2. Human Resource Planning – Out Line
I. What is it?
II. Why is it important?
III. How is it done?
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3. I- What is it?
According to Geisler, “Manpower planning is the process including
forecasting, developing and controlling by which a firm ensures that it has
• The right number of people,
• The right kind of people,
• At the right places,
• At the right time,
doing work for which they are economically most useful”.
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4. I- What is it?
Human resource planning is the process of anticipating and carrying
out the movement of people into, within, and out of the organization.
Human resources planning is done to achieve the optimum use of
human resources and to have the correct number and types of
employees needed to meet organizational goals.
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5. II. Why is it important?
A. often long lag times to fill positions.
B. often influences both turnover(Number of employees hired to replace those
who left or were fired during a 12 month period.) and productivity(The amount of output per unit
of input (labor , equipment, and capital).
• C. the “demographic imperative” (Characteristics of population
Class, age, sex, orientation ability )demands more such planning.
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6. III. How do you do it?
A. General Comments:
1. It is a process of comparing human
resource supply with human resource
demand.
2. It works best when it is tied to:
a. the organization’s strategic planning process
b. all available forecasts (technological , economic, market, etc)
3. When there are variances, action plans must
be formulated.
a. for surpluses, will organization use layoffs, retirement incentives,
reduced hours, or something else?
b. for shortages, will organization use overtime, temporary workers,
or recruit new permanent workers?
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7. III. How do you do it?
B. Methods Used for Human Resource Planning:
1. Approaches to forecasting:
a. Qualitative:
i. Expert opinions
ii. Delphi technique
iii. “Bottom-up” approach
b. Quantitative (mathematical modeling):
i. Regression analysis / Trend analysis
ii. Markov analysis
2. Supply Analysis
a. Skills inventories
i. Card systems
ii. Human Resource Information Systems (HRIS)
b. Replacement charts / Succession plans
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8. •Human Resource Planning
• Interfacing with strategic planning
Process and scanning the environment
• Taking an inventory of the
company’s current human resources
• Forecasting demand for human
resources
• Forecasting the supply of HR
from within the organization and in
the external labor market
•8
9. HRP Process Cont.
• Comparing forecasts of demand and supply
• Planning the actions needed to deal with anticipated shortage or overages
• Feeding back such information into the strategic planning process
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10. Example of the Basic Human Resources Planning Model
1 2 3
Organizational Human Resource Human Feasibility
Objectives Requirements Resource Analysis
Programs
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5
• Strategic Human Resource Planning
Links 1 & 5: HR objectives are linked to organizational objectives and planning
• Designed to insure consistency between organization's strategic planning process and HRP.
So objectives of strategic plan are feasible and
HR programs are designed around what organizational objectives and strategies require in
terms of human resource goals.
• Operational Human Resource Planning
Steps 2,3, & 4
• Ensure HRP programs are coordinated and allows the organization to meet its human
resource requirements.
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11. Example of the Basic Human Resource Planning Model
Open new Develop staffing Recruit skilled Recruiting and
H
product line for new
installation 2
workers training
3 programs
1
Open new Develop feasible
•Production technical training
factory and
workers programs Transfers
distribution infeasible
system •Supervisors Transfer because of
•Technical staff managers from lack of
other facilities managers with
•Other managers
4 right skills
Develop
new Recruit Too costly to
objectives managers from 3 hire from
and plans 5 outside outside
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12. Link 1:Determine Demand (labor requirements)
• How many people need to be working and in what jobs to implement
organizational strategies and attain organizational objectives.
• Involves forecasting HR needs based on organizational objectives
Example - Peak production could be handled by temporary workers or
assigning overtime. Machine breakdowns assigned to maintenance
department or handled by machine operators
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13. Link 2:Determine HR Supply (availability)
• Choose HRM programs (supply)
• Involves forecasting or predicting effect of various HR programs on
employee flowing into, through and out various job classifications.
• First determine how well existing programs are doing then forecast what
additional programs or combination of programs will do
• Need to know capabilities of various programs and program combinations
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14. Determine Feasibility Links 3 & 4
• Capable of being done
– Requires knowledge of programs, how programs fit together and
external environmental constraints (e.g., labor force, labor unions,
technology created skill shortages) and internal environmental
constraints (skill shortages within the organization, financial
resources, managerial attitudes, culture)
• Do the benefits outweigh the costs
– Difficulty in quantifying costs and benefits
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15. Revise Organizational Objectives and Strategies Link 5
“If no feasible HR program can be
devised, the organization must revise
strategic plans.”
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16. Human Resource Forecasting
• Process of projecting the organization’s future HR needs
(demand) and how it will meet those needs (supply) under a
given set of assumptions about the organization’s policies
and the environmental conditions in which it operates.
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17. Reasons for demand forecasting:
1. Quantify the jobs necessary for producing goods.
2. Assess appropriate staffing levels in different parts
organization to avoid unnecessary costs.
3. Prevent shortage of people when they are needed
most.
4. Monitor compliance with legal requirements.
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18. Potential benefits
• Upper management better aware.
• Personnel cost is controlled.
• Less time to locate talent.
• Affirmative Action Plan implemented
• Time to develop employees
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19. HUMAN RESOURCE PLANNING PROCESS
Forecast of
labour Forecasts of
demands labour supply
Forecasts of
labour surplus
or shortage
Goal setting
and strategic
planning
Program
implementation
and evaluation
20. Program Planning Options
Hire new full-time employees
Offer incentives for postponing retirement
Re-hire retired employees on part-time basis
If a shortage of Attempt to reduce turnover
employees is expected Bring in overtime for present staff
…. Subcontract work to another company
Hire temporary employees
Re-engineer to reduce needs.
Do not replace employees who leave
Offer incentives for early retirement
Transfer or re-assign excess employees
If a surplus of employees is
Use slack time for employees training or
expected ….
equipment maintenance
Reduce work hours
Lay-off employees
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21. Options for reducing an expected labor surplus
Option Speed Human Suffering
Downsizing Fast High
Pay reductions Fast High
Demotions Fast High
Transfers Fast Moderate
Work sharing Fast Moderate
Retirement Slow Low
Natural attrition Slow Low
Retraining Slow Low
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22. Options for avoiding an expected labor shortage
Option Speed Human Suffering
Overtime Fast High
Temporary employees Fast High
Outsourcing Fast High
Retrained Transfers Slow High
Turnover reductions Slow Moderate
New external hires Slow Low
Technological Slow Low
innovation
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