Challenges:
The human resource requirements for a given level of activities/operations vary in the same organisation over a period of time or among organisations depending on the production technologies, processes, market analysis, etc. The plans refer to expected changes in production or manpower levels arising due to changes in methods and technologies. The modernization programme in Rourkela Steel Plant of SAIL influenced the HR level, forced right sizing incorporated in HR Planning.
(i) Organisational Decisions – HR planning takes into account the strategic plans, expansion strategies, sales and production forecasts. NTPC’s takeover of TTPS of Odisha called for workforce restructuring and rightsizing. Ventures into new areas gave rise to a demand for new skills.
(ii) HR Factors – Internal HR factors like separation due to retirement, resignation, termination, prolonged absence, etc., also influenced the demand forecast.
Work study technique is appropriately used for the jobs which can be measured and for which standardized norms can be fixed and number of people required can be quantified.
This technique is more appropriate for people involved in direct production than for any other category of employees and this technique is used in conjunction with other techniques. This is otherwise known as workload analysis.
There are three methods for demand forecasting which are described below:
1. Managerial Judgment – Under this method, senior experienced managers prepare guidelines for departmental managers with approval from top management. These guidelines indicate set targets and desirable changes in flow of work. Taking cue from these, the department managers prepare forecasts with the help from personnel, and/or work study experts. Simultaneously, personnel department prepares another forecast of the company-wide demand. The two sets are compared, reconciled and reviewed by senior managers for the final forecast.
2. Simple Statistical Methods – Most common statistical method is ratio trend analysis. It indicates ratios between number of regular and contractual workers, the number of workers and officers, etc. Future ratios are forecasted on time series exploration. Then, the numbers of employees required for different groups, skill levels, etc., are calculated, based on the analysed trend.
3. Mathematical Models – Based on certain assumptions concerning possible changes in future, models may be developed to show how an organisation looks like in terms of its staffing pattern. The modelling techniques include succession analysis, probabilistic analysis and regression analysis.
In succession analysis, the unit is the data concerning the individual. In probabilistic analysis, the unit is the group of employees, classified according to organisational units, job categories, places, levels/grades, etc. Here, the probability of employees moving from one group to another is considered. A matrix or table of HR flows is determined at specified intervals for future time. HR programmes and past trends provide useful data on promotions, transfers, separations, etc., to form the basis of such analysis.
Regression analysis is used to measure relationships between one or more independent variables to explain a dependent variable. In HRP, regression analysis can be used to correlate personnel requirements with output, revenue, etc. This helps in generating alternative scenarios in respect to personnel needs. But the relationship is not always linear and the purpose of analysis is not to present the management with quantitative forecasts.
Step # II. Supply Forecasting:
Supply forecasting is about the internal and external supply of workforce/labour to the organisation.
Policies relating to each of these HR aspects need to be analyzed regularly to assess their possible effects on HR supplies to the organisation.
Forecasting Internal Workforce Supply:
Internal supply forecasts relate to available workforce in the organisation, such as the age distribution of workers, terminations, retirements and new hires in the job classes. A reasonable starting point for projecting a firm’s future supply of labour is its current supply. For this, preparation of HR inventory with the help of the HR information system is essential. This provides information on the profile of the employees in terms of age, sex, education, experience, job level, performance level, etc.
Manpower need arises out of organisational growth, diversification or due to movement of employees because of promotion, transfer, separation, etc. The job profile of the vacant one can be matched with available workers’ profile and the need can be fulfilled.
The replacement charts or succession plans are the simplest type of internal supply forecast. These may be developed by setting a planning horizon, identifying replacement of candidates for the positions to be vacated due to above reasons, assessing the current performance and readiness for promotion, identifying career development needs, and integrating career plan of individuals with the organisational goals.
The overall objective of this exercise is to ensure availability of competent talent for the future or in time of emergency/immediate needs. Frequent HR inventory may be carried out for knowledge on the available talents in the organisation.
Forecasting External Workforce Supply:
The recruiting and hiring of new employees are necessary along with regular exploration of the labour market. This is particularly done when the organisation does not find the talent internally from among the available manpower.
Organisations in both public and private sectors look at the projections of external labour market to prevent deficit of employees. When the firm becomes successful in anticipating its outside recruitment needs and identifying the possible sources of supply from the labour market, recruiting the right number of people at the right time becomes easier.
Several agencies regularly make projections of external labour market conditions and provide information on supply of labour to be available in general categories. Also, professional agencies have started these for other categories of HR.
Region-specific causes influence the external supply forecasts. Specifically, the migration rate, educational level, technological developments, demand for specific skills, unemployment situation, government policies, industry image, etc., are the factors that influence the supply forecast from external source.
Step # III. Determining the HR Gap:
The existing number of HR and available skill being compared with the required number and skill brings out the information on HR gap in the form of deficits or surpluses for the future. The reconciliation of demand and supply of HR helps us in knowing the number of people that needed to be recruited or made redundant as the case may be. This demand and supply forecast may be made for 3 to 5 years forming the basis for HR planning for the future.
Step # IV. Formulating HR Plans:
Organisations are dynamic and adopt changes whenever necessary. Because of technological, economical and social changes, the plans and programmes change. These influence the HR requirements. Changes in products/production methods, union agreements, competitive actions, and strategies demand for change in HR needs. Once the needs are analyzing and found out, the HR plans relating to recruitment, redeployment, redundancy, selection training, productivity, retention, etc., can be drawn up.
Recruitment plan will indicate the number and type of people required, when they are needed, special plans to recruit right people, how they are to be managed and how the recruitment programme is to be adopted.
Selection plan is followed by the recruitment programme and will help in finding the best out of the available HR.
Redeployment plan will describe the programmes for transfer or retraining of people for new jobs.
Redundancy plan will indicate who is redundant, where and when; this indicates the plans of retraining, if possible; plans for VRS, retrenchment, etc.
Training plans will describe the number and types of training required for new employees, as well as existing employees. It will also describe new courses to be developed, changes in existing courses, etc., for training of employees as per requirement of the organisation.
Productivity plans will describe programmes for improving employee productivity with effective cost management, through work simplification studies, mechanization and automation, productivity bargaining, incentive and profit showing schemes, job redesigning, etc.
Retention plans will indicate reasons for employee turnover and methods for avoiding/reducing the same. Necessary changes are initiated in compensation plans and policies, induction and training, changes in work processes and requirements and improving work conditions.
Step # V. Monitoring and Evaluation of HR Planning:
The purpose of monitoring and evaluation is to guide HR planning activities and making it perfect. For measuring the performances, we need yardsticks. Quantitative and qualitative objectives play important roles in HR planning.
Quantitative objectives make the control and evaluation process more effective, specific and precise. Qualitative process makes the system more subjective and demand forecasts are based more on “hunches” than on factual information.
Therefore, HR planners need to follow:
i. Assessing plans to determine their knowledge of current events (problems and opportunities) and to establish priorities;
ii. Assessing the working relationships between HR specialists and line managers;
iii. Assessing the integration of business plan and HR plans, and recommendation; and
iv. How planners perceive on the importance of HR plan.
Systematic comparison of objectives and action plans with measured performance helps in monitoring and evaluation.
The important factors need to be compared are:
i. Actual staff position against the forecast requirements;
ii. Actual labour productivity against anticipated level;
iii. Actual HR flow rates against planned rates;
iv. Actual implementations against planned programmes;
v. Labour and action programme costs against budgetary provision; and
vi. Ratio of action programme benefits to action program costs.
Human Resource Planning – 2 Main Quantitative Aspects of HRP: Demand Forecasting and Supply Forecasting
Quantitative aspect of human resource planning involves:
1. Demand forecasting, and
2. Supply forecasting.
Aspect # 1. Demand Forecasting:
Demand forecasting is a quantitative aspect of human resource planning. It is the process of estimating the future requirement of human resources of all kinds and types of the organization.
Forecasting of demand for human resources depends on certain factors such as:
i. Employment trend in the organization for at least last five years to be traced to determine the future needs.
ii. Organization has to find out the replacement needs due to retirement, death, resignation, termination etc.
iii. Improvement in productivity is yet another factor. To improve productivity organization needs better employees with skills and potential. Productivity leads to growth but depends on the demands for the product of the enterprise in the market. Higher demand may lead to more employment of skilled personnel.
iv. Expansion of the organization leads to hiring of more skilled persons. The base of human resource forecast is the annual budget. Manufacturing plan depends upon the budget. Expansion in production leads to more hiring of skills and technology.
Methods of Demand Forecasting:
i. Executive Judgment:
Executive or Managerial Judgment method is the most suitable for smaller enterprises because they do not afford to have work study technique. Under this method the executives sit together and determine the future manpower requirements of the enterprise and submit the proposal to the top management for approval. This approach is known as ‘bottom up’ approach.
Sometimes the members of top management sit together and determine the needs on the advice of personnel department. The forecasts so prepared sent for review to the departmental heads and after their consent approved the need. This is known as ‘top down’ approach. The best way is the combination of the two approaches. Executives at both levels equipped with guidelines sit together and determine the human resources need of the organization.
ii. Work Load Forecasting:
It is also known as work load analysis. Under this method the stock of workload and the continuity of operations are determined. Accordingly the labor requirement is determined. The workload becomes the base for workforce analysis for the forthcoming years. Here due consideration is given to absenteeism and labor turnover. This method is also known as work study technique.
Here working capacity of each employee is calculated in terms of man-hours. Man-hours required for each unit is calculated and then number of required employees is calculated.
iii. Statistical Techniques:
Long range demand forecasting for human resources is more responsive to statistical and mathematical techniques. With the help of computers any data is rapidly analyzed.
The following are the methods of forecasting used under this category:
a. Ratio Trends Analysis:
Under this method the ratios are calculated for the past data related to number of employees of each category i.e., production, sales and marketing levels, work load levels. Future production and sales levels, work load, activity levels are estimated with an allowance of changes in organization, methods and jobs. The future ratios are estimated. Then future human resources requirement is calculated on the basis of established ratios. This method is easy to understand. Value depends upon accuracy of data.
b. Econometric Models:
Econometric models are built up on the basis of analysis of past statistical data establishing the relationship between variables in a mathematical formula. The variables are those factors such as production, sales, finance and other activities affecting human resource requirement. Econometric model is used to forecast human resource requirements based on various variables.
c. Bureks Smith Model:
Elmer Bureks and Robert Smith have developed a mathematical model for human resource forecasting based on some key variables that affects overall requirement for human resources of the organization.
d. Regression Analysis:
Regression analysis is used to forecast demand for human resources at some point of time in future by using factors such as sales, production services provided etc. This method is used when independent and dependent variables are functionally related to each other. Nowadays computers are used to solve regression equations for demand forecasting.
Aspect # 2. Supply Forecasting:
Human Resource supply forecasting is the process of estimating availability of human resource followed after demand for testing of human resource. For forecasting supply of human resource we need to consider internal and external supply. Internal supply of human resource available by way of transfers, promotions, retired employees & recall of laid-off employees, etc. Source of external supply of human resource is availability of labor force in the market and new recruitment.
Supply forecasting can also be viewed as an estimation of supply of human resources taking into consideration the analysis of current human resources inventory and future availability.
Factors Affecting External Supply of Human Resource:
External supply of human resource depends on factors mentioned below:
i. Supply and demand of jobs.
ii. Literacy rate of nation.
iii. Rate of population.
iv. Industry and expected growth rate and levels.
v. Technological development.
vi. Compensation system based on education, experience, skill and age.
The most important techniques for forecasting of human resource supply are Succession analysis and Markov analysis.
Steps Involved in Supply Forecasting:
The first step in supply forecasting is to take a stock of existing HR inventory as follows:
i. Head Count – Count of the total number of people available department- wise, sex-wise, designation-wise, skill-wise, payroll-wise etc.
ii. Job Family Inventory – It consists to number and category of employees of each job family such as the jobs related to same category like office staff, sales and marketing staff, production staff, maintenance and industrial engineers, quality control engineers etc.
iii. Age Inventory – It consists of age-wise number and category of employees. This gives us age composition of human resources. Dynamism, creative abilities innovativeness is present in young employees while making of proper judgment and display of maturity is shown by elderly employees.
iv. Inventory of skill, experience, values and capabilities – Organization should take a stock of present inventory of skill, employees with number of years of experiences, values and capabilities.
v. Inventory of Qualifications and Training – This consists of educational qualifications of the employees academic and technical and special qualifications if any and the training received by the employees.
vi. Inventory of Salary grades – This includes pay and allowance-wise and total emoluments-wise stocktaking.
vii. Sex wise Inventory – Inventory of male and female employees of the organization.
viii. Local and Non-Local-wise Inventory – It includes the stock of local employees and the employees belonging to other areas such as different states of India.
ix. Inventory of Past Performance and Future Potentialities – There are several human capacities or potentials required for performing jobs at the workplace.
Regional/Local factors for supply forecasting include the following:
i. Population densities within the reach of enterprise.
ii. Current and future wage and salary structure from other employers.
iii. Local unemployment level.
iv. Availability of employees on part time, temporary and casual basis.
v. The output from local educational institutions and training institutions managed by government and private establishments.
vi. Local transport and communication facilities.
vii. Availability of residential facilities.
viii. Traditional pattern of employment locally and availability of human resources with requisite qualifications and skills.
ix. The pattern of migration and immigration.
x. The attraction of the area as a better place to reside.
xi. The attraction of a company as a better workplace and company as a good paymaster.
xii. The residential facilities, educational health and transport facilities.
xiii. The regulations of local government in respect of reservation of backward and minority communities.
National factors for supply forecasting include the following:
i. Trends in growth of working population of the country.
ii. National demands for certain categories of human resources such as technical and management professionals, computer professionals, medical practitioners, technicians, secretaries, craftsmen, graduates etc.
iii. The output from universities, technical and professional institutions.
iv. Impact of changes in educational patterns.
v. Cultural patterns, social norms and customs.
vi. Impact of government training schemes.
vii. Impact of government policies in respect of employment regulations.
viii. Migration and immigration patterns.
ix. Impact of national educational facilities.
The net human resource requirement depends upon the human resource requirement of the organization for future i.e., demand forecasting and the total supply of human resources available.
Human Resource Planning – Approaches for Human Resource Planning
Human resource planning, theoretically, identifies three options in front of HR manager.
These are:
i. To treat any social programme like education/health as a consumable goods and so demand for such is the public (consumer) demand for more schools/hospitals or other such facilities.
ii. To view such a programme as an investment and evaluate it in terms of return on the investment.
iii. To consider the skilled manpower as basic input for production of goods or providing quality services.
Accordingly, there are three approaches for Human Resource Planning, such as:
1. Social Demand Approach
2. Rate of Return Approach
3. Manpower Requirement Approach.
This approach relies on the assessment of the society’s need for the programme. It is an aggregate of individual’s demand which is not possible to calculate. Therefore, this approach depends on the assessment of trends and projection of social demand for the programme. This approach is applicable to plan for the human resource of the society in general in relation to solve a social problem.
This is a very complex system which depends on many social factors related to the programme. For example – The educational programme although decided on public (consumer) demand is influenced by contingent conditions like direct costs of education, students’ grants, existing admission process and standards, etc. Therefore, this approach suffers from the difficulties associated with any futurological exercises. This approach is more intended to create social capital for meeting future contingencies and development of the society.
Rate of return approach considers the social programme as a contributor to productivity and facilitates investment decisions in it. For example – Investment in education contributes towards expansion of facilities and its return is through direct monetary benefit (like extra lifetime earnings received which can be attributed to the investment).
However, rate of return approach is only indicative of relative priorities. This analysis does not take cognizance of supply and demand of skills in the labour market. Therefore, it is doubtful whether such an approach is effective in making investment decisions. The approach is more a calculative one to look at Return on Investment (RoI).
3. Manpower Requirements Approach:
There is a definite link between growth and manpower requirement and growth.
The basic steps involved in this exercise are:
a. Anticipating the direction and magnitude of the development;
b. Evolving norms for employing manpower;
c. Estimating manpower requirements, etc.
Limitation of these Approaches:
These are based on assumptions of the distant unknown future. Therefore, any error in judgment will seriously affect the balance of human resource resulting in either excess supply or excess demand. Excess of any of these is very difficult to manage.
However, Manpower Requirement approach is more relevant for business organisation.
Human Resource Planning – Models of HRP (With Policies Stated by Large Companies)
Corporate policies, objectives and plans provided the basic document for constructing this model and putting it into use. The policies act as guidelines for making the model functional. Once these things are in place, objectives are set for the model.
The objectives may be to look for more people to fill the current openings or expected openings due to expansion, and increase in production. Forecasting methods and techniques are used to figure out the requirements qualitatively and qualitatively and in the short and long-range.
Traditionally two methods were used to plan and forecast for human resources. They are short-range and long-range planning methods. The short-range emphasizes filling an urgent or immediate need for human resources and it is also known as stop-gap method of planning. The short-run method tries to get the maximum usage from the existing human resources.
The need might have risen as a result of retrenchment or employees might have quit their jobs for some sudden reason. The long-range planning is due to change in shifting population trends, government policies, market projections, organizational expansions, facilities, and so on.
This approach attempts to change the character of the organization in the future. At the corporate level, most of the human resource plans emphasize the static aspects, those of meeting current needs or finding solution to existing problems.
Policies that should be Considered for Human Resource Planning:
In undertaking human resource planning, certain policies, goals, and plans of the corporation must be borne in mind. If human resource planning is not integrated with total corporate plans, then the human resource search and programs risk being potentially harmful to the organization.
Many organizations often face the problem of overstaffing due to a lack of an integrated plan of action. In recent years, computer-based human resource planning models and packages are commercially available. Some companies have even created the position of human resource data administrator or information systems analyst and programmers.
Policies are guidelines for action. They indicate what is permitted and what is not permitted. Promoting people from within can be a human resource policy of a company while another company may have a policy of getting people from outside to fill the job openings.
Some of the policies pertaining to human resource management are provided to the employees during the orientation process and they carry a policy manual with them. Companies make sure that they do not violate the stated policies particularly during hiring and firing exercises.
Policies define an area, let us say, manpower planning within which decision is to be made and ensure that the decision will be consistent with and contribute to an objective. Policies help decide issues before they become problems, make it unnecessary to analyze the same situation every time it comes up, and take consistent actions.
Before one engages in human resource planning, a good question to ask is whether the company and the human resource department have manpower policies once the response is positive, and then the human resource department must get familiarized with such policies before they embark on taking steps to acquire human resources.
The following are some of the policy considerations stated by large companies. You can become familiar with such policies:
i. Should the company hire people only for present vacancies or should it recruit potential talent for the long-run needs?
ii. How strongly should the company weed out poor performers in the company?
iii. Does the company want to hire only the best applicants for each need or can less rigorous needs be set without running undue risk?
iv. What should be the balance between male and female employees?
v. To what extent can the company combat scarcities in the supply of certain types of labor? Can training make up the deficiencies?
vi. Is hiring from within preferable to outside sources?
vii. How can the company make the best use of the abilities available in its present workforce?
viii. “What numbers of the various kinds of employees will be needed in the short-run, and in the long-run?
The above are only a few policy area considerations. These considerations vary from organization to organization and from situation to situation. An effective manpower planning program must be built on certain sound manpower policies.
The following questions have to be raised as a checklist to examine the status of these policies in an organization:
i. Do we have manpower policies?
ii. Are these policies identified and stated formally?
iii. Are these policies followed and implemented in our manpower program?
iv. Do we have top management support for these policies? Is that support stated categorically or explicitly in written form?
v. Is it communicated to those concerned?
vi. Are these policies evaluated frequently as the conditions change?
Start with the identification and statement of manpower and other employment policies. Without such policies manpower program would only be a “fire-fighting” effort just to fill only a few positions. Turnover, poor morale, lack of coordination, poor utilization of skills, and poor quality of work is some of the problems.
Human Resource Planning – 6 Major Barriers of HRP
Some of the barriers to human resource planning are as follows:
1. Traditional management – Traditionally managed companies are not interested in long-term planning of manpower and they recruit people as and when required.
2. Changing Business Environment – Lot of changes are taking place due to political, economic and technological factors and these factors can affect employment situation in the country.
3. Predicting manpower requirements is a tough job as it is influenced by a number of external and internal factors.
4. Time-consuming, labourious and costly process and requires the services of experts.
5. In our country, there is surplus manpower and managers do not give much importance to HRP.
6. Manpower planning is more relevant to industries where there is shortage of skilled manpower.
Human Resource Planning – Some Specific Benefits of HRP
The benefits of human resource planning are as follows:
(i) Shortage or surplus of manpower in various departments will be revealed by manpower planning. Corrective steps can be taken in time.
(ii) Manpower forecasting provides a basis of recruitment, transfer and training of employees.
(iii) It reduces labour costs by avoiding surplus of manpower. Overstaffing can be known quickly and steps taken accordingly.
(iv) It helps in identifying talents available in the organisation. Training for promotion could be given to the talented employees.
(v) It facilitates growth and diversification of business. Suitable employees are made available to handle new jobs. Adequate arrangements can be made to ensure the availability of technical personnel.
(vi) It leads to a greater awareness of the importance of sound manpower management throughout the organisation.
(vii) It serves as a tool to evaluate the effect of alternative manpower actions and policies.
Some specific benefits of human resource planning are:
1. Talent inventory, i.e., to assess the current human resource, its skills, abilities and potentials and to analyse how the human beings are being used;
2. Workforce forecast, i.e., to predict future human resource requirements – the number and type of employees required and to prepare these employees to meet the needs of the organisation and make them more skillful to face the unforeseen challenges;
3. Preparing the action plans for proper recruitment, selection, transfer, promotion, training and development;
4. Creating a pool of qualified applicants and make them interested for the projected vacancies;
5. Acting like a control device by providing feedback on the overall effectiveness of human resource planning by monitoring the degree of attainment of human resource objectives;
6. Ensuring continuous supply of required human resource with requisite skills during restructuring and expansion of the organisation;
7. Cost control by avoiding excess/short supply of manpower.
Human Resource Planning – Few Limitations of HRP
There is no dispute over usefulness of human resource planning, but a few limitations of human resource planning should also be enlisted:
1. Future is uncertain. Changes in technology, social values, political ideologies, economic conditions, etc., cannot be forecast with certainty. We can only say that probability of happening a particular thing is more. Manpower planning based on this uncertain assumptions may prove dangerous at times. However, those who favour of manpower planning argue that it is better to try our best and plan, rather than leaving all our actions to luck.
2. We can forecast how many vacancies would be created at a future time. But we cannot show where particularly the vacancies would arise. So, no certain steps can be taken as far as new recruitments are concerned.
3. Many a time, top management does not extend their cooperation when manpower planning is thought about conservative administrators think that there is no need of manpower planning in India because of high rate of unemployment and abundance of labour in this country. The lack of interest on part of top managers is also a vital limitation to the success of manpower planning.
We see that there are no intrinsic drawbacks of human resource planning. Its limitations arise from uncertainty of predictions, methods used and behaviour of management. As there continues to be more and more research in this field, manpower planning is due to become more accurate.
Human Resource Planning – How to Minimize Problems Related to HRP (With Guidelines)
Various studies have been conducted in Indian organisations which identified the efficient use of HR planning. The effectiveness of HR planning is influenced by poor HRIS and frequent changes in technological, political, social and economic cycles.
These problems can be minimized, if the following guidelines are followed:
(i) Integrated Objectives – There must be an integration of HR plan with organisational objectives. The organisational culture, climate, work conditions, employee relationships, etc., must be kept in mind during HR planning.
(ii) Top Management Support – For the introduction of anything new or, for the continuity of a programme, top management’s support is always required. This is also true in the case of HR planning.
(iii) Employee Skills Inventory – This should be done objectively and accurately to provide proper feedback on the plan.
(iv) Human Resource Information System (HRIS) – All relevant data must be there in HRIS to support the system with facts and figures.
(v) Coordination – HR planning may be done by a separate wing in the organisation which coordinates among various functional units for getting right information from these units.
When the changes are obvious for the organisation, the nature of work changes, results in a demand for changes in the number and types of jobs. Therefore, to reduce uncertainty and increase efficiency, attention must be given on careful analysis of jobs and proper HR planning.