The HRP process refers to the systematic monitoring of the external forces influencing the organization. HRP involves forecasting personnel needs, assessing personnel supply and matching demand-supply as to factors through personnel related programmes. The HR planning process is influenced by overall organizational objectives and the environment of business. The following are the steps undertaken for an effective HR planning process:
Organizational Objectives and Policies: The HR plan is usually derived from organizational objectives as they dictate specific requirements in terms of the number and characteristics of its employees. Once the organizational objectives are specified, communicated and understood by all concerned, the HR department must also specify its objective about HR utilization in the organization.
Environmental Scanning: By scanning the organizational ecosystem for changes that will affect an organization, managers can anticipate their impact and make adjustments early. HRP managers must analyse the following forces to develop a pertinent HR plan:
- Economic factors like general and regional conditions
- Technological changes
- Demographic changes like age, composition and literacy
- Political and legislative issues like laws and administrative rulings
- Social concerns like child care, educational facilities and priorities
HR Demand Forecast: Demand forecasting is the process of estimating the future quantity and quality of people required to meet the future needs of the organization. Annual budgets and long-term corporate plans when translated into activity form the basis for the HR forecast. For example, in the case of a manufacturing company, the sales budget will form the basis for the production plan, giving the number and type of products to be produced in each period. This, in turn, will form the basis upon which an organization will decide the number of hours to be worked by each skilled category of workers. Once the number of hours required is available, the organization can determine the quality and quantity of personnel required for the task.
Demand forecasting is influenced by both internal factors and external factors:
External factors include:
- Competition
- Economic climate
- Laws and regulatory bodies
- Changes in technology
- Social factors
Internal factors include:
- Budget constraints
- Production level
- New products and services
- Organizational structure
- Employee separations
Demand forecasting is essential because it helps organizations to:
- Quantify the jobs necessary for producing a given number of goods
- Determine the nature of staff mix required in the future
- Assess appropriate levels in different parts of the organization to avoid unnecessary costs
- Prevent shortages of personnel where and when they are needed by the organization
- Monitor compliance with legal requirements about the reservation of jobs
Techniques like managerial judgment, ratio-trend analysis, regression analysis, work-study techniques, Delphi techniques are some of the major methods used by organizations to conduct demand forecasting.
HR Supply Forecast: The supply forecast determines whether the HR department will be able to procure the required number of workers. A supply forecast measures the number of people likely to be available from within and outside an organization, after making allowance for absenteeism, internal movements and promotions, wastage and changes in hours, and other conditions of work.
An effective supply forecast is essential because it helps organizations to:
- Effectively conduct operations and meet their objective
- Assess existing staffing needs in different parts of the organization
- Clarify the staff mixes that might arise in future
- Prevent the shortage of people where and when they are most needed
- Monitor future compliance with legal requirements of job reservations
A supply analysis covers the existing human resources, internal sources of supply and external sources of supply.
HR Programming: Once an organization‘s personnel demand and supply are forecasted the demand and supply need to be balanced so that the vacancies can be filled by the right employees at the right time.
HR Plan Implementation: HR implementation requires converting an HR plan into action and, in effect, initiating a series of actions as a part of the said implementation. Programmes such as recruitment, selection and placement, training and development, retraining and redeployment, retention plan, succession plan, etc. when clubbed together form the implementation part of the HR plan.
Control and Evaluation: Control and evaluation represent the final phase of the HRP process. All HR plans include budgets, targets and standards. The achievement of the organization will be evaluated and monitored against the plan. During this final phase, the organization will be evaluated on the number of people employed against the established personnel (both those who are in the post and those who are in pipeline) and on the number of personnel recruited against the recruitment targets. Evaluation is also done for employment cost against the budget and wastage accrued so that corrective action can be taken in future.
