Definition: Human resource planning (HRP) is a systematic approach to ensure the best possible utilization of the company’s manpower. It is an ongoing process of analyzing the organization’s manpower availability, forecasting personnel demand, evaluating the gap and framing relevant strategies.
HRP is all about keeping a check over the shortage or surplus of the organizational workforce. It not only focuses on the quantity of manpower but also it’s quality in terms of skills and competency.
Content: Human Resource Planning (HRP)
Features of Human Resource Planning
Human resource planning is a widely adopted practice in every kind of business entity. Following are the various characteristics of HRP:
- Dynamic Nature: Prone to environmental changes, human resource planning is vigorous and requires expert supervision.
- Integrant of Corporate Planning: HRP can be seen as an essential sub-part of the organization’s overall strategic approach.
- Based on Forecast: When demand anticipation and its fulfilment comes into role play, it all depends upon prediction.
- Human Resource Systems Approach: As we know human resource management is a complete system, HRP is its crucial part.
- Future-Oriented: HRP aims at avoiding any future shortage or surplus of manpower instead of dealing with the present-day situation.
- Continuous Process: The entry and exit of personnel is a never-ending process in an organization and so is the human resource planning process.
- Clear Objectives: Even the human resource planning revolves around the desired goal set parallel to the corporate objective.
- Manpower Demand and Supply Function: HRP initiates gap analysis between the demand and supply of the personnel in the organization.
Purpose of Human Resource Planning
Human resource planning is an elementary part of human resource management. The reasons for adopting HRP practice are as follows:
- Human Resource Optimization: The major reason behind HRP is to maintain a proper balance between the demand and supply of the personnel.
- Creation of Manpower Inventory: Another important purpose behind human resource planning is to maintain a valuable manpower reserve.
- Succession Planning: HRP also frames strategies for the promotion of the deserving employees to a vacant superior position.
- Initiates Training and Development: The need for imparting new skills to the existing employees and making the fresh hires more competent is equally essential.
- Facing Environmental Challenges: The external environment pose insecurities and threats to the company, HRP prepares the HR team for such circumstances.
- Filling Manpower Gap: HRP ensures that the deficit of human resource is successfully met with the acquisition of talented personnel.
- Provides Human Resource Insights: The human resource capacity and efficiency can be well-analyzed through HRP information.
- Initiates Diversification or Expansion: When the company plans for local or global expansion, HRP helps in fulfilling the manpower capacity.
Human Resource Planning Process
How does a human resource manager proceed with HRP? The task becomes effortless with the below given seven-step process:
- Determining Human Resource Objectives: Human resource planning is done with a definite aim, therefore the primary step is to determine this company’s manpower objectives.
- Assessing Human Resource Supply: The next step is to keep a track of the available human resource and the skill competencies of the present staff.
- Estimating Human Resource Demand: Now, the manpower requirement of the organization has to be determined, keeping in mind the quantity and quality of the resource.
- Evaluating Manpower Gap: The deficit or surplus of the human resource is analyzed at this stage by comparing the manpower demand and supply in the organization.
- Formulating Action Plan: At this point, the human resource team take measures to recruit or promote the manpower to overcome deficit; or furlough or layoff the employees in case of surplus.
- Training and Development: The company also plans for the upskilling of the existing employees as well as the new entrants to realise the human resource objectives.
- Review, Feedback and Control: Time to time monitoring of the human resource efficiency along with suggesting the desired changes are equally important.
Strategic Human Resource Planning (SHRP)
When strategies come into the framework as a subpart of strategic human resource management, human resource planning becomes more specific. It focuses on the following action plans:
- Recruitment Strategies: HRP ensures whether to promote the existing manpower to a higher position or hire a fresh resource for the vacant position.
- Restructuring Strategies: When it comes to the surplus workforce, company restructuring becomes essential. It plans for employee attrition, termination or job redesign.
- Outsourcing Strategies: HRP saves the hefty infrastructure expenses by outsourcing the task that requires specialization, to the external firms or individuals.
- Training and Development Strategies: HRP enhances personnel skills and learning through systematic training and development programmes for the employees.
- Collaboration Strategies: Every organization works actively in an external setup. Thus HRP helps the company to avail the collaboration opportunities with the other business entities to prosper.
Problems in Human Resource Planning
Many times, the hr team faces various hurdles in human resource planning. Some of the known issues with HRP are discussed below:
- Lack of Sufficient Data: When there is limited information, human resource planning may not provide the desired results to the company.
- Inaccuracy: Since human resource planning is a futuristic approach, it is based on predictions which create unreliability.
- Costly and Time-Consuming: HRP is a task performed by a specialized team which is extremely expensive. Also, HRP is a lengthy process.
- Uncertainty: Labour related uncertainties such as turnover, absenteeism, unemployment, etc, affects the authenticity of the HRP.
- Lack of Efforts: The human resource team sometimes take HRP as a burdensome task and shows minimal interest in accomplishing it efficiently.
- Employer or Labour Union Resistance: The employers usually avoid HRP practice fearing hefty expenses. Even the labour unions protest against HRP since it overburdens employees.
The Tata Group values its employees as assets, Tata Consultancy Services (TCS) offered Employee Stock Options (ESOP) to retain staff and their loyalty.
But when the other companies started adopting the same hr practice, the company started losing its manpower.
To deal with this situation, human resource planning was taken into consideration. The management then focused more on employee skill set and constant training. Also, the seniors kept a complete track of their subordinates’ performance and projects.
This helped to systematically place the required number of personnel on a project while the excess manpower is assigned on other projects. All this was based on the human resource gap analysis to regularly check over the deficit or surplus of manpower.