Introduction to Human Resource Planning (HRP)
Planning, in general, involves analyzing the present and preparing for the future. It is done to achieve a certain goal or objectives in the future. Human resource includes the knowledge, skills, and abilities possessed by the individuals working inside the organization. Collectively, human resource planning involves the planning of the current and future demand of the talents in the organization. In addition, it also involves the planning for the development of the knowledge, skills and other requirements of the human resources. Therefore, Human resource planning is all about planning and obtaining the present & future needs of the organizational human resource requirements.
HRP for Need Assessment
The planning can be for immediate need or for a long-term human resource requirement. For example, Apple decides to open its official outlet in Nepal. With its plan to open the outlet, it also needs to prepare a required plan for the human resource. The number of front-line employees, the qualification of them, the backend employees and their numbers etc., are to be properly planned. Similarly, it also needs to evaluate if the skilled human resources required to perform the task is available or not. Thus, HR planning also involves the demand and supply analysis of the human resource in the whole industry.
HRP for Internal Assessment
In addition, human resource planning also involves analyzing the existing resources inside the organization. For example, companies conduct performance evaluation of their employees. If the employees are found to require training, it is provided to them. This is also a function of human resource planning. Human resource training and development is a crucial function of human resource planning. In this aspect, it is a continuous process. But there are several factors that can affect the frequency of the planning and its need. The two major factors are internal and external.
HRP for External Assessment
External factors that may require change or formation of new human resource planning are changes in government policies, changes in business environment, level of technology, outsourcing of human resources etc. Internal factors include changes in company’s policies and strategies such as expansion, diversification, merger and acquisition, changes in human resource policy, trade unions etc. Thus, the planning should be dynamic and continuous so that the required changes can be made in time.
HRP for Recruitments and Layoffs
The mass layoff or recruitment done by organizations are also a part of HR planning. Alibaba laid off approximately 10,000 employees based on their poor performance. It was done in alignment with the company’s objective of increasing profitability through efficiency. Uncertainty caused by Covid-19 has also made companies reluctant to lay off. Companies such as Groupon, Oracle have also been laying off their employees post the pandemic. The pandemic is an external factor that caused the companies to change their plan of human resource in relation to their company’s plan.
On the other hand, companies such as Amazon, Walmart needed to hire more people to meet the increased demand of delivery amid pandemic restrictions. Amazon hired more than 100,000 new employees so that they could meet the increased demand. Similarly, Walmart hired more than 150,000 employees for temporary as well as permanent ones. CVS Health, given the demand for health services, hired 50,000 employees in positions of full time, part time and temporary roles. Therefore, HRP is a continuous process and the impact of internal and external factors is to be accessed accordingly.
Human Resource Planning Process
The process that goes into making a proper plan for human resource is listed below:
Assess Existing HR Capacity
Any company or HR manager needs to firstly assess its existing human resource before making additional plans. The hiring or layoffs should also be attributed first to assessment of the talents inside the organization. Suppose, a company is thinking of hiring someone for a new position in the organization. With the help of capacity assessment, the HR manager can know if any of the existing employees possess the necessary skill set to perform that job. Or, if somebody can be trained to perform the job without having to hire a new employee. Companies such as AT&T, Marriott International Inc. conduct training and development programs to develop its workforce.
The assessment of capacity of existing employees can be done through an evaluation process. Review of past performance evaluations. In addition, the company can design technical or non-technical assessment methods as per the nature of the job requirement and the type of company.
Forecast HR Requirements
After the completion of capacity assessment, the HR manager needs to forecast the future needs. The forecasting must be based on the assessment as well as the company’s future goals and missions. Requirement of new human resources, development of existing human resources, availability of the required employees in the market are to be critically evaluated. Companies need to do the forecast based on the evaluation of demand and supply. If the needed skilled resources are available in the market, they may be hired. But if there is a lack of needed skilled resources, the existing employees need to be trained and developed.
Develop Talent Strategies
When the company successfully accomplishes the forecast of the HR requirements, it needs to implement it. The implementation is done by formulation of talent strategies. Talent strategy can be to recruit new employees or conduct training and development programs to develop the talent in the organization. If the forecast emphasizes on hiring new employees, a new recruitment and selection plan needs to be made to perform the requirement. Similarly, if it emphasizes on developing existing employees, related actions need to be undertaken.
Review and Evaluate
The information on effectiveness of the strategy can be achieved through review and evaluation. After the implementation, the company needs to evaluate whether it has helped the company achieve its goals or not. Whether the required number of skilled employees are hired or not and if the training has developed existing employee’s skill sets. Evaluation provides a great advantage to continue or change the plan based on the performance. If the desired objectives have not been achieved, the plan needs to change or adjustments need to be made.
Importance of Human Resource Planning in Strategic planning
Strategic planning involves formulating and implementing strategies based on organizations business opportunities. It is about creating business strategies, implementing them and evaluating the results. These must be in regards to the company’s long-term mission and goals. Thus, there must be a close interconnection between strategic planning and human resource planning. The importance of human resource planning in strategic planning is thus listed below:
- HRP helps in assessing future personnel needs while aligning the outcomes of the strategic planning. Helps in evaluating the demand and surplus of the skilled labor forces in the industry given the need of the company.
- It provides concrete information required for other human resource functions. This helps in effective and efficient recruitment, selection, training and development and performance appraisals.
- It helps in evaluating the competitive advantages in a company’s human resources compared to the competitors.
- It helps in building resilience in the company. This is achieved by early prediction and projection of the impact in human resource availability. The projection is based on changes in government regulations, cases of mergers and acquisitions, industry competition, etc.
- A strong HRP always serves as a compliment for the strategic planning process. It helps in smooth execution of plans made under the strategic planning. It thus helps in achieving the desired outcomes.