Human Resource Planning (HRP)
- Meaning of Human Resource Planning
- Importance of Human resource Planning
- Human Resource Planning process
- Techniques of forecasting Human Resource needs
- Challenges in human resource planning
- Emerging issues and trends in Human Resource planning
HUMAN RESOURCES PLANNING
(MANPOWER PLANNING)
Definition: It is the process which management determines how an organization should move from its current manpower position to its desired manpower position.
This is by having the right number and the right kind of people at the right places, at the right time to do the things which results in both the organization and individual receiving maximum long term benefits.
Human resource planning consists of the following activities.
1. Forecasting: Future manpower recruitment are forecasted through use of mathematical projections of trends in the economic environment and development in industry or through judgmental estimates based upon specific future plans of a company.
2. Making an inventory of present manpower resource and assessing the extent to which those resources are employed maximally.
3. Anticipating manpower problem problems by projecting present resources into the future and comparing them with the focused of the requirements to determine their both quantitatively and qualitatively.
4. Planning: – This necessary programmes of requirements, selection, training, development, utilization, transfer, promotion, motivation and compensation to ensure that future manpower requirements are properly met.
IMPORTANCE OF HUMAN RESOURCE PLANNING
1. To meet the manpower needs of the business.
Every organization needs adequate and properly qualified staff to conduct business activities. Manpower planning provides manpower as per the need, skills, qualifications and work experience.
2. To arrange for the replacement of existing manpower
This could be due retirement, turnover etc. Human Resource Planning is needed to estimate the shortfall in manpower recruitment and also make suitable arrangements through recruitment and selection.
3. To meet growing manpower due to expansion
Additional human resource will be required if a business decide to expand manpower, planning is needed to forecast and meet additional manpower requirements through recruitment and sustainable training programmes.
4. To meet the challenges of the changing technological environment.
It may be necessary to appoint additional staff or have additional training due to changing technology (new methods) manpower planning is needed to meet such situations.
5. To adjust staff requirements of depts.
A situation may develop where there will be surplus (add) staff in one department and a shortage of staff in another department. Human resource planning is needed in order to rectify the situation. Transfers and promotions may be made.
Other benefits of manpower planning include;
• To facilitate internal succession of managerial person so that replacements can be made.
• It creates greater awareness of the importance of sound manpower management throughout the organization.
• It helps in the growth of business by avoiding disruption of activities.
• At the National level human resource management planning helps in economic development. This is through generation of employment.
HUMAN RESOURCE PLANNING PROCESS
1. ORGANIZATIONAL OBJECTIVES AND POLICIES
The objectives of HR plan must be derived from organizational objectives like specific requirements of numbers and characteristics of employees. HRP needs to further the overall objectives by ensuring availability and utilization of human resources. Specific policies need to be formulated to address the following decisions:
• -Internal Hiring or External Hiring
• -Training & Development plans
• -Union Constraints
• -Job enrichment issues
• -Rightsizing organization
• -Automation needs
• -Continuous availability of adaptive and flexible workforce
2. MANPOWER DEMAND FORECASTING
It is the process of estimating the future quantity and quality of people required. The basis should be the annual budget and long term corporate plans. Demand forecasting should be based on following factors.
Internal Factors
• Budget constraints
• Production levels
• New products and services
• Organizational structure
• Employee separation
External Factors
• Competition
• environment Economic climate
• Laws and regulatory bodies
• Technology changes
• Social Factors
Reasons for Human Resource Demand Forecasting
• To quantify jobs
• To determine the Staff-mix
• To assess staffing levels and avoid unnecessary costs Prevent shortages of people
• Monitor compliances of legal requirements with regards to reservations
3. MANPOWER SUPPLY FORECASTING
This process measures the number of people likely to be available from within and outside the organization after making allowance for absenteeism, internal movements and promotions, wastages, changes in hours and other conditions of work.
Reasons for Manpower Supply Forecasting
• Assess existing staff levels
• Prevent shortages
• Monitor expected future compliance of legal requirements of job reservations
Supply Analysis covers:
a. Existing Human Resources:
HR Audits facilitate analysis of existing employees with skills and abilities. The existing employees can be categorized as skills inventories (non-managers) and managerial inventories (managers).
Skill inventory would include the following: Personal data, Skills, Special Qualifications
Salary, Job History, Company data, Capabilities, Special preferences,
Management inventories would include the following: Work History, Strengths, Weaknesses, Promotion Potential, Career Goals, Personal Data, Number and Types of Subordinates, Total Budget Managed, Previous Management Duties
b. Internal Supply
Internal supply techniques help to assess the following:
• Inflows and outflows (transfers, promotions, separations, resignations, retirements.)
• Turnover rate (No. Of separations p.a. / Average employees p.a. X 100)
• Conditions of work (working hours, overtime, etc.)
• Absenteeism (leaves, absences)
• Productivity level
• Job movements (Job rotations or cross functional utilizations)
c. External Supply: – can be colleges and universities, consultants, competitors and unsolicited applications.
4. ESTIMATING MANPOWER GAPS
By comparing demand forecasts and supply forecasts which will reveal a surplus or deficit of human resources.
5. HUMAN RESOURCE PLAN IMPLEMENTATION
Once manpower gaps are identified, plans are prepared to bridge those gaps.
A series of action programs are initiated as a part of HR plan implementation as under.
Recruitment & Selection: Employees are hired against the job vacancies. Based on the manpower demand and supply forecasts made, hiring of employees is initiated based on supply forecasts. For this internal and external sources of manpower are utilized. Formal selection board is established to interview and select the best of the candidates for the required vacancies. Finally the selected employees also need to be placed on proper jobs. Here, some companies recruit employees for specific jobs while others recruit fresh trainees in large number and train them for future manpower needs.
Training and Development: The training and development program is charted out to cover the number of trainees, existing staff etc. The programs also cover the identification of human resource for conducting development programs, frequency of training and development programs and budget allocation.
Retraining and Redeployment-New skills are to be imparted to existing staff when technology changes or product line discontinued. Employees need to be redeployed to other departments where they could be gainfully employed.
Retention Plans: Retention plans cover actions which would reduce avoidable separations of employees. Using compensation plans, performance appraisals, avoiding conflicts, providing green pastures etc, can do this.
Downsizing plans: Where there is surplus workforce, trimming of labor force will be necessary. For these, identifying and managing redundancies is very essential.
Managerial Succession Planning- Methods of managerial succession plans may vary. Most successful programs seem to include top managements involvement and commitment, high-level review of succession plans, formal performance assessment and potential assessment and written development plans for individuals. A typical succession planning involves the following activities:
• Analysis of demand for managers and professionals
• Audit of existing executives
• Projection of future likely supply from internal and external sources
• Individual career path planning
• Career counseling
• Accelerated promotions
• Performance related training and development
• Strategic recruitment
If management estimates any shortage of employees in future, then it will have to highlight the major areas where the departments are overstaffed so that they can be transferred to understaffed departments. Shortage of employees can be addressed through measures like overtime, part-time, hiring temporary employees, contracts, promotions, full-time employees. If the management estimates a surplus in almost all the departments, its solution might include early retirement, demotions, layoffs, termination of some employees, leave without pay, opening up new branches or diversification of production etc. Surplus employee decisions are perhaps the most difficult ones managers must take. When future demand for employees is exactly equal to the supply of employees, HRP is said to be excellent .
6. CONTROL AND EVALUATION OF HUMAN RESOURCE PLANS
HR Plans must also clarify responsibilities for control and establish reporting procedures which will enable achievements to be monitored against the plan. The HR Plans should include budgets, targets and standards. These plans may simply be reports on the numbers employed against targets.
Manpower Forecasting Techniques:
1. Management Judgment
In this technique, managers across all the levels decide the forecast on their own judgment. This can be bottom-up or top-down approach and judgments can be reviewed across departments, divisions and top management can conclude on final numbers of manpower required.
2. Ratio-Trend Analysis
This technique involves studying past ratios and forecasting future ratios making some allowance for changes in the organization or its methods eg volume of sales and number of employees
3. Work Study Techniques
This technique is also known as work-load analysis. This technique is suitable where the estimated work-load is easily measurable. Under this method, estimated total production and activities for a specific future period are predicted. This information is translated into number of man-hours required to produce per unit taking into consideration the capability of the workforce. Past-experience of management can help in translating the work-loads into number of man-hours required. Thus, demand of human resources is forecasted on the basis of estimated total production and contribution of each employee in producing each unit item.
4. Delphi Techniques
Delphi technique is also a very important technique used for estimating demand of human resources. This technique takes into consideration human resource requirements given by a group of experts i.e. mangers. The human resource experts collect the manpower needs, summarizes the various responses and prepare a report. This process is continued until all experts agree on estimated human resources requirement.
5. Flow Models
This technique involves the flow of following components: Determine the time required, Establish categories, Count annual movements, Estimate probable transitions. Here demand is a function of replacing those who make a transition.
6. Econometrics Models
These models are based on mathematical and statistical techniques for estimating future demand. Under these models relationship is established between the dependent variable to be predicted (e.g. manpower/human resources) and the independent variables (e.g., sales, total production, work-load, etc.). Using these models, estimated demand of human resources can be predicted.
7. Estimates based on historical records
8. Job analysis
Job analysis helps in finding out the abilities or skills required to do the jobs efficiently. A detailed study of jobs is usually made to identify the qualifications and experience required for them. Job analysis includes two things: job description and job specification. Job description is a factual statement of the duties and responsibilities of a specific job. It gives an indication of what is to be done, how it is to be done and why it is to be done. Job specification provides information on the human attributes in terms of education, skills, aptitudes and experience necessary to perform a job effectively.
CHALLENGES IN THE HUMAN RESOURCE PLANNING PROCESS
HRP involves predicting and preparing for the future needs of the workforce, but several factors can complicate this process. Here are some common challenges organizations face:
1. Uncertain Future Conditions
Predicting the future accurately is challenging due to the unpredictable nature of business environments. Economic changes, technological advancements, and shifts in market demand can significantly impact workforce needs.
2. Changing Business Strategies
Frequent changes in business strategies can disrupt the alignment between HRP and organizational objectives. Shifts in focus or direction may require sudden adjustments in workforce planning.
3. Lack of Accurate Data
Inaccurate or insufficient data can lead to flawed predictions. Without reliable historical and current data, organizations may struggle to anticipate future workforce needs accurately.
4. Rapid Technological Advances
Technological advancements can alter skill requirements rapidly. Organizations may find it challenging to forecast the skills that will be in demand and identify gaps in their workforce.
5. Globalization and Diversity
Globalization has expanded business operations across borders, resulting in diverse workforces with varying skill sets and cultural backgrounds. Managing such diversity presents unique challenges.
6. Resistance to Change
Employees may resist changes that affect their roles, causing difficulties in implementing new workforce strategies. Resistance can impact the successful execution of HRP initiatives.
OVERCOMING CHALLENGES
Addressing these challenges requires a proactive and strategic approach:
1. Continuous Monitoring and Adjustments: Regularly monitor changing conditions and update HRP strategies accordingly to ensure alignment with business dynamics.
2. Data Quality Improvement: Invest in robust data collection and analysis processes to ensure accurate and up-to-date information for forecasting.
3. Flexibility in Planning: Design flexible HRP strategies that can adapt to changing business strategies and market conditions.
4. Collaborative Decision-Making: Involve various stakeholders, including top management, department heads, and employees, in the HRP process to gather diverse insights.
5. Skill Development Initiatives: Implement training and development programs to equip employees with the skills needed to adapt to technological changes.
6. Change Management Strategies: When introducing new HRP initiatives, communicate the benefits clearly to mitigate employee resistance and ensure successful implementation.
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