Introduction 

The process of HRP is entirely based on the corporate plans and objectives. HRP is a continuous process of review, control and assessment.

Human resource planning refers to the process by which organizations determine their current and future requirements of human resources in terms of number of people as well as the kind of people needed, and determine the ways and means of meeting these requirements. It is a process which enables the organization to have the right people at right time and right place. It involves determining the manpower requirements of the organization in light of its operations, plans and strategies and organization structure.

Human resources planning is the process by which management ensures that it has the right personnel, who are capable of completing those tasks that help the organization reach its objectives. It involves the forecasting of human resources needs and the projected matching of individuals with expected vacancies.

What is Human Resource Planning?

E.W. Vetter viewed human resource planning as "a process by which an organization 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 organization and the individual receiving maximum long-run benefit.”

According to Leon C. Megginson 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 organizational objectives and satisfy the individual needs and goals of organizational members."

Human resource planning may be viewed as foreseeing the human resource requirements of an organization and the future supply of human resources and (i) making necessary adjustments between these two and organizational plans; and (ii) foreseeing the possibility 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.

Need of Human Resource Planning

1. Employment-­Unemployment Situation 

Although the number of educated unemployed is on the rise, there is an acute shortage for a variety of skills. Therefore, recruitment and retention efforts must become more effective. 

2. Technological Change 

There has been an extensive and rapid change in manufacturing technologies, marketing methods, and management methods. These changes have profoundly affected job content and context. There have been problems with redundancy, retention, and redeployment as a result of these changes. These factors suggest that manpower needs should be planned intensively and systematically. 

3. Demographic Change 

HRP is affected by the changing profile of the work force in terms of age, gender, literacy, technical inputs, and social background. 

4. Skill Shortage 

In the absence of unemployment, the labour market does not become a buyer’s market. The complexity and scarcity of specialist skills in organizations tend to increase as organizations become more complex. Leaving employees with such specialized skills creates a problem for an organization. 

5. Governmental Influences 

Organizations have become involved in systematic HRP as the result of government control and regulatory changes addressing affirmative action for disadvantageous groups, working conditions and hours, child labor restrictions, causal employment, etc. 

6. Legislative Control 

“Hire and fire” policies have been abolished. In the present day, legislation makes it difficult for an organization to reduce its size quickly and cheaply. As a result of recent changes in labour law relating to layoffs and closures, it is easy to increase but difficult to decrease the number of employees. The person responsible for managing manpower must look ahead and try to anticipate manpower problems. 

7. Impact of the Pressure Group 

In recent years, pressure groups such as unions, politicians, and displaced persons have raised opposing demands on enterprise management, such as internal recruitment and promotion, preference to personnel’s children, displaced persons, and sons of soil. 

8. Systems Approach 

It has been noted that the dissemination of system thinking and the advent of the macro computer are part of the ongoing revolution in information technology that emphasizes planning and newer ways of handling voluminous personnel records. 

9. Lead Time 

In order for the employee to successfully handle new knowledge and skills, the log lead time is needed in the selection process, training, and deployment. 

Importance of Human Resource Planning 

Human resource planning is a subsystem of organizational planning. The purpose of organizational planning is to establish the company’s goals for the future and determine the appropriate means by which to reach those goals. On the basis of the key roles HRP plays in the organization, we examine the importance of HRP within the organization. 

1. Future Personnel Needs 

An organization’s future personnel needs can be determined through human resource planning. Whenever an organization is experiencing either a surplus or deficit of staff strength, it is the result of an ineffective human resource plan. Due to the fact that the public sector enterprises never planned their staffing requirement and went on a hiring spree until the late 1980’s, all public sector enterprises are now overstaffed. Many companies in the private sector are resorting to VRS ‘voluntary retirement scheme’ because of excess staff. There would have been an excess of labor problem if the organization had a good HRP system. A good HRP system will also enable the organization to plan its succession. 

2. Part of Strategic Planning 

The Human Resource Planning process has become a key component of the strategic planning process. When formulating a strategic plan, HRP gives input into whether the organization has the appropriate human resources to execute the strategy. Human resources are also necessary during the implementation stage in order to determine how to allocate resources based on organizational structure, process, and human resources. A substantial role is played by HRP in some organizations, and HR issues are seen as an inherent part of business management. 

3. Creating Highly Talented Personnel 

Although India has a significant number of educated unemployed, it is the HR manager’s discretion that will allow the organization to hire the right person with the right skills. Even existing employees hope for the job so frequently that the organization frequently faces manpower shortages. In order to cope with this shortage of skilled manpower, skilled manpower planning in the form of skill development is required. 

4. International Strategies 

Human resources planning plays a key role in facilitating an organization’s international expansion strategy. Recruiting foreign nationals to fill key positions and reassigning employees within or across borders is a major challenge that international business faces. Due to the trend towards globalization, the need for HRP will increase as well as the need to better integrate HRP with a company’s strategic plans. With the growing competition for foreign executives, there may be costly and strategic turnover among key decision makers without an effective HRP and subsequent attention to recruitment, selection, placement, training, and career planning. 

5. Foundation for Personnel Functions 

HRPs provide valuable information about designing, selecting, training and developing personnel, transferring, promoting, and laying off employees. 

6. Increasing Investments in Human Resources 

HRP is becoming increasingly important as organizations invest more in human resources development. The value of human assets can increase more than that of physical assets, organizations are realizing. Employees who develop their skills and abilities gradually become valuable assets to the organization. A trained, flexible, motivated, and productive workforce is difficult to value in terms of rupees due to the fact that it can be acquired either directly or through job assignments. There has been a growing recognition that the quality of the workforce is responsible for both short­ and long­term organizational performance. 

7. Resistance to Change 

When employees hear about change or even job rotation, they are always reluctant to accept it. It is impossible for organizations to transfer employees from one department to another without prior planning. The planning of job rotation (moving an employee from one department to another) involves matching the skills required and the existing skills of the employees. 

8. Uniting the Viewpoint of Line and Staff Managers 

Line and staff managers can work together through HRP. The HRP is initiated and executed by the organization’s staff, but everyone within an organization is expected to participate and cooperate. Managers are the most knowledgeable about the challenges their departments face. The success of HR Planning and Development depends on effective communication between HR staff and line managers. 

9. Succession Planning 

People are prepared for future challenges through Human Resource Planning. Employees are identified, trained, assessed, and assisted continuously so they can quickly assume the responsibilities and positions of their boss or seniors as and when the need arises. 

10. Other Benefits

HRP contributes to the evaluation of manpower policies and management programs. It develops awareness of the importance of using human resources effectively for the organization’s growth. It facilitates the selection and training of employees with the necessary knowledge, experience, and skills to meet the organization’s objectives. HRP suggests that the company review and modify its human resource policies and practices, as well as examining the way in which human resources are utilized. 

Objectives of Human Resource Planning

The important objectives of manpower planning in an organization are:

• To recruit and retain the human resource of required quantity and quality;

• To foresee the employee turnover and make the arrangements for minimizing turnover and filling up of consequent vacancies;

• To meet the needs of the programmes of expansion, diversification, etc.;

• To foresee the impact of technology on work, existing employees and future human resource requirements;

• To improve the standards, skill, knowledge, ability, discipline, etc.;

• To assess the surplus or shortage of human resources and take measures accordingly;

• To maintain congenial industrial relations by maintaining optimum level and structure of human resources;

• To minimize imbalances caused due to non-availability of human resources of right kind, right number in right time and right place;

• To make the best use of its human resources; and

• To estimate the cost of human resources

HRP Process

Human Resource Planning begins with answering several questions:

• What new technologies are operating and how will these affect the work system?

• What is the volume of the business likely to be in the next five to 10 years

• What is the employee turnover rate, and how much, if any is avoidable?

Once these questions are answered, then you have to ask further questions that can lead to specific human resources activities such as training or hiring:

• How many senior managers will we need during this time period?

• What types of workers will we need, and how many?

• Are there people with adequate computer skills available for meeting our projected needs?

• What administrative personnel, technicians and secretaries will we need to support the additional managers and workers?

Answering these questions will also help to define the direction for the organization's human resources strategy. For example, if forecasting suggests that there will be a strong need for more technically trained individuals, the organization can:

• Define the jobs and skills needed in some detail.

• Hire and train recruiters to look for the specified skills.

• Providing new training for existing employees.

Other essential measures to ensure that human resources planning is an integral part of your human resources policy include:

• Creating a simple database of records with basic information on each employee (full name, date of birth, address, start date, starting wage, current wage, skills etc.)

• Developing job descriptions, performance standards and appraisals.

E.W. Vetter has visualized resources planning as "a process by which an organization should move from its current manpower position to its desired manpower position. Through planning, management strive 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 organization and the individuals receiving maximum long-run benefit."

Thus, human resource planning is a process which determines how an organization should move from its current manpower/human resources position to its desired manpower/human resources position. 

Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management. 

The process of HRP involves various steps they can be explained with the help of the following diagram. 

1. Personnel demand forecast

This is the very first step in HRP process. Here the HRP department finds out department wise requirements of people for the company. The requirement consists of number of people required as well as qualification they must possess. 

2. Personnel supply forecast

In this step, HR department finds out how many people are actually available in the departments of the company. The supply involves/includes number of people along with their qualification. 

3. Comparison

Based on the information collected in the 1st and 2nd step, the HR department makes a comparison and finds out the difference. Two possibilities arise from this comparison 

No difference :-It is possible that personnel requirement = personnel supplied. In this case there is no difference. Hence no change is required.

Yes, there is a difference :-There may be difference between supply and requirement. The difference may be 

• Personnel surplus

• Personnel shortage

4. Personnel surplus

When the supply of personnel is more than the requirement, we have personnel surplus. We require 100 people, but have 125 people. That is we have a surplus of 25 people. Since extra employees increase expenditure of company the company must try to remove excess staff by following methods.

• Layoff

• Termination

• VRS/CRS

• No recruitment

5. Personnel shortage

When supply is less than the requirement, we have personnel shortage. We require 100 people; we have only 75 i.e. we are short of 25 people. In such case the HR department can adopt methods like Overtime, Recruitment, Sub-contracting to obtain new employee.

Human Resource Planning at Different Levels

Human resource planning is done at various levels for their own purposes by various institutions. There are various levels of human resource planning in an industrial enterprise:

1. National Level

Generally, central government plans for human resources for the entire nation. It anticipates the demand for and supply of human requirements at the national level. HRP at the national level helps to plan for educational facilities, health care facilities, agricultural and industrial development, and employment plans etc. It also plans for occupational distribution, sectoral and regional allocation of human resources. 

2. Sectoral Level

Central and state governments also plan human resource requirements at sectoral level. It helps the government to allocate its resources to the various sectors depending upon the priority accorded to the particular sector. It tries to satisfy needs of some particular sectors like Agriculture Sector, Industrial Sector and Service Sector. 

3. Industry Level

HRP at the industry level takes into account the output/ operational level of that particular industry when manpower needs are considered. This level of planning is done to suit manpower needs of a particular industry such as Engineering, Heavy Industries, Paper Industry, Consumer Goods Industries. Public Utility Industries, Textile, Cement/Chemical Industries etc.

4. Unit Level

HR Planning at the company level is based on the estimation of human resource needs of the particular company in question. It is based on the business plan of the company. A manpower plan helps to avoid the sudden disruption of the company’s production since it indicates shortages of particular types of personnel, if any, in advance, thus enabling management to adopt suitable strategies to cope with the situation. 

5. Departmental Level

HRP at the departmental level looks at the manpower needs of a particular department in an organisation. This level of planning is done to suit the manpower needs of a particular department in a company e.g. Marketing Department, Production Department. Finance Department, etc. HRP at the departmental level looks at the manpower needs of a particular department in an organisation. 

6. Job Level

This level of planning fulfills the human resource needs of a particular job family within department. For example, the requirement of number of sales executes in the marketing department. 

Benefits of Human Resource Planning

1. A Better View to the business decision

HR planning leads to a better overall view of the business’s decisions by employees and the public. The actions taken by the organization become systematic and process-oriented, thus taking personal feelings out of the equation.

2. Retaining top talents

When a human resource plan is thoughtfully executed, organizations can better retain top talents. As any organization knows, getting a talented individual hired in is only half the battle– incentivizing them to stay can be another matter entirely.

3. Addressing the organization’s manpower needs

Human resource planning identifies a company’s needs with regards to manpower, thus allowing the organization to effectively address them.

4. Minimum Cost

Attracting and retaining talent costs money, there’s no getting around it. Human resource planning, however, allows organizations to minimize the money they spend on these areas, thus reducing costs overall and leading to more efficient operations.

5. Ensuring that the right people are hired

A solid human resource strategy helps organizations attract the right person for the job. This is especially important for any type of specialized position, where a specific background or knowledge is required, but it can also extend to more general positions. Finding an employee with the right attitude, for example, can greatly improve the experience of customers at a convenience store.

6. Facilitating expansion programs

If your business plans to expand, human resource planning can help your business prepare to do so with minimal growing pains. If you know there are going to be six openings coming up in the next year, you can begin to recruit for them now instead of waiting until it’s too late.

7. Training employees

Even the right employee for the job can’t counteract a lack of training. Human resource planning considers training an important part of the recruitment and retention process.

8. Managing employees

Employee management can be a challenge for any organization, big or small. A solid human resource plan ensures the right employees are placed in management roles.

9. Improved Utilization

HR planning can improve employee utilization by connecting the right employee with the right position. This increases productivity and leads to a more knowledgeable workforce.

10. Management Development

Hiring entry-level employees is tough– hiring management can be downright impossible. A human resource plan can direct your organization to potential employees that can be successfully groomed for management.

11. Information Base

A human resource plan serves as an information base for an organization. It contains data on the organization’s growth, hiring strategy, training plan, and retention. This can help the organization make more informed decisions in the future.

12. Coordination

One result of a successful human resource plan is coordination amongst different departments. There must be communication between departments to ensure accurate job descriptions and staffing predictions, for example.

13. Corporate Asset

A human resource plan can be a tremendous asset to any corporation, particularly larger ones or companies with multiple locations and moving parts.

14. Gradual Growth

HR strategies can ultimately lead to gradual growth for an organization, which is sustainable and ideal. Unchecked growth can put unnecessary strain on an organization and actually harm it in the long run.

15. Coping with change

Organizations must adapt to changes in the environment, both locally and abroad. A human resource plan can help a company adapt to changes, potentially even staying one step ahead.

16. Adjusting with the Rapid Technological Change

Technological change occurs at a rapid pace, and it’s critical for organizations to keep up. Human resource plans can help make sure that your company does not get left behind.

Factors affecting HRP

Several factors affect HRP. These factors can be classified into external factors and internal factors.

A) External Factors:

a) Government Policies 

Policies of the government like labour policy, industrial relations policy, policy towards reserving certain jobs for different communities and sons-of the soil, etc. affect the HRP.

b) Level of Economic Development 

Level of economic development determines the level of HRD in the country and thereby the supply of human resources in the future in the country.

c) Business Environment 

External business environmental factors influence the volume and mix of production and thereby the future demand for human resources.

d) Level of Technology 

Level of technology determines the kind of human resources required.

e) International Factors

International factors like the demand for resources and supply of human resources in various countries.

f) Outsourcing

Availability of outsourcing facilities with required skills and knowledge of people reduces the dependency on HRP and vice-versa.

B) Internal Factors:

a) Company policies and strategies 

Company policies and strategies relating to expansion, diversification, alliances, etc. determines the human resource demand in terms of quality and quantity.

b) Human resource policies 

Human resources policies of the company regarding quality of human resource, compensation level, quality of work-life, etc., influences human resource plan.

c) Job analysis 

Fundamentally, human resource plan is based on job analysis. Job description and job specification determines the kind of employees required.

d) Time horizons 

Companies with stable competitive environment can plan for the long run whereas the firms with unstable competitive environment can plan for only short- term range.

e) Type and quality of information 

Any planning process needs qualitative and accurate information. This is more so with human resource plan; strategic, organisational and specific information.

f) Company’s production operations policy 

Company’s policy regarding how much to produce and how much to buy from outside to prepare a final product influence the number and kind of people required.

g) Trade unions 

Influence of trade unions regarding number of working hours per week, recruitment sources, etc., affect the HRP.