Human Resource Planning

Human Resource Management is very important for the survival and prosperity of an organisation. Procurement of right kind and right number of employees is the first operative function of Human Resource Management. Before selecting the right man for the right job, it becomes necessary to determine the quality and quantity of people required in the organisation. This is the primary function of Human Resource Planning.

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.

Objectives of Human Resource Planning

  1. Optimum utilization of human resources currently employed in the organisation.
  2. To reduce imbalance in distribution and allocation of manpower in organisation for various activities.
  3. To ensure that the organisation is well-equipped with the required Quantity and Quality of manpower on a sustained basis.
  4. To anticipate the impact of technology on jobs and resources.
  5. To control cost of Human Resources employed, used and maintained in the organisation.
  6. To provide a basis for management development programmes.
  7. To ensure optimum contribution and satisfaction of the personnel with reasonable expenditure.
  8. To recruit and retain human resource of required Quantity and Quality.

Need 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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