1. Human Resource Planning

2. HRP defined According to Coleman
“it is the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization”
Strainer defines it as
“a strategy for the acquisition, utilization, improvement, and presentation of an enterprise’s human resources”

3. Objectives of HRP To ensure adequate supply of manpower
Ensure proper use of existing human resources
Forecast future requirements of human resources with different levels of skills
Assess surplus or shortage, if any, of human resources available over a period of time
Anticipate the impact of technology on jobs
Control the human resources already deployed in the organization
Provide lead time available to select and train the required additional human resources

4. Need for HRP
Despite unemployment, there has been a shortage of human resources with required skills, qualifications and capabilities
Employees who retire, die, leave organizations or become incapacitated, need to be replaced by new employees
It is also essential in the force of marked rise in workforce turnover which is unavoidable
It is needed in order to meet the needs of expansion and diversification programmes
Technological changes and globalization usher in change in method of production which may require a change in the skills of the employees

5. HRP Process Organizational environment scanning
Formulation of HR objectives and policies
Demand forecasting
Supply forecasting
HR programming
HRP implementation
HRP controlling and evaluation

6. Demand forecasting techniques
Ratio Trend Analysis
Refers to the technique under which ratios are calculated (e.g., total output/total number of workers, total sales volume/ number of sales persons)
Example,
Units produced in = 10,000
Number of workers in = 500
Ratio = 500 : 10,000 = 1:20
Estimated production in = 25,000
Number of workers required in = Estimated production x Ratio
Number of workers required in = x 1/20 = 1250

7. Demand forecasting techniques
Regression Analysis
In this technique, regression equations are formed and solves with the help of different software
It is used to forecast the future workforce demand based on factors such as sales, output, profit, productivity and existing number of employees
Bureks – Smith Model
Mathematical model based on selected key variables that influence the overall workforce needs
En = [(Lagg + G) 1/X] Y
Where,
En = Estimated human resource demand
n = Planning period
Lagg = Overall turnover or aggregate level of business activity in Rupees
G = Total growth in business activity during period n
X = Average improvement in productivity
Y = Conversion figure that relates the present overall activity to the human resource needed

8. Demand forecasting techniques
Work Study Technique
It is used in cases where it is possible to measure the work to determine the duration of the operations and the number of employees required
It estimates the required number of employees possessing desirable skill sets to accomplish the total production targets
Example,
Planned output for the next year = 25,000 units
Standard hours per unit = 4 hours
Planned hours required for the work = 25,000 X 4 = 1,00,000
Productive hours per worker per year = 2,000
Number of workers required = 1,00,000/2,000 = 50

9. Demand forecasting techniques
Management Judgment or Managerial Judgment
Managers sit together and discuss their future work assignments and tasks, and estimates how many people they need
It can be either ‘bottom-up’ or ‘top-down’
In case of bottom-up approach, line managers prepare departmental requirements for human resource and submit it to top managers for their review
In the top-down approach, the top managers prepare the departmental forecasts which are reviewed with the departmental heads or managers
Expert opinion
Refers to the technique based on the executive or expert decisions provided by the different departmental heads or other knowledgeable persons
The judgmental views of experts are collected to produce a forecast about the future manpower demand

10. Demand forecasting techniques
Group Brainstorming
Involves face-to-face discussion on various issues by experts who make some assumptions about the future course of action for the business
Experts first examine the strategic plans of the organization and then try to predict the future demand of employees
Nominal Group Technique (NGT)
A problem or issue is presented to the group and each member of the group individually produces as many solutions as possible
All generated answers are presented to the group for clarification
The group proposes the most feasible and realistic solutions based on the clarifications

11. Demand forecasting techniques
Delphi Technique
A series of questions is individually asked to a jury of experts about their perceptions of future events.
In this technique, the direct interaction among the members is avoided
It involves the use of questionnaires and the results are fed back to the group members so that they can come to a consensus
This method is however, very time consuming

12. Supply forecasting techniques
Markov Analysis or Flow Models
Uses historical flow rates of workforce to predict future rates
The flow of workforce over years within the organization is shown by means of probabilities
The probability of how many existing employees would be retained, transferred, promoted, terminated, resigned and demoted is estimated
Thereafter, future workforce flows are estimated based on the present data
Turnover Analysis
Examines the attrition rate and its historical trends in detail
The information for the analysis is gathered from exit interviews and labour turnover rates are calculated from the past data
The turnover rates are estimated for each job category, department and division

13. Supply forecasting techniques
Goal Programming
The desirable employment pattern is estimated considering various potential constraints, such as total salary budget and limit of the new employees that can be recruited
Skill Inventory
Refers to the technique in which skills, knowledge, abilities, expertise and career aspirations of present pool of human resource is assessed
The existing skill inventory should be updated every two years to incorporate the changes

14. Supply forecasting techniques
Succession Planning
Involves the preparation of an inventory report of executives representing which candidates are prepared to be promoted to the higher managerial level positions in the organization
Replacement Chart
Refers to the short-term replacement schedules that map the possible substitution of the employees within the hierarchy of the organization
Can be used in predicting internal supply, especially for the managerial positions

15. HR programming
This step deals with the reconciliation of demand and supply
It is also termed as Human Resource Gap Analysis
It provides the basis for preparing Human Resource plans by eliminating the gap between the demand and supply of human resource

16. If shortage of employees is expected
Hire new full time employees
Offer incentives for postponing retirement
Re-hire retired employees on part-time basis
Attempt to reduce turnover
Overtime for present staff
Sub-contract work to another company
Hire temporary employees

17. If a surplus of employees is expected
Incentives for early retirement
Transfer/ redeployment by placing employees in another branch or department
Retrenchment /Lay-off
Do not replace employees who leave the organization with new ones’
Outplacement
Use slack time for employee training

18. HRP Implementation and Controlling and Evaluation
HRP implementation involves the execution of HR plans
The last step involves monitoring and controlling of HR plans to ensure their proper execution
HR plans should be developed considering the budget, time limits, targets and established standards