Human Resource Planning Process

The Human Resource Planning is a process of forecasting the organization’s demand for and supply of
manpower needs in the near future.

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is the continuous process of systematic planning ahead to achieve
optimum use of an organization's most valuable asset—quality employees. Human resources planning
ensure the best fit between employees and jobs while avoiding manpower shortages or surpluses.

There are four key steps of the HRP process. They include analyzing present labor supply, forecasting
labor demand, balancing projected labor demand with supply, and supporting organizational goals.

HRP helps companies are an important investment for any business as it allows companies to remain both
productive and profitable.

Human Resource Planning Process

1. Determining the Objectives of Human Resource Planning: The foremost step in every process is
the determination of the objectives for which the process is to be carried on. The objective for
which the manpower planning is to be done should be defined precisely, so as to ensure that a
right number of people for the right kind of job are selected.

The objectives can vary across the several departments in the organization such as the personnel demand
may differ in marketing, finance, production, HR department, based on their roles or functions.

2. Analyzing Current Manpower Inventory: The next step is to analyze the current manpower
supply in the organization through the stored information about the employees in terms of their
experience, proficiency, skills, etc. required to perform a particular job.

Also, the future vacancies can be estimated, so as to plan for the manpower from both the internal (within
the current employees) and the external (hiring candidates from outside) sources. Thus, it is to be ensured
that reservoir of talent is maintained to meet any vacancy arising in the near future.
 3. Forecasting Demand and Supply of Human Resources: Once the inventory of talented manpower
is maintained; the next step is to match the demand for the manpower arising in the future with
the supply or available resources with the organization.

Here, the required skills of personnel for a particular job are matched with the job description and
specification.

4. Analyzing the Manpower Gaps: After forecasting the demand and supply, the manpower gaps can
be easily evaluated. In case the demand is more than the supply of human resources, that means
there is a deficit, and thus, new candidates are to be hired.

Whereas, if the Demand is less than supply, there arises a surplus in the human resources, and hence, the
employees have to be removed either in the form of termination, retirement, layoff, transfer, etc.

5. Employment Plan/Action Plan: Once the manpower gaps are evaluated, the action plan is to be
formulated accordingly. In a case of a deficit, the firm may go either for recruitment, training,
interdepartmental transfer plans whereas in the case of a surplus, the voluntary retirement
schemes, redeployment, transfer, layoff, could be followed.
6. Training and Development: The training is not only for the new joinees but also for the existing
employees who are required to update their skills from time to time.

After the employment plan, the training programmes are conducted to equip the new employees as well as
the old ones with the requisite skills to be performed on a particular job.

7. Appraisal of Manpower Planning: Finally, the effectiveness of the manpower planning process is
to be evaluated. Here the human resource plan is compared with its actual implementation to
ensure the availability of a number of employees for several jobs.

At this stage, the firm has to decide the success of the plan and control the deficiencies, if any.

Thus, human resource planning is a continuous process that begins with the objectives of Human
Resource planning and ends with the appraisal or feedback and control of the planning process.

Human Resource planning is the main part of the this complete HR process as this includes
recruitment, selection, training, evaluation, remuneration, administration, employee relations,
benefits etc.

8 processes of human resource planning

Human resource (HR) planning or manpower planning is a continuous process. The human resource
manager is required to revise the employment policies from time to time for achieving the best results.
Human resource planning/ manpower planning process involve the following steps:-

1. Objectives of human resource planning: human resource planning must be matched with

overall organizational plans.  It should be concerned with filling future vacancies rather than
matching existing personnel with existing jobs.

2. Current manpower stock: Current manpower stock must be continuously maintained by

every department. Manpower inventory must have the detailed bio data of each individual . this
record not only help in employee development but also in the finding out the surplus/ shortage of
manpower.
3. Demand/ supply forecasting: firstly the organization must check the demand of manpower
after every one year, two-year so on. For this purpose employment trends to show the number
of employees on payroll during last say three years to show the trend.

Replacement needs arise due to the death, retirement or termination of the employees.

Growth and expansion helps in creating a number of positions at work place.

After the demand forecasting it is also important to check the supply of the different type of
personnel for this purpose human resource audit, replacement charts can be prepared.

4. Determining net requirement: human resource manager must check the demand and supply
of the manpower before deriving at any conclusion.

5. Redeployment and redundancy: in redeployment the surplus employees in one department

can be transferred to another department where deficit of employees estimated and in case of
redundancy where surplus employees cannot be redeployed they can be offered voluntary
retirement scheme.

6. Employment program: here it is required to prepare programs of recruitment, selection,

transfer and promotion to achieve organization goal.

7. Training and development: it is very necessary for the employees to keep them updated in
the job they are doing.

8. Evaluation of Human resource planning: after doing all the above steps it is necessary to
evaluate the effectiveness of human resource planning.

Thus, the above mentioned steps are important steps for the process of human resource planning.

Process, Steps and Stages of Human Resource Planning

(with notes and Examples )

Process of Human Resource Planning – 7 Steps Involved in the Process of Human Resource Planning

The process of human resource planning involves the following steps:

Step # 1. Ascertaining Current Inventory:

Analysis of current manpower supply may be undertaken by department, by function, or by occupation.

Appropriate adjustments in these would need to be made in the light of any foreseeable changes in weekly
hours of work, holidays, leave entitlements, etc. Assessment of demand for the operative personnel
presents less problems of uncertainty and manpower supply can be adjusted accordingly.

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But projection of manpower requirements for supervisory and managerial levels presents a complex
problem. The required talents are not available at a short notice. This explains the need to ascertain the
present manpower inventory in the enterprise. This will also help in drawing employment and training
plans to meet the needs of certain skills of the future.

Step # 2. Estimating Human Resource Demand or Requirements:

Forecast of manpower requirements may be done by finding the total workload and then converting it into
manpower required. Workload analysis proceeds with the projection of sales in the coming year. The
budget of productive hours is compiled by the use of standard hours for direct labor.

The standard hours per unit of a product are then multiplied by the planned units of production to give the
total planned hours for the period. This is divided by the number of actual working hours for an individual
worker to show the number of workers required. This gives a crude estimate of manpower requirements.
Allowance may have to be made for absenteeism, labor turnover and idle time to know the actual
workforce required. This is known as ‘workforce analyses.

The whole procedure of manpower forecasting has been illustrated in the following example:

(a) Planned output for a year = 50,000 units

(b) Standard man hours per unit = 4 hrs

(c) Planned hours for the year (a x b) = 2,00,000 hrs

(d) Productive hours per man per year = 2,000 hrs

(e) No. of direct workers required (c/d) = 100 workers

(f) Allowance for absenteeism, labour turnover and idle time = 25 workers
(g) No. of workers required (e + f) = 125 workers.

Step # 3. Projecting Supply of Human Resources:

It is necessary to estimate the number and kinds of employees that are expected to be with the
organisation after one year, two years, three years and so on. Such projections should be based on careful
assessment of organisation’s current human resources and consideration of employee movement through
retirement, resignation, etc. in future.

Step # 4. Comparing Forecast Demand with Projected Supply

The human resource planner must compare the forecast demand for human resources with the projected
internal supply of human resources before coming to any conclusion. This exercise should be carried out
department and skill wise to know the deficiencies or surplus of various types of personnel in future. The
possibilities of transfer of personnel from one department to another and promotion of personnel to higher
jobs must also be considered to determine net human resource requirements in the organisation as a
whole.

Step # 5. Planning Employment Programme to Meet Human Resource Needs:

Long-term employment programme must be chalked out to deal with expected deficits of manpower. It
will include steps like recruitment, selection, placement, performance appraisal, transfer and promotion.
Recruitment, selection and placement.

Step # 6. Training and Development Programme:

The purpose of assessing the manpower inventory is to find out the training and development needs of the
organisation. The operative employees must be given appropriate training so that they may learn the
required skills. Appropriate development programmes should also be designed for the executives so that
the required talents could be developed.

Step # 7. Evaluation of Human Resource Planning Effectiveness:

Human resource planning is closely linked to the goals of human resource management and those of the
organisation. Shortage or surplus of human resources in any department or at any level should be
minimized. Human resource planning programme will be effective if it can anticipate the deficiencies of
various skills well in time so that steps are initiated for recruitment of required human resources.
Similarly, if some types of personnel are surplus, they should be adjusted after giving them appropriate
training. If it is not possible, they may be phased out through voluntary retirement scheme.

Process of Human Resource Planning – Brief Description of Human Resource Planning Process

HRP process entails working out HR demands and identification of the sources of supply to meet these
demands, yet an HRP process is a very complex and multi-step process and embraces within its folds
things such as determining objectives, going through business plan, forecasting future HR requirements,
manpower auditing, carrying out job analysis and preparing an HR plan taking into consideration both
internal and external sources.

A brief description of all process are given as under:

Process # 1. Environmental Scanning:

Environmental scanning is the first step in the process of HRP. In order to have an HR plan, the external
environment which basically comprises economic factors, labour market, technological changes, demo-
graphic trends, socio-cultural-political factors and so on must be thoroughly studied and closely
monitored. It is essential to scan changes in the external environment and align the business of the
organisation and HR plans with the environmental demands.

Process # 2. Business Plan:

Having determined the objectives of the organisation, the next important step in the process of HRP is to
get involved in the business plan, that is, to arrive at the scale of business activity over a period of time to
be able to estimate the structure and size of the organisation over a period of time. This is to be done
keeping in view all the factors of internal and external environment.

Process # 3. Forecasting Future HR Requirements:

Having estimated the structure and size of the organisation over a period of time, the next exercise to be
done in the HRP process is forecasting the future manpower requirement. These days, a lot of forecasting
techniques, many of which are highly mathematical, statistical and sophisticated, have been developed.

But these sophisticated forecasting techniques are of greater value in the case of big organisations. In
smaller organisational units, even simpler methods can serve the purpose and often may be more
effective.