MBMI 13 HRM

HR PLANNING
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MEANING The goal of HR is to put the right people in the right

positions to meet the organisational objectives.
OF HRP
HRP is the process of estimating the human
resource requirement of the organisation for the
present as well as future and determining the
course of action for meeting such requirements.

HRP is an ongoing activity with a continuous

assessment of the needs of the organisation.
HR PLANNING MBMI 13 HRM

Effective HRP ensures that the organisation is

sufficient in terms of people’s number and quality.
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HRP is proactive and assess the needs at
SIGNIFICANCE different stages of organisation’s life cycle
OF HRP and in alignment with the strategies.

Quality of HR in the organisation largely

depends on the success of HRP which is
the first step.

Important to cope with the changes

associated with the external environment
HR PLANNING MBMI 13 HRM

Ensures recruitment of competent people

by analysing the current HR inventory
levels.
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PROCESS OF HRP

Understanding
Assess the
Environmental the business
Current
Scanning goals and
Workforce
strategies

Identify HR gaps
Review and
and forecast Formulate plans
Evaluate
demand
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CONTD.
 Environmental Scanning involves analysing macro environment
which could affect HR decisions.

 The general economic conditions, unemployment , demand and

supply of labour, legislative changes at the economical level

 Trends in the industry, technological advancements, challenges

of attracting and retaining talent, competitors’ policies and
position

 Strength and weaknesses of the firm, general working

HR PLANNING MBMI 13 HRM

conditions, pay structures, quality of work-life, employee

satisfaction.
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Understanding the mission and values of the organisation is imperative.

Knowledge of the organisation’s life cycle. Different strategies are

required at different phases.

Assessing the competency of current workforce capacity. KSAs of all

employees identified by developing skill inventory

Provides data to reveal workforce gaps based on the strategic choices of

HR PLANNING MBMI 13 HRM

the business
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 Gap analysis leads to understanding the gaps between workforce

demand and supply and helps in prioritising the gaps which has the
greatest impact on business performance.

 It provides information on
 The skill/competency gap
 Gaps with respect to a specific job or geographical area
 Diversity gaps
 Gaps created by changes in the internal structure like retirement or
HR PLANNING MBMI 13 HRM

termination of employees.
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FORECASTING  Forecasting involves estimating the future

number of people required and the likely skills

TECHNIQUES and competencies they will need.

 Includes:

 Qualitative Techniques

 Quantitative Techiques
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QUALITATIVE TECHNIQUES

 Managerial Judgements: Managers discuss on the

workloads and decide the people requirement.

 Could be bottoms-up approach where the line managers

send their requirements for approval or top-down approach
where top management initiates the forecasting process
and seek concurrence from other levels.

 Expert Judgement or Delphi Method: Forecasting done by a

group of experts based on the collated reports.
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QUANTITATIVE Ratio Trend Analysis: Uses past ratios where

METHODS a relationship is established between people
requirement and another business variable.

Different metrics which can be used

including sales revenue, cost per hire,
attrition rate and others.

Regression Analysis: Predicts the dependent

variable based on certain independent
variable/variables.

Workload Analysis: Based on the workload

HR PLANNING MBMI 13 HRM

calculation and the continuity of operations

number of workers are calculated.
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SUPPLY FORECASTING

 Measures the number of people likely to be available from within

and outside the organisation after adjusting for attrition, internal
movements and promotions and changes in hours and conditions of
work.

 Inventory based on job family, skill set, experience, values,

capabilities, gender, age, salary grades etc.
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 The analysis of demand and supply forecasts

results in make or buy policy decisions based
on the organisational context.

 Make Policy: Recruit people at junior levels and

MAKE OR rely on promotion from within and training
BUY programs to meet future demands.

DECISIONS  Buy Policy: External recruitment

 Combination of choices depending upon

situation and type of people involved.
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https://cardinalatwork.stanford.edu/enga
ge/news/four-steps-workforce-planning
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