Human Resource Planning: Definition, Objective, Benefit & affecting Factors

Human resource planning is the process of forecasting a firm’s future demand for, and supply of, the right type of people in the right number.

Human resources planning refers to the estimation of the number and the type of people needed during the ensuring period.

Human resources planning means deciding the number and type of the human resources required for each job, limit and the total company for a particular future date in order to carry out organisational activities.

Definition of Human resource planning

Many authors has different views on human resource planning.

According to Leon C. Megginson Human resources 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 organisational objectives and satisfy the individual needs and goals of organisational members.”

E.W vetter defined that “Human resources planning is a process by which an organisation should move from its current manpower position to its desired manpower position.

Though planning management strives to have the right number an right kind of people at the right place at the right time, doing things which result in both the organisation and the individual receiving maximum long-run benefit.”

Objectives of Human Resource planning

The important objectives of manpower planning in an organisation are:-

Point 1: To recruit and retain the human resources of required quantity and quality.

Point 2: To foresee the employee turnover and make the arrangements for minimizing turnover and filling up of consequent vacancies.

Point 3: To meet the needs of the programmes of expansion, diversification etc.

Point 4: To foresee the impact of technology on work, existing employees and future human resources managements.

Point 5: To improve the standards, skill, knowledge, ability, discipline etc.

Point 6: To assess the surplus or shortage of human resources and take measures accordingly.

Point 7: To maintain congenial industrial relations by maintaining optimum level and structure of human resources.

Point 8: To minimize imbalances caused due to non-availability of human resources of the right kind, right number in right and right place.

Point 9: To make the best best use of its human resources

Point 10: To estimate the cost of human resources.

Benefits of Human resource planning

Human resource planning anticipates not only the required kind and number of employees but also determines the action plan for all the functions of personnel management.

The major benefits of human resources planning are:

Benefit 1: It checks the corporate plan of the organisation.

Benefit 2: It offsets uncertainty and change. Human resources planning offsets uncertainties and changes to the maximum extent possible and enables the organisation to have right men at the right time and in the right place.

Benefit 3: It provides scope for advancement and development of employees through training, development etc.

Benefit 4: It helps to anticipate the cost of salary enhancement, better benefits etc.

Benefit 5: It helps to anticipate the cost of salary, benefits and all the cost of human resources, facilitating the formulation of budgets in an organisation.

Benefit 6: To foresee the need for redundancy and plan to check it or to provide alternative employment in consultation with trade unions, other trade unions, other organisations and the government through remodeling organisational, industrial, and economic plans.

Benefit 7: To foresee the changes in values, aptitude, and attitude of human resources and to change the techniques of interpersonal management etc.

Benefit 8: To plan for physical facilities, working conditions and the volume of fringe benefits like canteen, schools, hospitals, conveyance, child care centers, quarters, company stores etc.

Benefit 9: It gives an idea of the type of tests to be used and interview techniques in selection based on the level of skills, qualifications, intelligence, values etc. of future human resources.

Benefit 10: It causes the development of various sources of human resources to meet the organisational needs.

Benefit 11: It helps to take steps to improve human resources contribution in the form of increased productivity, sales, turnover etc.

Benefit 12: It facilities the control of all the functions, operations, contribution and cost of human resources.

Process of Human Resource planning

The eight steps of human resource planning are depicted in the order below mentioned.

Human Resource Planning
Process of Human Resource Planning

Process of human resources planning consists of the following steps:

1: Analyzing the corporate and unit level strategies.

Human resources planning should start with analyzing corporate level strategies. These strategies include expansion, diversification, mergers, acquisitions, reduction in operations, low cost and differentiation.

Human resources implementation essentially requires possessing the required number and kind of employees. This is turn requires human resources plan.

2: Demand forecasting

Forecasting the overall human resources requirements in accordance with the organisational plans.

Demand forecasting is the process of estimating be quantity and quality of people required to meet future needs of the organisation.

The existing job design and analysis may thoroughly be reviewed keeping in view the future capabilities, knowledge and skills of present employees.

One of the important aspects of demand forecasting is the forecasting of the quality of human resources for example – skills, knowledge values, capabilities etc.

3. Supply forecasting

Supply forecasting the first step of forecasting the future supply of human resources is to obtain the data and information about the present human resources inventory.

Supply forecast determines whether the HR department will be able to procure the required number of personnel.

Specifically, Supply forecast measures the number of people likely to be available from within and outside an organisation.

4. Estimating the net human resources requirements.

Net human resources requirements in terms of number and components are to be determined in relation to the overall human resource requirements for a future date and supply forecast for that date.

The difference between overall human requirements and future supply of human resources is to be found out.

This difference is the net human resources requirements.

5. In case of future surplus, plan for redeployment, retrenchment and lay-off.

If future surplus is estimated, the organisation has to plan redeployment, redundancy etc.

If surplus is estimated in some jobs/departments, employees can be redeployed in other jobs/departments where the deficit of employees is estimated.

Redeployment takes place in the form of  transfers. It is the deficit is not estimated in any job/department and surplus is estimated for the entire organisation.

6. In case of future deficit, forecast the future supply of human resources from all sources with reference to plans of other companies.

7. Plan for recruitment, development and internal mobility if future supply is more than or equal to net human resources requirements.

8. Plan to modify or adjust the organisational plan if future supply will be inadequate with reference to future net requirements.

Problems in Human resource planning

Human resources planning is beneficial to the organisation, employees and trade unions, some problems crop up in the process of human resources planning.

Important among them are:

  • Resistance by employers and employees
  • Uncertainties
  • Inadequacies of information system

1. Resistance by employers and employees

Many employees resist Human resources planning as they think that it increases the cost of manpower as trade unions demand for employees based on the plan, more facilities and benefits including training and development.

Trade unions and employees also resist human resources planning as they view that it increases the workload of employee and prepares programmes for securing human resources mostly from outside.

2. Uncertainties

Uncertainties are quite prominent in human resources practices in India due to absenteeism, seasonal employment employment, labour turnover.

3. Inadequacies of information system

Information system regarding human resources has not fully developed in India Industries due to low status given to personnel department and less importance attached to human resources Planning.

Factors affecting Human resources Plan

Human resources planing is affected by a variety of factors both external and internal factors.

External Factors 

Factor 1: 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.

Factor 2: Level of Economic development

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

Factor 3: Business Environment

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

Factor 4: Information Technology

Information technology brought amazing shifts in the way how do business operate? such as business process engineering, enterprise resources planning and supply chain management.

These changes brought unprecedented reductions in traditional human resources and increase in software specialists.

Factor 5: Level of technology

Level of technology determines the kind of human resources required.

Factor 6: International Factors

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

Internal factors

Factor 1: Company Strategies

Company’s policies and strategies relating to expansion, diversification, alliances etc. determine the human resources demand in terms of quality and quantity.

Factor 2: Human resources Policies

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

Factor 3: job analysis

Human resources plan is based on job analysis. Job analysis and job specification. Thus, the job analysis determines the kind of employee required.

Factor 4: Time Horizons

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

Factor 5: Type and Quality of information

Any planning process needs qualitative and accurate information. This is more so with human resources plan.

Factor 6: 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 influences the number and kind of people required.

Factor 7: Trade unions

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

At last words, Human resources planning is influenced by several factors, such as the type and strategy of organisation environment uncertainties, time horizons, type and quality of information and type of jobs being filled.

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