Human Resource Planning System

The critical steps in Human Resource Planning system

The steps in the HRP process are 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. The steps in HRP System are as follows:

A.   Purpose of Human Resource Planning: Human Resource Planning fulfills individual as well as organizational goals. What it essentially amounts to is “striking a balance” between the future human resource 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 The 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 resource 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, and product/skill mix changes, profit/revenue growth projections, in addition to management philosophy and government policies. This step also includes and analyses of the external labor/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 “Skill 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 is 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 v/s 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 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 labor supply with a view to making an effective use of these sources. Some important considerations at this point are:

• Specific roles/disciplines being hired for, by them which roles are pivotal to the business.
• Competencies and capabilities needed.
• Manager vs. Employee hiring
• Hire internally vs. External sourcing.
• Planning for new skills through training existing staff v/s hiring new teams.
• In case of surpluses, planning for redeployment/ reduction in workforce as required
• Succession planning for key positions in the company.