Human Resource Planning seeks to place the right employees in the right jobs at the right time so that an organisation can meet its objectives. Human resource planning tries to forecast personnel demand, assess supply and reconcile the two in a systematic manner. When developing HR plans, it is important for managers to scan the external environment to identify the
effects of economic conditions, regional and competitive pressures, governmental influences and workforce composition and patterns.
Concept of Human Resource Planning
Human resource is an important corporate asset and the overall performance of companies depends upon the way it is put to use. In order to realise company objectives, it is essential to have a human resource plan. Human Resource Planning (also called employment or personnel planning) is essentially the process of getting the right number of qualified people into the right job at the right time so that an organisation can meet its objectives. It is a system of matching the supply of people (existing employees and those to be hired or searched for) with openings the organisation expects over a given time frame.
Human Resource Planning (HRP) is a forward-looking function. It tries to assess human resource requirements in advance keeping the production schedules, market fluctuations, demand forecasts, etc., in the background. The human resource plan is subject to revision, of course, and is tuned to the requirements of an organisation from time to time. It is an integral part of the overall corporate plan and reflects the broad thinking of management about manpower needs within the organisation.
The focus of the plan is always on getting a right number of qualified people into the organisation at the right time. To this end, human resource plans are prepared for varying time periods, i.e., short term plans covering a time frame of 2 years and long term plans encompassing a period of 5 or more years.
Objectives of HRP
The basic purpose of having a human resource plan is to have an accurate estimate of the number of employees required, with matching skill requirements to meet organisational objectives. It provides information about the manner in which existing personnel are employed, the kind of skills required for different categories of jobs and human resource requirements over a period of time in relation to organisational objectives.
More specifically, HR planning is required to meet the following objectives:
1. Forecast personnel requirements: HR planning is essential to determine the future manpower needs in an organisation. In the absence of such a plan, it would be difficult to have the services of right kind of people at the right time.
2. Cope with changes: HR planning is required to cope with changes in market conditions, technology, products and government regulations in an effective way. These changes may often require the services of people with the requisite technical knowledge and training. In the absence of an HR plan, we may not be in a position to enlist their services in
3. Use existing manpower productively: By keeping an inventory of existing personnel in an enterprise by skill, level, training, educational qualifications, work experience, it will be possible to utilise the existing resources more usefully in relation to the job requirements. This also helps in decreasing wage and salary costs in the long run.
4. Promote employees in a systematic manner: HR planning provides useful information on the basis of which management decides on the promotion of eligible personnel in the organisation. In the absence of an HR plan, it may be difficult to ensure regular promotions to competent people on a justifiable basis.
Importance of HRP
Human Resource Planning is a highly important and useful activity. If used properly, it offers a number of benefits:
1. The reservoir of talent: The organisation can have a reservoir of talent at any point in time. People with requisite skills are readily available to carry out the assigned tasks.
2. Prepare people for future: People can be trained, motivated and developed in advance and this helps in meeting future needs for high-quality employees quite easily. Likewise, human resource shortages can also be met comfortably (when people quit the organisation for various reasons) through proper human resource planning.
3. Expand or contract: If the organisation wants to expand its scale of operations, it can go ahead easily. Advance planning ensures a continuous supply of people with requisite skills who can handle challenging jobs easily.
4. Cut costs: Planning facilitates the preparation of an appropriate HR budget for each department or division. This, in turn, helps in controlling manpower costs by avoiding shortages/excesses in manpower supply. The physical facilities such as canteen, quarters, school, medical help, etc., can also be planned in advance.
5. Succession planning: Human Resource Planning, as pointed out previously, prepares people for future challenges. The ‘stars’ can be picked up and kept ready for further promotions whenever they arise. All multinational companies, for example, have this policy of having a ‘hot list’ of promising candidates prepared in advance e.g., HLL, Proctor & Gamble, Godrej consumer products etc. Such candidates are rolled over various jobs and assessed and assisted continuously. When the time comes, such people ‘switch hats’ quickly and replace their respective bosses without any problem.