Process of Human Resource Planning

Analyzing the Corporate Level Strategies:

Human Resource Planning would start with analyzing corporate level strategies which include expansion, diversification, mergers, acquisitions, technology to be used, reduction in operations, and method of production etc. Therefore, Human Resource Planning would begin with analyzing the corporate plans of the organization before setting out on fulfilling its tasks.

Demand forecasting:

Forecasting the overall human resource requirement in accordance with the organizational plans is one of the key features of demand forecasting. Predicting of quality of human resources like skills, knowledge, values and capabilities needed in addition to quantity of human resources is done through the following methods:

Managerial or Executive Judgment:

Here the managers decide the number of employees in the future. They adopt one of the three approaches stated below:

Bottom-Up approach:

Here the concerned supervisors refer their proposals to the top officials who compare these with the organizational plans, make essential adjustments and finalize them. 

Top-Down approach:

Here the management prepares the requirements and sends the information downwards to the supervisory level who confirms the draft and approves it. 

Participative Approach:

Here the management and the supervisors sit together and projections are made after joint consultations.  

The main drawback of these methods is that estimation of manpower is made using guesswork. 

Statistical Techniques:

These procedures use statistical methods and mathematical methods to forecast and predict the supply and demand of Human Resources in the future.

Ratio-Trend analysis:

In this technique depending on the past data regarding number of employees in each department, like sales department, production department, marketing department and workload level, etc. ratios for manpower are estimated. Past values are plotted and extrapolated to get fairly accurate future projections. 

Work Study method:

This method is suitable to study the correlation between volume of work and labor i.e. demand for human resources is estimated based on the workload. Work study technique is more appropriate for repetitive and manual jobs when it is possible to measure work and set standards.

Delphi Technique:

Delphi Technique is named after the Greek Oracle at the city of Delphi. In this technique, the views of different professionals related to the industry are taken into consideration and then a consensus about the Human Resource requirement is arrived at. Delphi method is used primarily to measure long-term needs of human resource.

Analyzing Human Resource Supply:

Every organization has two sources of supply of Human Resources: Internal & External. Internally, human resources can be obtained for certain posts through transfers and promotions. To judge the internal supply of human resources in future human resource inventory or human resource audit is essential. Human resource inventory helps in determining and evaluating the quantity of internal human resources available. Once the future internal supply is estimated, supply of external human resources is analyzed.

Estimating manpower gaps:

Manpower gaps can be recognized by comparing demand and supply forecasts. Such comparison will reveal either surplus or deficit of Human Resources in the future. Deficit suggests the number of persons to be recruited from outside, whereas surplus implies redundant employees to be re-deployed or terminated. Employees estimated to be deficient can be trained while employees with higher, better skills may be given more enriched jobs.

Action Planning:

Once the manpower gaps are recognized, plans are prepared to bridge these gaps. Plans to meet the surplus manpower may be redeployment in other departments and retrenchment. People may be persuaded to leave voluntarily through a golden handshake. Deficit can be met through recruitment, selection, transfer and promotion. In view of shortage of certain skilled employees, the organization must take care of recruitment and retention of existing employees as well. Hence, the organization must plan for retaining of existing employees.

Modify the Organizational plans:

If future supply of human resources form all the external sources is estimated to be inadequate or less than the requirement, the manpower planner must suggest to the management regarding the alterations or modifications in the organizational plans.

Controlling and Review:

After the action plans are implemented, human resource structure and the processes should be controlled and reviewed with a view to keep them in accordance with action plans.