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What is Human Resource Planning? Process, Meaning & Features

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14th Sep, 2022
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What is Human Resource Planning? Process, Meaning & Features

The employees and workforce who work for any organization are its driving force and most significant assets. Currently, 57% of companies think of employee retention as a problem. No matter how big or small a company is, the quality and quantity of the employees working in them help get the profit and success the company wants. We all know that having a good workforce not only helps in getting success but also aids in scaling the company. This implies the need for proper workforce management.

As the name suggests, Human Resource Planning helps devise a plan for the workforce of a company to satisfy and meet the requirements of both the employees and the employers. Here, in this article, we will be discussing this essential organizational sector in detail.

What is Human Resource Planning?

Human Resource Planning has been derived from the word “human resource”. We know that HR is that division of the company that deals with the hiring of employees and administering the employee benefit programs. The employees in the HR division are involved in finding new applicants, screening them for skilled ones, and training those qualified applicants to fit into the company.

Now let’s talk about Human resource planning or HRP. It is a continual process of methodical planning done beforehand to ensure that an organization’s most important asset, skilled employees, is used to its full potential. In a study, it was found that 69% of freshers and millennial employees would prefer to earn $50K a year doing a job they love rather than earn $75K a year at a job they think is boring.

Human resource planning guarantees that the employees and the job profiles are a good match while preventing labor shortages or surpluses. Having a competent HRP plan in place can increase a company’s productivity and profitability. HRP helps businesses devise plans ensuring that there is a consistent supply of qualified workers for their needs.

This is also the reason why HRP is called the Workload or Manpower planning. HR Planning is used to aid businesses in evaluating their needs and planning beforehand to satisfy those needs. The HRP of a company should be flexible enough to fulfill short-term staffing demands while also adjusting to long-term changes in the business environment.

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Why is HRP needed?

To compete effectively in the market, it is necessary for a company to plan out its human resource requirements well in advance. Given below are a few reasons why:

1. A well-thought-out HR strategy allows for ample time for employee recruitment, selection, and training. It becomes even more important since acquiring staff is a time-consuming procedure, and in certain situations, the sort of applicants required for the roles may not always be available. In the absence of adequate staff, new projects and growth programs may be postponed or delayed, resulting in additional reductions in efficiency and production.

2. Another reason why HRP is important is that it might be challenging to find people with the necessary skills within short spans of time. A well-organized, pre-planned HRP can help companies navigate through the crowd and avoid problems otherwise faced due to lack of time and skilled labor.

 3. Human Resource Planning is vital because of the inevitability of periodic labor turnover which occurs as a result of layoffs, weddings, promotions, transfers, and other factors, resulting in a continual ebb and flow in the workforce.

4. Existing staff must be taught, or new skills must be introduced into an organization due to technological changes and new production practices. In addition, for changes in organizational structure and layout to be implemented cleanly, we must plan for the appropriate human resources from the start.

What are the objectives of HRP?

As a whole, Human Resources Planning is the driving force of any company. Proper planning helps to attract and retain the required quantity and quality of human resources. It also helps to forecast employee turnover and develop plans for limiting turnover and filling vacancies.

It facilitates expansion, diversification, and other programs. HR planning helps to foresee the influence of technology on the workplace, current personnel, and future human resource needs. It also aids in improving knowledge, competence, standards, ability, and discipline, among other things.

HRP also assesses the need for a surplus or shortfall of human resources and takes appropriate action. It also helps in maintaining good workplace interactions by ensuring that human resource levels and structures are optimal. Lastly, HRP helps to reduce the imbalances caused by a lack of human resources of the right sort, in the right amount, at the right time, and in the right place.

What are the steps in HRP?

Human Resources planning can be broadly classified into four processes: scrutinizing labor supply, forecasting labor demands, balancing labor demands with the supply, and devising and implementing a plan. Each process should be followed in a sequential and effective manner so that the company can find and retain a qualified and skilled workforce for success. All these processes have been explained below:

  • Scrutinizing Labor Supply: The very first step in human resource planning is to determine the current human resource supply of the organization. The HR department examines the organization’s potential based on the number of people, their skills, credentials, jobs, perks, and performance levels in this process.
  • Forecasting Labor Demand: The organization must describe its workforce’s future in the second step. Promotions, retirement plans, layoffs, and transfers, as well as anything else that affects a company’s future requirements, can all be considered here by the HR department. External factors influencing labor demand, such as technological advances that may affect the requirement for employees, can also be examined by the HR department.
  • Balancing labor demands with the supply: Forecasting work opportunities is the third phase in the HRP process. HR provides a bridging analysis to identify precise requirements for narrowing the company’s labor supply against future demand. This type of study is frequently used to answer questions like whether workers need to learn new skills, if the organization needs additional managers, whether all employees are using their abilities in their existing jobs, and so on.
  • Devising and implementing a plan: The solutions to the preceding step’s questions aid HR in determining how to continue in the HRP process’s last phase. The HR must now put its strategy into action and integrate it into the firm. To execute its strategy, the department needs a budget, the capacity to implement it, and a coordinated effort with other departments, which are all included in the HRP.

If you’re interested in learning more about Human Resource Planning, you can check out the Professional Certificate Programme in HR Management and Analytics offered by IIM Kozhikode in collaboration with upGrad. This program helps you gain the necessary skills to become an HR professional and in-depth knowledge of HR concepts along with their industrial applications.

Conclusion

According to studies, it is said that 79% of employers think that their employees have a significant retention and engagement issue. To overcome such problems, a well-functioning Human Resource Planning sector comes to the rescue of a company. The main goal of this sector is to make preparations for the future by reducing organizational uncertainty regarding employee procurement, placement, and growth.

It is done to make the best use of human resources and to ensure that the necessary types and numbers of personnel are in place to satisfy organizational objectives. HRP may be defined as the process of defining and deciding objectives, policies, and programs that will develop, use, and distribute people in order to fulfill the organization’s goals.

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Frequently Asked Questions (FAQs)

1What would happen if HRP was not present?

In the absence of HRP, estimating an organization's HR requirements becomes a guessing game. Without HRP, companies would be unable to predict future workforce requirements, making it impossible to adapt to changes and competition. Internally cultivating talented human resources would also be tough. Businesses will be unable to conduct personnel duties due to a lack of knowledge and there will be significant opposition to change. HRP assists in the development of managers to meet the demands of the company. It would be difficult to predict such needs without HRP. At the core, human resource planning also aids in the development of global strategy and the fulfillment of personnel requirements.

2What factors can have an impact on HRP?

HRP is influenced by a variety of things. To begin with, it is contingent on the sort of organization, its culture, and its tactics. It is influenced by the social, political, and economic context in which companies function. Whether short-term or long-term HRP plans should be established is based on the time period for which they are to be executed. HRP is also affected by the types of positions that must be filled as a result of retirement, promotion, retrenchment, or moving over.

3What is the difference between Hard and Soft HR Planning?

Human Resource planning has been divided into two sections based on many aspects such as the number of employees engaged and the needs of the firm. Hard HR planning examines a series of quantitative variables to guarantee that the correct number of the appropriate people are accessible when the organization requires them. Soft HR planning is more concerned with recruiting individuals that fit the company's culture, drive, and attitude. These are frequently used in combination.

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