Human Resource Planning

Human Resource is the most vital factor for the survival and prosperity of the organization. The human resource asset in a firm has the potential to appreciate the value of the firm. Though all the firms buy the same material and machines, the people in a firm make the difference in the final product. So the success of any organization mainly depends upon the quality of its human resource and their performance. Any forward looking management will be concerned with the problem of procuring or developing adequate talent for manning various positions in the organization. The success of a human resource planning process not only helps the organization itself, but also helps the society’s prosperity. The losses a firm suffers from inadequate human resource planning and utilization, is a loss to the nation. When these individual losses are added up the total losses may be very significant to the economy of a nation.

Human resource may be regarded as the quantitative and qualitative measurement of labor force required in an organization and planning in relation to manpower may be regarded as establishing objectives to develop human resources in line with broad objectives of the organization. Thus, human resource planning may be expressed as a process by which the management ensures the right number of people and right kind of people, at the right place, at the right time doing the right things. It is a two-phased process by which management can project the future manpower requirements and develop manpower action plans to accommodate the implications of projections. Thus, we can say that human resource planning is the process of developing and determining objectives, policies and programmes that will develop, utilize and distribute manpower so as to achieve the goals of the organization.

Read More: Human Resource Planning Process

Definition of Human Resource Planning

Human Resource Planning is the planning of Human Resources. It is also called manpower planning/ personnel planning/ employment planning. It is only after Human Resource Planning that the Human Resource department can initiate the recruitment and selection process. Therefore Human Resource Planning is a sub-system of organisational planning.

Definition

  • “Human Resource Planning is a strategy for the acquisition, utilisation, improvement and preservation of an organisation’s human resource” – Y.C. Moushell
  • “Human Resource Planning is a process of forecasting an organisation’s future demand for human resource and supply of right type of people in right numbers” – J.Chennly.K

Features of Human Resource Planning

  1. It is future oriented: Human Resource Planning is forward-looking. It involves forecasting the manpower needs for a future period so that adequate and timely provisions may be made to meet the needs.
  2. It is a continuous process: Human Resource Planning is a continuous process because the demand and supply of Human Resource keeps fluctuating throughout the year. Human Resource Planning has to be reviewed according to the needs of the organisation and changing environment.
  3. Integral part of Corporate Planning: Manpower planning is an integral part of corporate planning because without a corporate plan there can be no manpower planning.
  4. Optimum utilization of resources: The basic purpose of Human Resource Planning is to make optimum utilisation of organisation’s current and future human resources.
  5. Both Qualitative and Quantitative aspect: Human Resource Planning considers both the qualitative and quantitative aspects of Human Resource Management, ‘Quantitative’ meaning the right number of people and ‘Qualitative’ implying the right quality of manpower required in the organisation.
  6. Long term and Short term: Human Resource Planning is both Long-term and short-term in nature. Just like planning which is long-term and short-term depending on the need of the hour, Human Resource Planning keeps long-term goals and short-term goals in view while predicting and forecasting the demand and supply of Human Resource.
  7. Involves study of manpower requirement: Human Resource Planning involves the study of manpower availability and the manpower requirement in the organisation.

Significance of Human Resource Planning

The failure in planning and in developing personnel will prove to be a limiting factor in attributing to the organizational objectives. If the number of persons in an organization is less than the number of persons required to carry out the organizational plans, there will be disruptions in the flow of work and the production will also be lowered. But if, on the other hand, some persons are surplus in an organization, they will have to be paid remuneration. The sound personnel policy requires that there should be adequate number of persons of the right type to attain its objectifies. For this the manpower planner should be concerned with the training and the scheduling of the planning of personnel and persuading the management to use the results of manpower planning studies in the conduct of the business. Every industrial or commercial organization has the need of proper system of manpower planning so as to bring efficiency and economy in the organization. Smaller concerns and those with simpler organizations also require human resource planning though at a small scale. Human resource planning can prove to be an important aid to frame the training and development programmes for the personnel because it takes into account the effects of anticipated changes in technology, markets and products on manpower requirements and educational and training programme requirements.

Human resource planning is relatively a difficult task for the personnel management. It is particularly so in business enterprises which are often subject to forces outside their control such as social, political and economical changes. Manpower is a key resource required for the achievement of business objectives. Materials, equipments, power and other resources can be effectively and efficiently used, only if there is manpower capable of processing them into required goods and services. It takes a long time to develop the manpower of right type to use these resources. Therefore, decisions concerning manpower development must be taken many years in advance. However, management may stick to short periods for rank and file employees, but it will have to concentrate upon the problems of replacing key professional and managerial personnel on a long term basis. In as-much-as many big organizations do prepare long-range forecasts in production, marketing and capital investment, it should not be surprising if it makes long term projections in regard to its personnel. However, human resource plans cannot be rigid or static, they can be modified or adjusted according to the change in the circumstances.

Need for Human Resource Planning

An organisation must plan out its human resource requirements well in advance so that it could complete effectively with its competitors in the market. A well thought-out-human resource plan provides adequate lead time for recruitment, selection and training of personnel. It becomes all the more crucial because the lead time for procuring personnel is a time consuming process and in certain cases one may not always get the requisite type of personnel needed for the jobs. Non-availability of suitable manpower may result in postponement or delays in executing new projects and expansion programmes which ultimately lead to lower efficiency and productivity further. To be specific, the following are the needs for human resource planning:

  1. Shortage of Skills: These days we find shortage of skills in people. So it is necessary to plan for such skilled people much in advance than when we actually need them. Non-availability of skilled people when and where they are needed is an important factor which prompts sound Human Resource Planning.
  2. Frequent Labor Turnover: Human Resource Planning is essential because of frequent labor turnover which is unavoidable by all means. Labor turnover arises because of discharges, marriages, promotion, transfer etc which causes a constant ebb and flow in the workforce in the organisation.
  3. Changing needs of technology: Due to changes in technology and new techniques of production, existing employees need to be trained or new blood injected into an organisation.
  4. Identify areas of surplus or shortage of personnel: Manpower planning is needed in order to identify areas with a surplus of personnel or areas in which there is a shortage of personnel. If there is a surplus, it can be re-deployed, or if there is a shortage new employees can be procured.
  5. Changes in organisation design and structure: Due to changes in organisation structure and design we need to plan the required human resources right from the beginning.

Problems with Human Resource Planning

  1. Resistance by Employers: – Many employers resist Human Resource Planning as they think that it increases the cost of manpower for the management. Further, employers feel that Human Resource Planning is not necessary as candidates will be available as and when required in the country due to the growing unemployment situation.
  2. Resistance by Employees: – Employees resist Human Resource Planning as it increases the workload on the employees and prepares programmes for securing human resources mostly from outside.
  3. Inadequacies in quality of information: – Reliable information about the economy, other industries, labour markets, trends in human resources etc are not easily available. This leads to problems while planning for human resources in the organisation.
  4. Uncertainties: – Uncertainties are quite common in human resource practices in India due to absenteeism, seasonal unemployment, labour turnover etc. Further, the uncertainties in the industrial scenario like technological changes and marketing conditions also cause imperfection in Human Resource Planning. It is the uncertainties that make Human Resource Planning less reliable.
  5. Time and expense: – Human Resource Planning is a time-consuming and expensive exercise. A good deal of time and cost are involved in data collection and forecasting.

Guidelines for making Human Resource Planning effective

  1. Adequate information system: – The main problem faced in Human Resource Planning is the lack of information. So an adequate Human resource database should be maintained/developed for better coordinated and more accurate Human Resource Planning.
  2. Participation: – To be successful, Human Resource Planning requires active participation and coordinated efforts on the part of operating executives. Such participation will help to improve understanding of the process and thereby, reduce resistance from the top management.
  3. Adequate organisation: – Human Resource Planning should be properly organised; a separate section or committee may be constituted within the human resource department to provide adequate focus and to coordinate the planning efforts at various levels.
  4. Human Resource Planning should be balanced with corporate planning: – Human resource plans should be balanced with the corporate plans of the enterprise. The methods and techniques used should fit the objectives, strategies and environment of the particular organisation.
  5. Appropriate time horizon: – The period of manpower plans should be appropriate according to the needs and circumstances of the specific enterprise. The size and structure of the enterprise as well as the changing aspirations of the people should be taken into consideration.

Factors affecting Human Resource Plans

External factor:

They are the factors which affect the Human Resource Planning externally. They include:-

  1. Government policies: – Policies of the government like labour policy, industrial policy, policy towards reserving certain jobs for different communities and sons-of-the-soil etc affect Human Resource Planning.
  2. Level of economic development: – Level of economic development determines the level of human resource development in the country and thereby the supply of human resources in the future in the country.
  3. Information Technology: – Information technology brought amazing shifts in the way business operates. These shifts include Business Process Reengineering (BPR), Enterprise Resource Planning (ERP) and Supply Chain Management (SCM). These changes brought unprecedented reduction in human resource and increase in software specialists. Example:  Computer-aided design (CAD) and computer-aided technology (CAT) also reduced the existing requirement of human resource.
  4. Level of Technology: – Technology is the application of knowledge to practical tasks which lead to new inventions and discoveries. The invention of the latest technology determines the kind of human resources required.
  5. Business Environment: – Business environment means the internal and external factors influencing the business. Business environmental factors influences the volume of mix of production and thereby the supply of human resources in the future in the country.
  6. International factors: – International factors like the demand and supply of Human resources in various countries also affects Human Resource Planning   .

Internal factors:

  1. Company Strategies: – The organisation’s policies and strategies relating to expansion, diversification etc. determines the human resource demand in terms of Quantity and Quality
  2. Human Resource policies: – Human Resource policies of the company regarding quality of human resources, compensation level, quality of working conditions etc. influence Human Resource Planning.
  3. Job analysis: – Job analysis means detailed study of the job including the skills needed for a particular job. Human Resource Planning is based on job analysis which determines the kind of employees to be procured.
  4. Time Horizon: – Company’s planning differs according to the competitive environment i.e. companies with stable competitive environment can plan for the long run whereas firms without a stable environment can only plan for short term. Therefore, when there are many competitors entering business/ when there is rapid change in social and economic conditions of business/ if there is constant change in demand patterns/ when there exists poor management practice, then short term planning is adopted or vice-versa for long-term planning.
  5. Type and Quality of Information: – Any planning process needs qualitative and accurate information about the organisational structure, capital budget, functional area objectives, level of technology being used, job analysis, recruitment sources, retirement plans, compensation levels of employees etc. Therefore Human Resource Planning is determined on the basis of the type and quality of information.
  6. Company’s production and operational policy: – Company’s policies regarding how much to produce and how much to purchase from outside in order to manufacture the final product influences the number and kind of people required.
  7. Trade Unions: – If the unions declare that they will not work for more than 8 hours a day, it affects the Human Resource Planning. Therefore influence of trade unions regarding the number of working hours per week, recruitment sources etc. affect Human Resource Planning.
  8. Organisational Growth Cycles: – At starting stage the organisation is small and the need of employees is usually smaller, but when the organisation enters the growth phase more young people need to be hired. Similarly, in the declining/recession/downturn phase Human Resource Planning is done to re-trench the employees.

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]
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