HR Planning

MANAGING PEOPLE
Human
Resources Planning
MATHISHA HEWAVITHARANA
Managing Human Resources
MBA (Col),BBA Sp.Mktng (Col), PPG DIP. In Mktng (UK), MCIM (UK), Chartered Marketer
(UK), Practicing Marketer (SL), ACMA, CGMA CIMA (UK), DBF 14 (IBSL), AIB (IBSL),
th edition
Bohlander • Snell
MSLIM(SL),
Head of MarketingPowerPoint Presentation by Charlie Cook

- Siyapatha Finance
The University of West Alabama PLC
Chapter Contents
Summarized Chapter Contents:
1. Human Resource Planning (HRP).
2. HR Planning Vs Strategic Planning
3. Forecasting Demand for human Resource.
4. Forecasting Supply of Human Resource.
5. Identifying the Work Force Gap.
6. Strategies / Corrective Action
7. Advantages / Challenges of HRP

2–2
Chapter Contents

2–3
Human Resource Planning (HRP)
Definitions:
 The process that links the human resource needs of an organization to
its strategic plan to ensure that staffing is sufficient, qualified, and
competent enough to achieve the organization's objectives.
 The ongoing process of systematic planning to achieve optimum use

of an organization's most valuable asset - its human resources. The
objective of human resource (HR) planning is to ensure the best fit
between employees and jobs, while avoiding manpower shortages or
surpluses.
© 2007 Thomson/South-Western. All rights reserved. 2–4

Definitions:
 Human resource planning is the process of systematically forecasting
both the future demand for and supply of employees and the
deployment of their skills with respect to the strategic objectives of the
organization. Human resource planning is a process that identifies
current and future human resource needs for an organization, based
on the goals and objectives set by upper management.
 A Process in which , an organization attempts to estimate the demand

for labor and evaluate the size, nature & sources of supply which will
be required to meet the demand of the organization.
© 2007 Thomson/South-Western. All rights reserved. 2–5

HRP at Different levels:
 National level : managing Demand & Supply of
manpower at national Level as a Country.
 Sectional level : managing Demand & Supply of

manpower by focusing on specific economic
sections.
 Industry level : managing Demand & Supply of

manpower by concentrating on different
Industries.
 Unit level : managing Demand & Supply of

manpower at Organizational level.
 Departmental Level: managing Demand &

Supply of manpower at different departmental
level
 Job Level: managing Demand & Supply of

manpower at different Job Categories. 2–6
Chapter Contents

2–7
Strategic Planning Vs HR Planning:
Strategic planning is a step-by-step process of determining how
to pursue the organization's long-term goals with the resources
expected to be available.
It includes following key Activities;
 Setting Corporate Direction (Where Do We Want to Go?)
 Situational / Environment Analysis (Where Are We Now?)
 Strategy Formulation (How Can We Go There?)
 Strategy Evaluation & Selection (What is the Best Way?)
 Strategy Implementation (Moment of Truth)
 Monitoring & Controlling (Are We There?)

2–8
Strategic planning
2–9
Human resource planning is the estimation of future demand for and
supply of human resources for the accomplishment of stated
organizational goals. HR planning consists all the activities of human
resource management such as;
 Forecasting of Human Resource

 Collecting information
 policy making
 Recruitment
 Selection
 Training
 Development
 Motivation
 Performance Appraisals
 Rewarding & Recognition etc..
These activities help prepare HR plan of the organization.

. 2–10
2–11
Corporate Strategic
Plan & Human
Resource Plan depicts
a close relationship as
one cannot be
separated from
another.
They are correlated

with each other
because HR planning
is an integral part of
the overall corporate
plan.
2–12
steps/ Stages in HRP / Manpower Planning:
2–13
steps/ Stages in HRP / Manpower Planning:
1. Forecasting Demand for Human Resource.
2. Forecasting Supply of Human Resource
3. Comparison / Gap Analysis
4. Corrective Action / HRP Strategies
2–14
Chapter Contents

2–15
Forecasting Demand for Human Resource:
Quantitative Methods
Forecasting Demand
Qualitative Methods
2–16
Forecasting Demand for Human Resource depends on Number of Factors;
i. Employment Trend
ii. Replacement Needs
iii. Productivity
iv. Absenteeism
v. Expansion / Growth of operations
2–17
Number of techniques can be used in Forecasting Demand for Human
Resource;.
i. Managerial Judgment
ii. Work Study Techniques
iii. Trend / Ratio Analysis
iv. Delphi Method / Model
v. Other techniques
2–18
 Managerial Judgment
This technique involves two types of approaches namely;
'bottom-up approach' and 'top-down approach'.
‘Bottom-up approach'
Line mangers send their departmental requirement of human

resources to top management. Top management ultimately forecasts
the human resource requirement for the overall organization on the
basis of proposals of departmental heads.
‘Top-down approach'.
Top management forecasts the human resource requirement for the
entire organization and various departments. This information is
supplied to various departmental heads for their review and approval.
In Practice, Combination of Above will be used.
2–19
 Work Study techniques / Work – Load Analysis
Under this method, estimated total production and activities for a

specific future period are predicted. This information is translated into
number of man-hours required to produce per units taking into
consideration the capability of the workforce.
Past-experience of the management can help in translating the work-

loads into number of man-hours required. Thus, demand of human
resources is forecasted on the basis of estimated total production and
contribution of each employee in producing each unit items.
2–20
 Trend – Ratio Analysis
These models are based on mathematical and statistical techniques
for estimating future demand.
BUSINESS  LABOR = HUMAN RESOURCES
FACTOR PRODUCTIVITY DEMAND
YEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)
2000 $2,351 14.33 164

2001 $2,613 11.12 235
2002 $2,935 8.34 352
2003 $3,306 10.02 330
2004 $3,613 11.12 325
2005 $3,748 11.12 337
2006 $3,880 12.52 310
2007* $4,095 12.52 327 *Projected figures
2008* $4,283 12.52 342

2009* $4,446 12.52 355 2–21
 Delphi Model
This technique takes into consideration human resources
requirements given by a group of experts.
The human resource experts collect the manpower needs,

summarizes the various responses and prepare a report. This
process is continued until all experts agree on estimated human
resources requirement.
2–22
 Other Techniques
The other techniques of Human Resources demand forecasting are

specified as under:
(a) Following the techniques of demand forecasting of human

resources used by other similar organizations
(b) Organization-cum-succession-charts
(c) Estimation based on techniques of production
(d) Estimates based on historical records
(e) Statistical techniques e.g. co-relation and regression analysis.
2–23
Chapter Contents

2–24
Forecasting Supply of Human Resource:
Forecasting Supply of Human Resource depends on Number of Factors;
 Demographic changes
 Education of the workforce
 Labor mobility
 Government policies
 Unemployment rate
2–25
For forecasting supply of human resource we need to consider internal and
external supply.
Internal supply of human resource available by following ways;
 Transfers
 Promotions
 Retired employees
 Recall of laid-off employees, etc.
2–26
External supply of human resource depends on following factors;
 Supply & Demand of jobs
 Literacy rate of the Country
 Rate of population
 Nature of the industry and its Current & forecasted Growth rate.
 Technological Developments
 Compensation packages
2–27
Mostly accepted techniques used in Forecasting Supply of Human Resource are;
i. Succession Analysis
ii. Markov Analysis
2–28
2–29
 Succession Analysis
Determining the internal labour supply calls for a detailed analysis of

how many people are currently in various job categories or have
specific skills within the organization.
The planner then modifies this analysis to reflect changes expected in

the near future as a result of retirements, promotions, transfers,
voluntary turnover, and terminations.
The purpose of supply forecasting is to determine the size and quality
of present and potential human resources available from within and
outside the organization to meet the future demand of human
resources.
Supply forecast is the estimate of the number and kind of potential

personnel that could be available to the organization.
2–30
 Succession Analysis
The above figure illustrates that internal supply forecasting can be estimated based on
the following:
(a) Current Staffing Level

(b) Projected Outflows This Year
(c) Projected Inflows This Year 2–31
 Markov Analysis
The technique is named after Russian mathematician Andrei
Andreyevich Markov, and can be used to model the internal flow of
human resources.
These matrices simply show as probabilities the average rate of historical

movement from one job to another.
2–32
 Markov Analysis
2–33
Chapter Contents

2–34
Comparison / Gap Analysis:
As a result of the previously taken steps Organization will realize one of the
following situations;
a) Employee Demand = Employee Supply
No Action is Required.
a) Employee Demand < Employee Supply
Personnel Surplus.
a) Employee Demand > Employee Supply
Personnel Shortage.
2–35
Chapter Contents

2–36
Corrective Action / Strategies:
Corrective Action for Personnel Surplus;
 Employee Layoff
 Termination of Contracts
 Demotions
 VRS
 Non-Recruitment
2–37
Corrective Action / Strategies:
Corrective Action for Personnel Shortage;
 Overtime Work Employment
 Recruitment – full time
 Recruitment – Part time
 Contracting
 Recalling
 Outsourcing
2–38
HR Dash Board:
HR Dash Board will
depict a summarized
graphical version of the
current status of HR
division from different
points of view in terms
of different
perspectives
2–39
HR Dash Board:
2–40
Chapter Contents

2–41
Advantages / Aims:
 To facilitate the planned corporate growth / expansion (According to the overall
Strategic Plan of the business.
 To recruit & maintain the HR requirement in both quantitative & qualitative

forms. (Numbers & profile)
 To predict possible employee turnover and to take necessary mitigations or

counter strategies.
 To develop staff knowledge, skills, standards and ability. (through Training &
Development)
 To make the best use of Human resources
 To maintain the HRM cost at a minimum.
 To gain a Competitive Advantage on HR factor.

2–42
Advantages / Aims:
•Simply Human resource Planning will ensure

that the
“Correct Number of Employees with a Correct
profile are Available with in the Organization at
the correct time for the correct cost”
2–43
Problems / Challenges:
 Inaccuracy (Forecasting Supply & Demand)
 Employee Resistance
 Uncertainty (factors beyond the control of the Organization)
 Insufficient / Poor Information Systems
 Time, Cost & Efforts
2–44
THANK YOU !
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Managing Human Resources

Bohlander • Snell 14th edition
PowerPoint Presentation by Charlie Cook

The University of West Alabama

HR Planning

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MANAGING PEOPLE

Head of MarketingPowerPoint Presentation by Charlie Cook

2. HR Planning Vs Strategic Planning

3. Forecasting Demand for human Resource.

4. Forecasting Supply of Human Resource.

5. Identifying the Work Force Gap.

6. Strategies / Corrective Action

7. Advantages / Challenges of HRP

2. HR Planning Vs Strategic Planning

3. Forecasting Demand for human Resource.

4. Forecasting Supply of Human Resource.

5. Identifying the Work Force Gap.

6. Strategies / Corrective Action

7. Advantages / Challenges of HRP

 The ongoing process of systematic planning to achieve optimum use

© 2007 Thomson/South-Western. All rights reserved. 2–4

 A Process in which , an organization attempts to estimate the demand

© 2007 Thomson/South-Western. All rights reserved. 2–5

 Sectional level : managing Demand & Supply of

 Industry level : managing Demand & Supply of

 Unit level : managing Demand & Supply of

 Departmental Level: managing Demand &

 Job Level: managing Demand & Supply of

2. HR Planning Vs Strategic Planning

3. Forecasting Demand for human Resource.

4. Forecasting Supply of Human Resource.

5. Identifying the Work Force Gap.

6. Strategies / Corrective Action

7. Advantages / Challenges of HRP

It includes following key Activities;

 Setting Corporate Direction (Where Do We Want to Go?)

 Situational / Environment Analysis (Where Are We Now?)

 Strategy Formulation (How Can We Go There?)

 Strategy Evaluation & Selection (What is the Best Way?)

 Strategy Implementation (Moment of Truth)

 Monitoring & Controlling (Are We There?)

 Forecasting of Human Resource

These activities help prepare HR plan of the organization.

They are correlated

1. Forecasting Demand for Human Resource.

2. Forecasting Supply of Human Resource

3. Comparison / Gap Analysis

4. Corrective Action / HRP Strategies

2. HR Planning Vs Strategic Planning

3. Forecasting Demand for human Resource.

4. Forecasting Supply of Human Resource.

5. Identifying the Work Force Gap.

6. Strategies / Corrective Action

7. Advantages / Challenges of HRP

Forecasting Demand for Human Resource depends on Number of Factors;

ii. Replacement Needs

v. Expansion / Growth of operations

Number of techniques can be used in Forecasting Demand for Human

ii. Work Study Techniques

iii. Trend / Ratio Analysis

iv. Delphi Method / Model

Line mangers send their departmental requirement of human

In Practice, Combination of Above will be used.

 Work Study techniques / Work – Load Analysis

Under this method, estimated total production and activities for a

Past-experience of the management can help in translating the work-

2000 $2,351 14.33 164

2008* $4,283 12.52 342

The human resource experts collect the manpower needs,