Unit 3 Human Resource Planning

Structure:
3.1 Introduction

Objectives
3.2 Human Resource Planning
3.3 Need for Human Resource Planning
3.4 Process of Human Resource Planning
3.5 Human Resource Planning System
3.6 Successful Human Resource Planning
3.7 Summary
3.8 Caselet
3.9 Terminal Questions
3.10 Answers

3.1 Introduction
Planning is considered as the first step for task performance. Whenever
there is some work that needs to be done, at home or at work, the first thing
you do is to plan out. For example if you want to build a custom-fit cupboard
for a available space in your bedroom you would seek recommendations
from your friends for good carpenters in the neighbourhood, evaluate them
per your requirements, agree on time and cost and assign the task to them.
Similar is the role of the Human Resource Planning activity in the human
resources function. It is the first, most important and crucial step in building
and growing an organization.
Through human resource planning, the management strives to have the
right number and the right kinds of people at the right places, at the right
time, to do things which result in both the organization and the individual
receiving the maximum long-range benefit. Human resource Planning (HRP)
constitutes the significant first step in planning for the human resources
requirements of the firm. It is an extremely important step and is closely
linked to the business plan of the organizations. Organization in different
stages of their life cycle will have a different HRPlan. This unit throws light
on the process of recruitment.
Objectives:
After studying this unit, you will be able to:
. Explain Human Resources Planning
. Describe the HRP process
. Evaluate the usefulness of HRP

3.2 Human Resource Planning

Human resource or manpower planning is 'the process by which a
management determines how an organization should move from its current
manpower position to its desired manpower position. Through planning, a
management strives to have the right number and the right kind of people at
the right places, at the right time, to do things which result in both the
organization and the individual receiving the maximum long-range benefit".
The organization s business plan to invest in a particular product/market or a
service will drive the HRP activity towards hiring to meet the business need.
In the event an organization is divesting or shutting down a particular
business unit or a manufacturing division the HRP activities would focus on
the redeployment of the workforce that will be rendered unemployed as a
result of the business decision. An organization wanting to retain its current
market share and revenue projection at status quo would be supported by
HRP activities that are limited to only filling positions falling vacant due to
natural organizational attrition. Hence the HRP focus in a organizations is
closely linked to the business plan and acts as a bridge between what an
organization wishes to achieve and how it will go about achieving it w.r.t. the
human resources requirements.
The scope of HRP is futuristic in nature and usually runs parallel to the
annual business planning exercise. It commences prior to the start of the
company s new financial year. For example if the business year for a
company runs April to March. The business planning and the HR planning
activities for the New Year beginning in April is usually completed and in
place by the 1st week of April. Once the HR plan is in place it is broken up
into a quarterly or even a monthly plan which then is the input for the
recruitment team to go and hire accordingly.
Steps in Human Resource Planning:
The Human Resource Planning process consists of a set of activities, viz.
a) Forecasting manpower requirements, either by using mathematical tools
to project trends in the economic environment and development in
industry, or in by using simple judgemental estimates based on the
specific future business plans of the company;
b) Creating an inventory of present manpower resources and assessing
the extent to which these resources are employed/ optimally;
c) Identifying manpower problems by projecting present resources into the
future to determine their adequacy, both quantitatively and qualitatively;
and
d) Planning the necessary programmes of requirement selection, training,
development, utilization, transfer, promotion, motivation and
compensation to ensure that future manpower requirements are properly
met.

Thus, it will be noted that 'manpower planning consists in projecting future

manpower requirements and developing manpower plans for the
implementation of the projections'.
Activity 1
A company is being set up by a group of 3 professionals. The business
objective is to sell mobile phones of a Chinese company which has come
up with an inexpensive range of handset ranging from Rs.1200 to
Rs.7000. The plan of the founders is to sell it through dealership with
leading mobile sales stores in the city. They need to submit a human
resource plan for the next 18months to their investors. List down all the
important steps of HR planning for this company.

Self Assessment Questions

1. Through planning, a management strives to have the right number and
the right kind of people at the right places, at the right time, to do things
which result in both the ______________________________ receiving
the maximum long-range.
2. Anticipating manpower problems by projecting present resources into
the future and comparing them with the forecast of requirements to
determine their adequacy, both ________________________________.
3. Manpower planning consists in _____________________________ and
developing manpower plans for the implementation of the projections'

3.3 Need for Human Resource Planning

Human Resource Planning is a mandatory part of every organization s
annual planning process. Every organization that plans for its business
goals for the year also plans for how it will go about achieving them, and
therein the planning for the human resource:
1. To carry on its work, each organization needs competent staff with the
necessary qualifications, skills, knowledge, work experience and
aptitude for work.
2. Since employees exit and organization both naturally (as a result of
superannuation) and unnaturally (as a result of resignation), there is an
on-going need for hiring replacement staff to augment employee exit.
Otherwise, work would be impacted.
3. In order to meet the need for more employees due to organizational
growth and expansion, this in turn calls for larger quantities of the same
goods and services as well as new goods. This growth could be rapid or
gradual depending on the nature of the business, its competitors, its
position in the market and the general economy.
4. Often organizations might need to replace the nature of the present
workforce as a result of its changing needs, therefore the need to hire
new set of employees. To meet the challenge of the changed needs of
technology / product/service innovation the existing employees need to
be trained or new skill sets induced into the organization.
5. Manpower planning is also needed in order to identify an organizations
need to reduce its workforce. In situations where the organization is
faced with severe revenue and growth limitations it might need to plan
well to manage how it will reduce its workforce. Options such as
redeployment and outplacement can be planned for and executed
properly.
Self Assessment Questions
4. Human Resource Planning is essential because of frequent
_______________ which is unavoidable and even beneficial
5. Manpower Planning is required in order to meet the needs of expansion
programmes which become necessary because of increase in the
demand for goods and services _____________________, a rising
standard of living
6. Manpower planning is also needed in order to identify areas of
____________ personnel or areas in which there is a __________ of
personnel.

3.4 Process of Human Resource Planning

The process of Human Resource Planning is one of the most crucial,
complex and continuing managerial functions which, according to the Tata
Electrical Locomotive Company, "embraces organization development,
management development, career planning and succession planning".
It may be rightly regarded as a multi-step process, including various issues,
such as:
1. Deciding goals or objectives;
2. Estimating future organisational structure and manpower requirements;
3. Auditing Human resources both internally and externally
4. Planning job requirements and job descriptions/person specifications;
and
5. Building a plan

Human Resource Planning is not only done by organizations and corporate

bodies. It is a prevalent practice at different levels:
i) At the country s national level, it is generally done by the Government
and covers items like population projections, programme for economic
development, basic and advanced educational infrastructure and
opportunities, occupational distribution across urban and rural areas,
industrial and geographical mobility of employable people.
ii) At the state level, it may be done by the state government and would
include manpower planning for the needs of the agricultural, industrial
and service sector.
iii) At the specific industry level, it would include manpower needs forecast
for specific industries, such as engineering, heavy industries, consumer
goods industries, public utility industries, etc.
iv) At the level of the individual organization/ unit, it would relate to the
planning of manpower needs for each department and for various types
of personnel.

Self Assessment Questions

Match the following
7. It is generally done by the Government a) At the industry level,
and covers items like population projections,
programme of economic development,
educational facilities, occupational distribution,
and growth, industrial and geographical
mobility of personnel.
8. It may be done by the Government - b) At the sector level
Central or State - and may cover
manpower needs of agricultural,
industrial and service sector.
9. It may cover manpower forecast for c) At the level of the
specific industries, such as engineering, individual unit
heavy industries, consumer goods industries,
public utility industries, etc.
10. It may relate to its manpower needs for d) At the national level
various departments and for various
types of personnel.

3.5 Human Resource Planning System

The steps in the HRP process is a systematic set of activities carried out in
a chronological manner. Each step needs to be evaluated and debated with
all possible information gathered from the external as well as internal
environment. Table 3.1 highlights the steps in the process.
Identifying the
purpose for Human
Resource Planning

Estimating/Forecasting
the future Manpower
Requirements

Auditing Human
Resources

Job Analysis

Developing a Human
Resource Plan

Figure 3.1: Human Resource Planning System

We will attempt to discuss in details the critical steps that are part of the
above system.
A. Purpose of Human Resource Planning: Human Resource Planning fulfils
individual as well as organizational goals. What it essentially amounts to
is striking a balance between the future human resources needs and
the future enterprise needs. And this is done with the clear objective of
maximizing the future return on investment in human resources. And this
objective may be laid down for a short-term (i.e. for one year).
B. Estimating/Forecasting the future Manpower Requirements: the first step
in the process is to arrive at the desired organizational structure at a
given point in time. Mapping this structure with the existing structure
helps in identifying the gap in resources requirement. The number and
type of employees needed have to be determined. In addition to the
structure there are a number of external factors that affect this
determination. They include business forecasts, competitor strategy,
expansion plans, product/skills mix changes, profit/revenue growth
projections, in addition to management philosophy and government
policies. This step also includes an analysis of the external labour/talent
environment, its demographics, demand/supply of the required talent,
and cost considerations.

Forecasting provides the basic premises on which manpower planning is

done. Forecasting is necessary for various reasons, such as:
a) The challenges of the general economic business cycles have an
influence on the short-range and long-run plans of all organizations.
These are inflation, wages, prices, costs and raw material supplies.
b) An expansion / growth initiative might need the business to use
additional machinery and personnel, and a re-allocation of facilities,
all of which call for adequate advance planning of human resources.
c) Changes in management philosophies and top management
leadership styles.
d) The use of new technology (such as the introduction of automatic
controls, or the mechanization of materials handling functions)
requiring a change in the skills of workers, as well as a change in the
number of employees needed.
e) Very often, changes in the quantity or quality of products or services
require a change in the organization structure. Plans have to be
made for this purpose as well.

C. Auditing Human Resources: Once the future human resource needs are
estimated, the next step is to determine the present supply of manpower
resources. This is done through what is called "Skills Inventory". A skills
inventory contains data about each employee's skills, abilities, work
preferences and other items of information which indicate his worth to
the company. Skills inventory are also referred to as competency
dictionaries. This information is usually retained as part of the
performance management system with the HR department. This step in
the HRP system helps identify the existing profile of the manpower and
its efficiency. It helps highlight where the organization is vs. where it
ought to be. The step concludes with identifying clear gaps in the skills /
manpower mix required to meet the upcoming business objectives.
D. Job Analysis: After having decided how many persons would be needed,
it is necessary to prepare a job analysis. The recorded details of training,
skills, qualification, abilities, experience and responsibilities, etc. as
needed for a job are studied. Job analysis includes the preparation of
job descriptions and job specifications.
E. Developing a Human Resource Plan: This step refers to the
development and implementation of the human resource plan, which
consists in finding out the sources of labour supply with a view to making
an effective use of these sources. Some important considerations at this
point are:
F.

. Specific roles/disciplines being hired for, of them which roles are

pivotal for the business
. Competencies and capabilities needed
. Manager vs. employee hiring
. Hire internally vs. External sourcing
. Planning for new skills through training existing staff vs. hiring new
teams
. In case of surpluses, planning for redeployment / reduction in
workforce as required
. Succession planning for key positions in the company

ACTIVITY 2
In Activity 1, List down few external factors which in your opinion might
influence companies hiring strategies. What should they do at the hiring
stage to prevent early attrition?

Self Assessment Questions

11. _________________ provides the basic premises on which the
manpower planning is built.
12. An expansion following enlargement and growth in business involves
the use of additional machinery and personnel, and a re-allocation of
facilities, all of which call for ______________ of human resources.
13. A _________________ contains data about each employee's skills,
abilities, work preferences and other items of information which indicate
his overall value to the company.
3.6 Successful Human Resource Planning
The responsibilities of the HR Department with respect to manpower
planning can be summarised as:
i) To establish HRP as a integral part of the corporate planning activities.
Therefore ensure that they are aware of the company s corporate and
business objectives.
ii) Ensure that the top management supports and recognizes the
importance of the HRP process and drives the senior leaders to
participate in it and abide by it.
iii) Set aside funds to provide for technological requirements and other
supporting costs such as the creation and maintenance of the skills
inventory, training initiatives etc.
iv) Data collection and analysis to be chosen as best suited to the industry
and the economic environment as well as the organizations own plans.
v) Hold the HR department responsible for coordinating the HRP process
and tracking progress with continuous review.
vi) Review the HRP process year on year to identify if there are any
changes to be made to the HRP process itself to make it relevant and
useful towards achieving the business goals.

It is not uncommon for there to be resistance to the HRP function. Some

common barriers are, (1) the need to frequently change staffing plans
depending on the market situation, (2) does HR have sufficient knowledge
about the business and its objectives to lead the HRP initiative to
successfully contribute to the achievement of business results, (3) financial
forecasting tends to take precedence over HRP as it impacts the
organizations profits/losses, (4) balancing long term vs. short term needs of
the business often what HR might recommend might go contrary to
achieving immediate business results and vice versa, (5) the role of
statistical quantitative information verse qualitative intuitive information
each has its role to play in the HRP process and this usually is a widely
debatable aspect on the projection for human resources requirements, and
(6) soliciting the support of all the business managers and leaders to
contribute to the planning process by providing all the necessary information
and actively participating in the HRP process this also ensures that the
managers remain committed to the human resource plan through the year.
Self Assessment Questions
The responsibility for sound HRP is...
14. To _________________________the operating management to plan
and establish objectives;
15. To __________________________in total organizational terms and
to ensure consistency with long-range objectives and other elements
of the total business-plan;
16. To ___________________________against the plan and keep the
top management informed about it; and
17. To ____________________________for effective manpower and
organizational planning.

3.7 Summary
. Through planning, a management strives to have the right number and
the right kinds of people at the right places, at the right time, to do things
which result in both the organization and the individual receiving the
maximum long-range benefit.
. Manpower planning consists in projecting future manpower
requirements and developing manpower plans for the implementation of
the projections.
. To carry on its work, each organization needs personnel with the
necessary qualifications, skills, knowledge, work experience and
aptitude for work.
. Human Resource Planning is essential because of frequent labour
turnover.
. Manpower planning is also needed in order to identify areas of surplus
personnel or areas in which there is a shortage of personnel.
. The process of Human Resource Planning embraces organization
development, management development, career planning and
succession planning".
3.8 Caselet

Workers should highlight their value to employers

By Sol E. Solomon

SINGAPORE Being the quiet achiever can sometimes work against

employees in the workplace, where workers are judged by their
achievements and successes, according to a local-based recruitment
expert.
Karin Clarke, general manager of Select Business Services, noted in a
recent press statement how "very innate" it is in the Singaporean culture for
employees to be modest and reserved, preferring not to draw attention to
their accomplishments for fear of being seen as arrogant and pretentious.
According to Richard Talbot, general manager of recruitment company
Sapphire Technologies Singapore, this trait cuts across all professions
including the IT sector, in the island-state.
"We find one of the key reasons IT candidates look to change jobs is that
they know they can achieve higher remuneration elsewhere, and their
employer has not been forthcoming with a suitable increment," said Talbot in
an e-mail interview.
However, he noted that IT professionals need to also understand how to
best present their achievements to their current employer, in order to secure
that promotion or pay increment they have been eyeing.
Tho Lye Sam, human resource director at IBM Singapore, said in the past,
technical individuals ranging from engineers to programmers, appeared to
be less superior in their interpersonal or written skills compared to their
business or sales peers.
"But we're definitely seeing less of this today," Tho said in an e-mail
interview.
Increasingly, she said, employers are witnessing a new breed of
employees who bring a mix of business, technical and people skills.
Tho added: "These knowledge workers will fuel the 21st century economy,
and are definitely capable of presenting the best of their capabilities and
competence with the aim of sharing best practices, as opposed to being
outright showy for personal glory."
Clarke said current global economic pressures make it particularly important
now for workers in Singapore to make their value known in the workplace.
This way, they can ensure they are recognized fairly and reap the rewards
of doing their job well, she said.
"It is important that employees realize it may be time to work even harder
and then communicate this success to the right people. Don't be shy to let
relevant colleagues and managers know about what you have achieved,"
she added.
Boast the right way
But while employees should draw attention to their achievements, they
should not do so blatantly.
"Some simple, subtle steps can be taken to make sure you receive the
recognition you deserve," Clarke said. "It will make for a more positive work
environment and will contribute to job security, career progression and show
you are willing to take responsibility and ownership for your work."
"It could be as simple as copying in your manager on positive feedback from
customers, or communicating the successful completion of a project or task.
While it is not imperative to tell your peers unless you want to, making sure
you tell the decision makers in your organization is essential," she said.
Tho said IBM encourages the sharing of best practices, and this involves
putting the limelight on an individual, a team, a country or even a region.
"These are 'official broadcast' platforms to share an individual or a team's
winning ways to the larger IBM community," she explained. "In addition, by
celebrating performance and leadership excellence, we are able to
encourage more of such desired behavior."
Talbot suggests employees who fear publicizing their achievements could
work against them, consider taking a "reasoned approach".
"Of course, an employee who constantly talks about personal achievements
all the time can be an annoyance, but conversely, employees that never
highlight what they have achieved are easy to forget," he noted.
The individual should also recognize when to highlight an achievement to
the manager, and when not to raise the issue. Talbot said: "An annual
review would be a good time, for example, to highlight achievements."
IBM's Tho said: "Our employees are well aware that overstatements may
look good in the short term, but are not sustainable in the longer term."
Clarke recommended that workers keep a record of their achievements, so
they have documentation to support their case when it is time for salary
negotiation or formal reviews. "It can be one of the most difficult
conversations of your career, but discussing money with your employer is
much easier if you can clearly demonstrate that your work has contributed to
the success of your organization," she said.
Sources : ZDNet Asia, Thursday, October 02

3.9 Terminal Questions

1. Define Man Power Planning. Discuss the need for Man Power Planning
2. Describe the process of Human Resource Planning.
3. What are the various sources of recruitment?

3.10 Answers
Answers to Self Assessment Questions
1. Organization and the individual,
2. Quantitatively and qualitatively,
3. Projecting future manpower requirements.
4. Labour turnover,
5. By a growing population,
6. Surplus, shortage.
7. d,
8. b,
9. a,
10. c.
11. Forecasting,
12. Advance planning,
13. Skills inventory.
14. Assist, counsel and pressurise,
15. Collect and summarise data,
16. Monitor and measure performance,
17. Provide the research necessary

Answers to Terminal Questions

1. Refer to 2.1 & 2.2
2. Refer to 2.3
3. Refer to 2.9

References:
1. Human Resources Management by Fisher, Schoenfeldt and Shaw