Human Resource Planning (HRP)

What is Human Resource Planning?

Human resource planning defines how many people the organization wants; the type of people the organization needs at present and in the future, regarding their expertise; and how they “fit” the corporate culture.

Or you can say, human resource planning is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements.

It involves the forecasting of both the supply and demand for future labor. It provides the base for recruitment programs and for human resource development plans.

Definition of Human Resource Planning

Some definition of human resource planning are given below:

Human resource planning is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements

Bulla and Scott

A process in which an organization attempts to estimate the demand for labour and evaluate the size, nature and sources of supply which will be required to meet the demand.


Functions of Human Resource Planning

Functions of human resource planning are discussed below:

Assuring Sufficient Staff

A primary function of human resources planning is ensuring various company departments have sufficient staff to complete all the work required to meet the organization’s goals.

Matching Skills to Current Organizational Needs

The management team must supervise additional employees. Addressing these changing needs requires the business owner to determine if the current management team has the necessary experience and skills to succeed in a larger, more structured, more complex organization. If he identifies gaps, he creates new positions and hires new people.

Building an Ethical Business Culture

A business owner often creates a code of conduct for employees to follow which defines what is considered ethical -good- conduct in dealing with customers, suppliers, and co-workers.

The aim of building an ethical culture can be furthered by bringing on new hires who have a track record of high ethical behavior which may require a more in-depth interviewing process in which the hiring manager asks candidates how they have dealt with ethical dilemmas in the job.

Identifying Employees Ready for Advancement

Human resource planning should include creating a path for advancement for each employee. The business owner must assess which employees are ready to move up in the organization and which might need more seasoning in their current positions.

Importance of Human Resource Planning

The followings are the importance of human resource planning:

Defining Future Personnel Needs

The rapid changes in technology, marketing, management, etc., and the consequent need for new skills and new categories of employees.

Optimum Utilization of Manpower

With the help of manpower planning, there is optimum utilization of the labor force in the organization. Workers are given those jobs to perform for which they are skilled.

Identification of Gaps in Existing Manpower

Human resource planning identifies gaps in existing manpower in terms of their quantity and quality with the help of suitable training and or any other steps these gaps can be filled in time.

Improvement in Overall Business Planning

Human resource planning is an integral part of overall business planning. Effective manpower planning will lead to improvement in overall planning also.

Career and Succession Planning

Human resource planning facilitates career and succession planning in the organization it provides enough lead time for the internal succession of employees to higher positions through promotions

Creating Awareness in Organization

Human resource planning leads to a great awareness of the effectiveness of sound manpower management throughout the organization. It also helps in judging the effectiveness of human resource policies and programs of management.

Process of Human Resource Planning

We have discussed the steps in the process of human resource planning:

Human Resource Assessment

THE HR manager begins by conducting an external and internal environmental analysis to find out the existing supply of human resources along with the available pool of knowledge skills and abilities at its disposal.

Demand Forecasting

The next logical step for the HR manager is to predict the future requirements of the organization in terms of the quantity and quality of human resources to help the organization achieve the desired levels of production .here it becomes imperative to know the future plans and strategies of expansion growth diversification, etc in the local markets or international markets.

Supply Forecasting

Apart from demand forecasting, it is important to assess the current manpower supply within the organization. When the organization wants to fill the positions from within it may resort to promotions transfers job enlargement and job enrichment, which will entail the benefits of increased morale motivation, and confidence of the employees.

Plus it also fulfills the condition of doing adequate career planning for the employees. In case nobody fits the bill from the inside, the organization may look out for the right fit for the job.

Matching Demand and Supply

Now it is time to try to strike a tradeoff between the supply and demand of human resources at its disposal which is absolutely necessary to plug the gaps and also to make sure that the organization is not overstaffed at any point in time.

Action Plan

The last leg of human resource planning encompasses allotting the HR functions and duties. Now it is time to start the recruitment process by external or internal sources, selecting the right candidate, inducting and giving him orientation, imparting training and development to the employees, and conducting a performance appraisal.

It aims at ensuring that the planning matches the HR objectives and policies. There are all the chances of the action plan being reviewed in terms of changing

Levels of Human Resource Planning

Human resource planning is applicable at all levels. We have discussed the level of HRP given below:

National Level

Government at the center level plans for human resources at the national level. It forecasts the demand for and supply of human resources, for the entire nation.

Sectoral Level

Human resource requirements for a particular sector like the agricultural sector, industrial sector, or tertiary sector are projected based on the government policy, projected output or operations, etc, and according to programs developed to harness HR.

Industry Level

Manpower needs of a particular industry like Steel, Textiles, chemicals, and Automobiles are predicted taking into account the output/operational level of that particular industry, and accordingly, skill dent programs are initiated to meet the specific needs.

Enterprise Level

This covers the manpower needs of a particular company or organization based on its business/corporate.

Factors Affecting Human Resource Planning

There are several factors affecting human resource planning. We broadly classify them as:

External Factors

Government policies: policies of the government like labor policy, industrial relations policy, policy towards reserving certain jobs for different communities and sons-of-the-soil, etc. affect the HRP.

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

Business environment: external business environmental factors influence the volume and mix of production and thereby the future demand for human resources.

Level of technology: level of technology determines the kind of human resources required.

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

Internal Factors

Company policies and strategies: company’s policies and strategies relating to expansion, diversification, alliance, etc. determine the human resource demand in terms of quality and quantity.

Human resource policies: human resource policies of the company regarding quality of the human resource, compensation level, quality of work-life, etc., influences the human resource plan.

Job analysis: Fundamentally, the human resource plan is based on job analysis. Job description and job specification determine the kind of employees required.

Time horizons: companies with a stable competitive environment can plan for the long run whereas firms with unstable competitive environments can plan for only the short-term range.

Trade unions: influence of trade unions regarding the number of working hours per week, recruitment sources, etc, affect the HRP.

FAQs Related to Human Resource Planning

What is HRP?

human resource planning is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements.

What are the steps in process of hrp?

5 Steps in Process of HRP
1. Human Resource Assessment
2. Demand Forecasting
3. Supply Forecasting
4. Matching Demand and Supply
5. Action Plan

What are the functions of human resource planning?

Functions of Human Resource Planning:
1. Assuring Sufficient Staff
2. Matching Skills to Current Organizational Needs
3. Building an Ethical Business Culture
4. Identifying Employees Ready for Advancement
5. Forecasting

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