In simple words, HRP is understood as the

process of forecasting an organization's

future demand for, and supply of, the right
type of people in the right number.
After this only the HRM department can
initiate the recruitment and selection
process
Its called by manpower planning, personal
planning or employment planning

It includes the estimation of how many qualified

people are necessary to carry out the assigned
activities, how many people will be available, and
what, if anything, must be done to ensure that
personal supply equals personnel demand at the
appropriate point in the future.
Basically its the process by which an organization
ensures that it has the right number & kind of
people, at the right place, at the right time,
capable of effectively & efficiently completeing
those tasks that will help the organisation achieve
its overall objectives.

FUTURE PERSONNEL NEEDS

1.

Surplus or deficiency in staff strength is the results of the

absence of or defective planning.

COPING WITH CHANGE

2.

Enables an enterprise to cope with changes in competitive

forces, markets, technology, products & government
regulations

CREATING HIGHLY TALENTED PERSONNEL

3.

HR manager must use his/her ingenuity to attract & retain

qualified & skilled personnel
Succession planning

PROTECTION OF WEAKER SECTIONS

4.

SC/ST candidates, physically handicapped, children of the

socially disabled & physically oppressed and backward
class citizens.

5. INTERNATIONAL STRATEGIES

Fill key jobs with foreign nationals and reassignment of employees from within or across
national borders

6. FOUNDATION FOR PERSONNEL FUNCTIONS

Provides information for designing & implementing

recruiting, selection, personnel
movement(transfers,
promotions, layoffs) &
training & development

7. INCREASING INVESTMENTS IN HUMAN

RESOURCES

Human assets increase in value

8. RESISTANCE TO CHANGE AND MOVE

Proper planning is required to do this

9. OTHER BENEFITS

Upper management has a better view of the

HR dimensions of business decision
More time is provided to locate talent
Better opportunities exist to include women &
minority groups in future growth plans
Better planning of assignments to develop
managers can be done

I.TYPE & STRATEGY OF ORGANISATION: The type of

the organization is an important consideration because
it determines the production processes involved,
number and type of staff needed, and the supervisory
and managerial personnel required. Manufacturing
organizations are more complex in this respect than
those that render services.
The strategic plan of the organization defines the
organizations HR needs. For exe., a strategy of organic
growth means the additional employees must be hired.
Acquisitions or mergers, on the other hand, probably
mean that the organization will need to plan for
layoffs, since merger tend to create, duplicate or
overlapping positions that can be handled more
efficiently with fewer employees.

II. ORGANIZATIONAL GROWTH CYCLES & PLANNING

Embryonic stage No personnel planning

Growth stage HR forecasting is essential
Maturity stage Planning more formalized & less
flexible
Declining stage Planning for layoff, retrenchment &
retirement

III. ENVIRONMENTAL UNCERTAINITIES

Political, social & economic changes

Balancing programmes are built into the HRM
programme through succession planning, promotion
channels, layoffs, flexi time, job sharing, retirement,
VRS, etc.

IV. TIME HORIZONS

Short-term & Long-term plans

V. TYPE & QUALITY OF FORECASTING INFORMATION

Type of information which should be used in making

forecasts

VI. NATURE OF JOBS BEING FILLED

Difference in employing a shop-floor worker & a

managerial personnel

VII. OFF-LOADING THE WORK

ENVIRONMENT
ORGANISATIONAL
OBJECTIVES AND POLICIES
HR NEEDS FORECAST

HR SUPPLY FORECAST
HR PROGRAMMING
HRP IMPLEMENTATATION
CONTROL AND
EVALUATION OF PROGRAMME

SURPLUS

SHORTAGE

RESTRICTED HIRING

RECRUITMENT

REDUCED HOURS

AND SELECTION

VRS, LAY OFF, etc

THE HRP PROCESS

HR plans need to be based on Organizational Objectives.

The role of HRP is to subserve the overall objectives by
ensuring availability and utilization of Human Resources.
In developing these objectives, specific policies need to be
formulated to address the following questions:

Are vacancies to be filled from promotions from within or

hiring from outside?
How do training and development objectives interfere with the
HRP objectives?
What union constraints are encountered in HRP and what
policies are needed to handle these constraints?
How to enrich employees job? Should the routine and boring
jobs continue or be eliminated?
How to downsize the organization to make it more
competitive?

Demand forecasting is the process of

estimating the future quantity and quality of
people required.
The basis of the forecast must be the annual
budget and long-term corporate plan,
translated into activity levels for each
function and department

Demand forecasting must consider several

factors both internal and external.
Among external factors are competition(foreign
and domestic), economic climate, laws and
regulatory bodies, changes in technology and
social factors.
Internal factors include budget constraints,
production levels, new products and services,
organizational structure and employee
separation.

Demand forecasting helps to :

Quantify

the jobs necessary for producing a given

number of goods
Prevent shortage of people where and when they are
needed most
Determine what staff-mix is desirable in the future
Monitor compliance with legal requirements with
regard to reservation of jobs
Asses appropriate staffing levels in different parts of
the organization so as to avoid unnecessary costs

Managerial judgement
Ratio-trend analysis
Work study techniques
Delphi technique
Flow models
Other techniques

In this all managers sit together, discuss and

arrive at a figure which would be the future
demand for labour.
This technique may involve a bottom-up or
top-down approach. A combination of both
could yield positive results. In the first, line
manager submit their departmental proposals
to top managers who arrive at the company
forecasts. In the top-down approach, top
managers prepare company and departmental
forecasts. These forecasts are reviewed with
departmental heads and agreed upon.

This is the quickest forecasting technique.

This technique involves studying past ratios,
say, between the number of workers and
sales in an organization and forecasting
future ratios, making some allowance for
changes in the organization or its method.

Work study techniques can be used when it is possible to apply

work measurement to calculate the length of operations and the
amount of labour required. Following is a highly simplified
example of this procedure:

1. Planned output for the next year

20000 units

2. Standard hours per unit

3. Planned hours for the year

1,00,000

4. Productive hours per man/year

2000

(allowing normal overtime, absenteeism and idle time)

5. Number of direct workers required (4/5)

50

This technique is the method of forecasting

personnel needs.
It solicits estimates of personnel needs from
a group of experts, usually managers.
The HRP experts act as intermediaries,
summarize the various responses and report
the findings back to the experts.
Summaries and surveys are repeated until
the experts opinion begin to agree.

Supply forecasting measures the no of

people likely to be available from within and
outside an organisation,after making
allowance for absenteeism, internal
movements and promotions, wastage and
changes in hours and other conditions of
work.

Quantify no of people and positions expected

in near future.
Clarify the staff mixes.
Prevent shortage of people
Asses present staffing levels in different
parts of organization.

Existing human resources: Analysis of present

employees is greatly facilitated by HR
audit.HR audit summaries each employees
skills and abilities.
Internal sources of supply: Armed with HR
audits, planners can proceed with the
analysis of internal supply.
External sources of supply

Skill inventories The audit of non-managers are called skills

inventories. The information from skill inventories is used as
transfer and promotion decisions, they should contain information
about each employees current job. The information's are:
1. Personal data-age, Marital Status
2. Skills- eduction,experience,training
3. Special qualifications: Member of professional bodies, special
achievement
4. Salary and job history: Present and past salary, dates of pay raises
5. Company data: retirement information, seniority
6. Capacity of individual: scores of tests, health information
7. Special preference of individual: geographic location, type of job

Management inventories
1. Work history
2. Strengths
3. Weakness
4. Promotion potential
5. Career goals
6. Personal data
7. Number and types of employees supervised
8. Total budget managed
9. Previous management duties.

HR planning and analysis

Equal employment
Staffing
HR development
Compensation and benefits
Health,saftey and security
Employee and labor relations

Inflows and outflows

Internal supply= current supply outflow + inflow
Source of
No. of
Sources of
No. of
inflows
People
outflows
People
Transfers
12
Resignation
13
Promotions 10
Discharges
2
Current
personnel
Demotions
4
level 250
Retirement
10
operators
Promotions
13
Total Inflows 22
Total out flows
42
Current personnel level-outflows+inflows =Internal supply
250-42+22=230

Turnover rate
No of seperations during one year
100
Avg no of employees during the year

30
x 100
150
20 % separation during one year

Conditions of work and absenteeism.

Absenteeism is given by
no of persons days lost

100

Avg no of persons no of working days

Absenteeism obviously reduces the number of employees available for
work.If the absenteeism rate is four percent, only 96 out of 100
people are available for work.The effect of absenteeism on the
future supply of labour should be allowed.Trace the causes and
remedial actions for this.
Productivity level: Any change in productivity would affect the
number of persons required per unit of output. Increase in
productivity will reduce the requirement, and decrease in it would
have the opposite effect.

Movement among jobs

New blood and new experience

To replenish old personnel

Organizational growth and diversification

create the needs to use external sources to
obtain additional number and type of
employees.

After personal demand and supply are

forecast the vacancies should be filled at
right time with right employees.

Converting HR plan into action.

Action programmes are..

Recruitment
Selection & placement
Training and development
Retraining & redeployment
The retention plan
The redundance plan
The succession plan

Recruitment
Selection & placement

If

Shortage of employees
- DoHire new full-time employees
Offer incentives for postponing retirement
Re-hire retired employees on part-time basis
Attempt to reduce turnover
Bring in over-time for present employees
Subcontract work to another company
Hire temporary employees
Re-engineer to reduce needs

If surplus of employees is expected

-DoDo not replace employees who leave
Offer incentives for early retirement
Transfer or reassign excess employees
Use slack time for employees training or
equipment maintenance
Reduce work hours
Pay off employee

It covers no. of trainees required

It necessary for existing staff
Identification of resource personal for
conducting development programmes
Frequency of training and development
programmes
Budget allocation

 Retraining

and redeployment:

New

skill should be imported to existing

employee

Retention

plan:

Compensation plan
Performance appraisal
Employees leaving in search of green pastures
The induction criss
Shortages
Unstable recruits

Who is to be redundant and where and when

Plans for re-development or re-training
Steps to be taken to help redundant
employees finding new jobs
Policy for declaring redundancies
Programme for consulting with unions or
staff associations

Establish the reporting procedures

Identifying who are in post and those who
are in pipe line
It should report employment costs against
budget and trends in wastage and
employment ratios

 Inaccuracy:

HRP involves forecasting the demand

for and supply of human resource. It cannot be a
cent per cent accurate process. Longer the time
horizon, greater is the possibility of inaccuracy.
Uncertainties: Labour absenteeism, labour
turnover, seasonal employment, technological
changes and market fluctuations are the
uncertainties which serve as constraints to HRP.
HR

practitioners are inexpert in managing

business
Conflicts between short term and long term HR
needs

Inefficient Information System: In most of the

Indian industries, human resource information
system has not been fully developed. In the
absence of reliable data, it is not possible to
develop effective HRP.
Time and Expense: Manpower planning is a timeconsuming and expensive exercise. A good deal of
time and cost are involved in data collection and
forecasting.

Adequate information system

Participation
Adequate organisation
Human Resource Planning should be balanced
with corporate planning
Appropriate time horizon