Chapter-2: Human Resource Planning (HRP)

Chapter-2: Human Resource Planning(HRP)
Meaning of HRP
Planning is the most important and primary function
of management. It is a process of selecting the
organizational objectives and taking action to achieve
those objectives. Planning must be realistic and
workable. Planning of human resources is a major
managerial responsibility. It is important because
human resources provide a firm the competitive
advantage. In the age of competition, firms are
focusing their attention on employee knowledge and
skill.
Meaning of HRP (continued)
Human resource planning is the major task of

HRM because it is concerned with utilizing
manpower resources. An organization does not
own person as it does capital and physical
assets; this resource is seldom given proper
attention. Many managers gave failed because
they have taken their human resources for
granted. It is one of the most critical
management undertakings of this decade.
What is meant by HRP?
Human resource planning is a process that

identifies current and future human resource
needs for an organization to achieve its goals.
Human resource planning should serve as a link
between human resource management and the
overall strategic plan of an organization.
Scholar’s Definitions
Robbins(1998) defines HRP as “ the process by which
an organization ensures that it has the right number
and kinds of people at the right places, at the right
time, capable of effectively and efficiently completing
those tasks that will help the organization achieve its
overall objectives”.
In the words of Coleman Bruce (1997), HRP is the

process of determining manpower requirements and
the means of meeting those requirements in order to
carry out the integrated plan of the organization.
Sum up of definition
It, then, translates the organization’s objectives and
plans into the number of people needed to meet those
activities. Through planning management makes a
balance between demand for and supply of right
number and kinds of people at the right time. It is a
supply and demand calculation. Manpower is an asset,
it is an asset which appreciates-which grows over time.
Machines depreciate as time goes on.
Element consists of HRP
• Establishing and recognizing the future job
requirements,
• Identifying deficiency in terms of quantity,
• Identifying deficiency in terms of quality and
specification,
• Identifying the sources of right type of man,
• Developing the available manpower and
• Ensuring the effective utilization of work force.
Benefits of Human resource planning
• Upper management has a better view of the
human resource dimensions of business
decisions.
• HR costs may be lower because management
can anticipate imbalances before they become
unmanageable and expensive.
• More time is available to locate talent because
needs are anticipated and identified before
the actual staffing is required.
• Development of managers can be better developed.
• Improving the utilization of human resources,
• Achieving economies in hiring new employees,
• Expanding the personnel management information
base to assist other personnel activities and other
organizational units,
• Coordinating different personnel program.
• Rapid technological changes makes manpower
planning more important as the demand for new skills
is increasing.
• Proper manpower policy will reduce wastage
rate. There are two types of wastage- voluntary
(marriage, pregnancy, immigration, early
retirement and involuntary (death, retirement
and dismissal).
• Manpower planning stresses the value of human
resources as corporate assets.
• Interest in manpower planning is increasing
because the size of the organization is gradually
increasing.
Human resources planning methods
Four methods are used to determine the
requirements of personnel:
1. Annual estimate of expected vacancies,
2. Long range estimate of expected vacancies,
3. Man specification requirements,
4. Job requirements.
HR forecasting
• HR forecasting constitutes the heart of the HR
planning process.
• It ascertains the net requirement for
personnel by determining the demand for and
supply of human resources now and in the
future.
Forecasting Activity Categories
1. Transactional-based forecasting - focuses on
tracking internal change instituted by the
organization's managers
2. Event-based forecasting - concerned with
changes in the external environment
3. Process-based forecasting - not focused on a
specific internal organization event, but on
the flow or sequencing of several work
activities.
Benefits of HR Forecasting
• Reduces HR costs
• Increases organizational flexibility
• Ensures a close linkage to the macro business
forecasting process
• Ensures that organizational requirements take
precedence over issues of resource constraint
and scarcity.
Different stages of HR forecasting
• Identify organizational goals, objectives, and
plans
• Determine overall demand requirements for
personnel
• Assess-in-house skills and other internal
supply characteristics
• Determine the net demand requirements
• Develop HR plans and programs to ensure that
right people are in the right place
HR Demand and Supply
• Human Resources Supply - the source of
workers to meet demand requirements,
obtained either internally (current members
of the organization’s workforce) or from
external agencies
• Human Resources Demand - the
organization’s projected requirement for
human resources
Determining net HR requirements
1. Determine HR demand:
– Sub-units have to submit net personnel
requirements to the corporate forecasting unit
– Planned future changes in organizational design or
in restructuring
– How to replace non productive paid time
– Conducting cost estimate
2. . Ascertain HR Supply
− Internal supply (Work force who can be retrained,
promoted, transferred etc)
− External supply (University students, working for
competitors, members of professional
organizations, people who are in transitional
stage)
3. Determining net HR requirements
 HR demand= external supply+ internal supply
 HR demand- internal supply= external supply
 External supply requirements= replacement supply +
change supply component
 Replacement supply= hiring to replace all normal losses
 Change supply= hiring to increase or decrease the overall
staffing level
Institute HR programs: HR deficit and HR
surplus
HR deficit= HR demand is greater than HR internal
supply
HR surplus= HR demand is less than HR internal
supply
Dealing with HR surplus
– Job sharing
– Attrition
– Hiring freeze
Meaning of internal and external supply
• Internal Supply - current members of the

organizational workforce who can be retrained,
promoted, transferred, to fill anticipated future
HR requirements
• External Supply - potential employees who are
currently undergoing training, working for
competitors, members of unions or professional
associations, or are in a transitional stage,
between jobs or unemployed
Concepts of HR Deficit, HR surplus, and Hiring
Freeze
• HR Deficit: occurs when demand for HR
exceeds the current personnel resources
available in the organization's workforce (HR
internal supply)
• HR surplus - occurs when the internal
workforce supply exceeds the organization’s
requirement or demand for personnel
• Hiring Freeze - a prohibition on all external
recruiting activities

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Chapter-2: Human Resource Planning(HRP)

Human resource planning is the major task of

Human resource planning is a process that

In the words of Coleman Bruce (1997), HRP is the

• Internal Supply - current members of the

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