Human Resource Planning Introduction

Human Resource Planning Defined

• Human Resource Planning is the process of ensuring an organization has the right personnel to complete tasks that help achieve its objectives.
• It involves developing strategies to match the size and skills of the workforce to organizational needs.
• HR planning assists in recruiting, retaining, and optimizing the deployment of personnel needed to meet business objectives and respond to changes in the external environment.

Human Resource Planning Process

• Analyzing: involves understanding the external business environment and trends, and analyzing the internal workforce to determine the availability of skills and competencies.
• Forecasting: involves estimating the future numbers of people required and the skills and competencies they will need.
• Planning: involves developing strategies to meet the forecasted needs.

Forecasting

• Demand forecasting: estimates the future numbers of people required and the skills and competencies they will need.
• Techniques used in demand forecasting include:
  • Managerial or expert judgement
  • Ratio trend analysis
  • Work study techniques
• Supply forecasting: measures the number of people likely to be available from within and outside the organization.
• Factors to consider in supply forecasting include:
  • Attrition (labor wastage and retirements)
  • Absenteeism
  • Internal movements and promotions
  • Changes in hours and other conditions of work

Internal Supply Considerations

• Turnover rate: the rate at which employees leave the organization.
• Types of turnover:
  • Resignation (e.g. accepting a job elsewhere, poor health, etc.)
  • Dismissal (e.g. misconduct, poor performance, etc.)

Planning for Growth

• Involves planning for the addition of permanent employees, temporary employees, and contract workers.
• Human resources must plan for the hiring and management of recruiting, and ensure that new employees are educated on company policies and procedures.

Scaling Down

• Involves planning for layoffs, which can be temporary or permanent.
• Human resources must ensure that layoffs are handled properly and legally, and that employees are given maximum notice and support.

Productivity and Employee Wellness

• Human resource planning can influence productivity through employee wellness programs and initiatives.
• Examples of wellness programs include:
  • Incentive programs
  • Health programs
  • Gym membership discounts
  • General wellness programs
• Measuring productivity before and after the implementation of wellness programs can demonstrate increases in output.

Management Succession Planning

• Involves identifying replacement candidates for middle and top management levels.

• This is a key component of human resource planning, but is often confidential and limited to key executives and the top HR executive.### Management Succession Planning

• Focuses on specific individual managers, unlike general human resource planning which focuses on entry-level positions and number of bodies in general.

• A good example of successful succession planning is Proctor and Gamble, which uses a rigorous leadership program called "Build From Within".

• This program "microscopically tracks the performance of every manager, making sure that he is ready for the next slot".

Proctor and Gamble's Succession Planning

• Each of the top 50 jobs already has three replacement candidates lined up.
• The company has a policy of promotion from within, which has been more successful than hiring from outside.
• The company's CEO, Lafley, is extremely happy with their policy, citing a 50% fail rate when they used headhunters in the past.

Implementation and Evaluation of the HR Plan

• The final step in the HR planning process is the implementation and evaluation of results.
• Success is gauged on whether the plan was able to avoid a labor shortage or surplus.
• Evaluation feedback serves as diagnosis of where the process failed and how to prevent it in the future.

Example of Diagnostic Work

• A multinational company in the Philippines forecasted a low demand for their products and services and downsized their labor force by 35%.
• The company offered a severance incentive to encourage voluntary retrenchment.
• The forecast was underestimated, and the result was disastrous, leading to overtime costs and the need to hire new employees at higher salaries.

Learn about Human Resource Planning, a crucial step in getting the right people in the right place at the right time, and its importance in strategic HR management and organizational goals.