The process by which top management ascertains entire goals & purposes of the organization and how they are to be accomplished is referring to as strategic planning. And the process of consistently reexamining human resource needs to ensure that needed number of employees, with the needed skills, is present when they are required is refer to as human resource planning (HRP).
Read More: Line and Staff Aspects of HRM
Human resource planning can be undertaken after an organization’s strategic plans have been formulated. Requirements and availability are two components of human resource planning.
Forecasting human resource requirements includes ascertaining the kind and number of employees required by location or skill level. The human resource manager considers both external sources and internal sources in order to forecast availability.
The business organization can ascertain whether it will have shortage or surplus of employees after the employee availability & requirements have been analyzed.
If a surplus is projected, ways must be ascertained to minimize the number of employees. Some of the ways contain reduced hours, restricted hiring, layoffs and early retirements.
The business organization must get better quality & quantity of employees from outside the organization, if a shortage is forecasted. External recruitment & selection is needed in this case.
Importance of Human Resource Planning for Organization
Importance of human resource planning for an organization can be described with the help of these below mentioned points.
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Objectives of Human Resource Planning
Human resource planning enables organizations to predict their future. HR requires specifying practices that will assist them accomplish those requirements.
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Benefits of HR Planning:
HR planning has the following benefits, which you always need to remember.
- Assists in planning job assignments
- Identifies recruiting requirements
- Assists cope with fluctuations in staffing
- Gives other useful information
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Forecasting Human Resource Requirements
An estimate of types and numbers of employees the organization will require at future dates in order to actualize its objectives.
Organizations are recently using many techniques of forecasting human resource availability and requirements.
Zero-Base Forecasting: The recent level of employment of the organization is used as the starting point in this method for ascertaining future staffing requirements. A thorough analysis of the human resource requirements is the key to zero-base forecasting.
Bottom-Up Approach: A forecasting way in which every level of the organization begins from bottom and goes towards top to forecasts the employee requirements known as bottom-up-approach.
Use of Mathematical Models: In forecasting HR requirements, mathematical models can be helpful. The relationship between number of employees required and sales demand is positive one.
Simulation: A technique in which a mathematical model is used for experimenting a real-world situation known as simulation. Abstraction of real world is this model.
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Forecasting Human Resource Availability
Availability forecast refer to ascertaining whether the business organization will be able to procure employees with the essential skills and from what sources these persons can be got.
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Surplus of Employees Forecasted
When a comparison of availability and requirements shows an employee surplus will result, reduced hours, layoffs, early retirements and restricted hiring may be needed to rectify the situation.
Restricted Hiring: When the business organization decreases the work force by nor replacing the employees who leave, restricted hiring policy is implemented.
Reduced Hours: The total number of hours worked is decreased as a reaction to declining demand made. Management may decide to cut every employee’s time to 30 hours, instead of continuing a 40 hours week.
Early Retirement: Another mean of decreasing the supply of workers is through early retirement of some current employees.
Layoffs: In certain cases the business organization has no choice except to layoff part of its work force.
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Shortage of Workers Forecasted
When there emerges the problem of shortage of workers, than the organization struggle to recruit the essential workers in order to meet the requirements of the organization. Following are some of actions that should be taken.
Read More: Functions of Human Resource Management
Creative Recruiting: New approaches to recruiting must be utilized when there is shortage of personnel. The organization may have to recruit in various geographical areas than in the past, seek various types of candidates and explore new methods.
Compensation Incentives: Business organizations may have to rely on compensation incentives when competing for workers in high demand situation.
One obvious method is premium pay. However, a bidding war may be triggered by using this approach that the organization cannot tolerate for a longer period of time.
More effective rewards may be needed to appeal employees to a business organization such as flexible working hours, four-day work weeks, and part time employment, telecommuting and child care centers.
Training Programs: Special training programs may be required to make ready previously unemployable persons for jobs with the business organization.
In order to attract persons to a specific business organization, skill training and remedial education are two kinds of programs that may help in this regard.
Different Selection Standards: The lowering of employment standards is another approach for dealing with shortage of employees.
The selection criteria that drop off particular employees should be changed to ensure that proper number of people is available to fill jobs.
