Everything you need to know about human resource planning. Human resource planning is considered as a strategy for the acquisition, utilization, improvement and retention of an enterprise’s human resources.
Thus, the activity of manpower planning is synonymous with personnel management itself.
The “Procurement” function of manpower management is basically concerned with having the right type of people available as and when required and improving the performance of the existing people to make them more effective on their jobs.
Manpower management thus starts with manpower planning. Human Resource / Manpower planning involves having the right number and the right kinds of people at the right places, at the right times, doing the right kind of tasks that result in long-run maximum individual and organizational benefits.
In this article we will discuss about human resource planning. Also learn about:- 1. Introduction to Human Resource Planning 2. Meaning of Human Resource Planning 3. Definition of Human Resource Planning 4. Concept 5. Objectives 6. Purpose 7. Benefits 8. Short-Term and Long-Term and Other Details.
- Introduction to Human Resource Planning
- Meaning of Human Resource Planning
- Definition of Human Resource Planning
- Concept of Human Resource Planning
- Objectives of Human Resource Planning
- Purpose of Human Resource Planning
- Short Term and Long Term of Human Resource Planning
- Importance of Human Resource Planning
- Factors Influencing Human Resource Planning
- Responsibilities of the Personnel Department
- Functions of Human Resource Planning
- Process of Human Resource Planning
- Implementation of Human Resource Planning
- Benefits of Human Resource Planning
- Problems and Limitations of Human Resource Planning
- Effective Guidelines for Human Resource Planning
Human Resource Planning (HRP): Objectives, Purpose, Importance, Process, Benefits and Guidelines
Human Resource Planning – Introduction
The success of an organisation depends largely on the quantity and quality of its human resources. No organisation can be successful in the long run without having the right number and the right type of people doing the right jobs at the right time.
Before selecting the right man for the right job, it becomes necessary to determine the quality and quantity of people required in an organisation. This is basically the function of human resource planning.
Human Resource Planning deals with staff requirement, looking after the current and the future demand for skills and the availability of individuals with skills. It is the process by which the organisation determines how a management should move from its current manpower position to the desired manpower position.
The term manpower was very popular during the Second World War, then apparently passed out of widespread usage and reappeared about 1960. The term, manpower, has also been equated with human capital and human resources. Human resources can also be equated with labour.
In a business organisation, human resource is treated as one of the basic resources or inputs which are to be utilized to the maximum possible extent in order to achieve individual and organizational goals. Planning means preparation on for some specific action. It means determining of what is to be done and how it is to be done.
A plan is a programme of action for achieving definite objectives of the organisation. When the planning is taken up for undertaking national development tasks, it is termed as development planning. Manpower planning, in most of the countries is generally undertaken as a part of national development planning.
Human resource planning is an important aspect of personnel administration. It is basically concerned with the determination of the process. Manpower planning essentially is an approach to an imaginative question namely the question of past and present trends, current situations and future requirement in order to determine how many men at what levels of skill and knowledge are or will be required.
Some of the important definitions of human resource planning are as follows:
“Human resource planning is a process of determining and assuming that the organisation will have an adequate number of qualified persons, available at the proper time, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individual involved.” —Beach
“Human resource planning is the process by which management ensures that it has the right number and kinds of people at the right places and at the right time, who are capable of effectively and efficiently completing those tasks that will help the organisation achieve its overall objectives.” —Robbins
“Human resource planning is a process for determining and assuring that the organisation will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved”. —Dale S. Beach
“Human resource planning is the strategy for the acquisition, utilization, improvement and presentation of the enterprises human resource. It relates to establishing job specification or quantitative requirements of jobs, determining the number of personnel required and developing sources of manpower.” —Stainer
Human resource planning consists a series of activities which are as follows:
(i) Forecasting future manpower requirements, either in terms of mathematical projections of trends in the economic environment and development in industry or in terms of judgmental estimates based upon the specific future plans of a company.
(ii) Making an inventory of present manpower resources and assessing the extent to which these resources are employed optimally.
(iii) Anticipating manpower problem by projecting present resources into the future and comparing them with the forecast of requirements to determine their adequacy both quantitatively and qualitatively.
(iv) Planning the necessary programmes of requirement, selection, training, development, utilization, transfer, promotion, motivation and compensation to ensure that future manpower requirements are properly met.
Human Resource Planning – Meaning
Human Resource Management / Personnel Management is concerned with utilizing the “manpower resources” or “human resources” most productively, it is also called as “manpower management” or “human resources management”. Manpower planning is considered as a strategy for the acquisition, utilization, improvement and retention of an enterprise’s human resources.
Thus, the activity of manpower planning is synonymous with personnel management itself. The “Procurement” function of manpower management is basically concerned with having the right type of people available as and when required and improving the performance of the existing people to make them more effective on their jobs. Manpower management thus starts with manpower planning.
Human Resource / Manpower planning involves having the right number and the right kinds of people at the right places, at the right times, doing the right kind of tasks that result in long-run maximum individual and organizational benefits.
According to Sikula, it is the “process of determining human resource requirements and the means of meeting those requirements in order to carry out the integrated plans of the organization”. In the opinion of Vetter, Manpower planning is the “process by which management determines how an organization should move from its current manpower position to its desired manpower position”.
Human Resource / Manpower planning is concerned with anticipating future manpower needs at different levels in the organization by visualizing the future and determining how best the needed manpower can be recruited.
Dale S. Beach States:
“All organizations-those that are expanding, those that are dynamic in character, and those that have a high turnover – must systematically plan their short-term, medium-term and long-term manpower needs”.
Thus, manpower planning may be described as a process of analysing the current and future requirements of human resources for an organization as a basis for forecasting and the formulation of a course of action to ensure that such needs and resources are kept in proper balance.
Human Resource Planning – Definition of Human Resource Planning by Various Authors:
In general usage, manpower planning is a process that seeks to ensure that the right number and kinds of people will be at the right places at the right time in future, capable of doing those things that are needed so that the organization can continue to achieve its goals.
Edwin B. Geisler emphasizes that an adequate definition of manpower planning must recognize the importance of effective utilization, forecasting needs, developing appropriate policies and programmes to meet the needs and reviewing and controlling the total process.
According to him, “Manpower planning is the process (including forecasting, developing, implementing and controlling) by which a firm ensures that it has the right number of people and the right kind of people, at the right places, at the right time, doing things for which they are economically most useful”.
Stainer defines manpower planning as “Strategy for the acquisition, utilization, improvement and preservation of a unit’s manpower resources”.
According to Gordon MacBeth, manpower planning involves two stages- The first stage is concerned with detailed “planning of manpower requirements for all types and levels of employees throughout the period of the plan”, and second stage is concerned with “planning of manpower supplies to provide the organization with the right types of people from all sources to meet the planned requirements”.
Thus, human resources planning or manpower planning is “the process of determining and assuring that the organization will have an adequate number of qualified persons, available at the proper times, performing jobs which meet the needs of the enterprise and which provide satisfaction for the individuals involved.”
Manpower planning is a continuous process. It cannot be rigid or static; it is amenable to modifications, review and adjustments in accordance with the needs of the organization or the changing circumstances. In the opinion of Coleman, “Manpower planning is the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organization”.
Various definitions of manpower planning emphasize the following four factors that are involved in this process:
(i) Forecasting the future needs of manpower
(ii) Developing the sound recruitment and selection procedure
(iii) Proper utilization of available manpower
(iv) Controlling and reviewing the cost of work involved through manpower (Human Resource).
Human resource management is one of the most important responsibilities of the business. None of the business can function properly unless and until they have dedicated and committed employees working for them.
But before managing employees effectively, it is essential to first hire them and select them carefully. For that purpose human resource planning is required. In simple words human resource planning works out an estimate of the number and the nature of people required by an organisation to meet their objectives effectively.
The determination of quality and quantity of personnel required by an organisation rests on the prediction of future workloads. Thus, on the basis of the workforce analysis, it is important to work out the ideal number of people required to meet out the requirements of the business so that as and when the need arise there should be capable people around.
Human resource management work starts with job analysis. It consists of job specification, job description and job evaluation. Job analysis determines the job objectives, the component of duties and responsibilities, performance criteria, and reporting relationships between the employees.
The output of job analysis is the job description that is used in deriving the necessary qualifications (job specifications) of the employee. This is followed by a search for personnel in the outer environment, and screening applicants against requirements to fill open positions.
Qualified job applicant must be found, and this requires decisions on recruiting sources and methods. From among the applicants who have applied for the job, those who meet the job specifications are selected. After hiring, applicants undergo initial training and throughout their careers with the company they receive training and development through various methods.
In order to retain the trained employees and make them contribute their best towards the organisational goals, management constantly design effective compensation and motivation programmes. Finally to give employees maximum satisfaction at work, it is expected from them to monitor their performance and reward them appropriately. So retaining effective employees is one of the most challenging jobs of the HR managers.
Basic activities involved in human resource planning:
i. Forecasting future workforce requirements;
ii. Making an inventory of the existing manpower resources;
iii. Matching quantitatively and qualitatively the right number of people with the right job at the right time and at the right place; and
iv. Preparing a programme of employees’ recruitment, selection, training and development, their utilisation, promotions and transfers, and preparing a plan for rewarding them suitably.
The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. The three key elements of the HR planning process are forecasting labor demand, analysing present labor supply, and balancing projected labor demand and supply.
Human Resource Planning is required to meet the following objectives:
1. To ensure optimum use of human resources currently employed
2. To determine future recruitment level
3. To ensure that necessary resources are available as and when required
4. To forecast future skill requirement to serve as a basis for training and development programmes
5. To create plans, rules and regulations that meets the local and statewide laws in the given industry.
6. To develop manuals and guides for employees and managers to follow, whether they are training manuals or safety guides
7. To cope with changes in market conditions, technology, government policies, etc.
HRP is essential to forecast human resource requirements accurately. Once we are sure about the numbers and the quality of personnel required, it becomes easy to strike a balance between demand and supply.
HR planning helps a firm to cope with changes in market conditions such as competition, technology, regulatory framework, etc. in an effective way. HRP makes it possible for a company to have a vast pool of qualified people for vacancies that are likely to arise now and also in future.
Some of the compelling reasons that favour HRP may be listed thus:
1. Work can be Carried Out Smoothly:
To carry on its work, each organisation needs personnel with the necessary qualifications, skills, knowledge, work experience and aptitude for work. These are provided through effective manpower planning.
2. Internal Supply Position could be Assessed at the Right Time:
Since a large number of persons have to be replaced who have grown old, or who retire, die or become incapacitated because of physical or mental ailments, there is a constant need for replacing such personnel. Otherwise, the work would suffer.
3. Demand-Supply Imbalances could be Arrested:
Human resource planning is essential because of frequent labour turnover which is unavoidable and even beneficial because it arises from factors which are socially and economically sound such as voluntary quits, discharges, marriage, promotions; or factors such as seasonal and cyclical fluctuations in business which cause a constant ebb and flow in the workforce in many organisations.
4. Possible to Cope with Sudden Changes such as Expansion, Diversification, etc.:
In order to meet the needs of expansion programmes human resource planning is unavoidable. It becomes necessary due to increase in the demand for goods and services with growing population, a rising standard of living — larger quantities of the same goods and services are required.
5. Easy to Cope with Changes in Technology:
The nature of the present workforce in relation to its changing needs also necessitates the recruitment of new labour. To meet the challenge of a new and changing technology and new techniques of production, existing employees need to be trained or new blood injected in an organisation.
6. Avoid Ups and Downs in Availability of People with Relevant Skills and Qualifications:
Manpower planning is also needed in order to identify areas of surplus personnel or areas in which there is a shortage of personnel. If there is a surplus, it can be redeployed; and if there is shortage, it may be made good.
Human Resource Planning – Short Term and Long Term
The main object of human resource planning is to match the jobs and individuals in an organization. The process of matching jobs with individuals is undertaken in short and long runs in different ways. Therefore, there are two main forms of manpower planning on the basis of time-span, i.e., short- term manpower planning and long-term manpower planning.
Short-term manpower planning, as the name suggests, is made for a short time, i.e., for a period of not more than two years. It involves the matching of present employees with-their present jobs so that they must perform their functions efficiently. Short-term plans are more concerned with specific projects and programmes and the existing workforce must be adjusted to match the requirements of the specific projects and programmes. It is naive to expect a perfect match between jobs and individuals.
An appraisal of the existing stock of employees may reveal that either they have less abilities and skills than the requirement or some of them are more qualified or have unused talents. In the short-run, it is not possible either to change the personnel to suit the jobs or to create or eliminate jobs to suit the personnel. It is necessary to match the individuals with jobs as best as possible.
When the existing personnel is not according to the specifications of the jobs, or when they are less qualified than the requirements, there are four options or approaches for matching jobs and individuals:
(i) Providing Training:
This approach focuses on changing the individual by improving his ability through education, training and counselling. Thus he may become more suitable for the job.
(ii) Changing the Contents of the Job:
This approach focuses on withdrawing a duty from one position and assigning it to some other related position.
(iii) Changing the Job and the Individual:
This approach is a combination of the above two approaches i.e. both the job and the individual can be adjusted to each other by firstly improving the ability of the individual through training and secondly shifting a duty from one position to another.
(iv) Separation or Removal of the Incumbent:
When the first-three approaches fail, then only the last option to remove the incumbent should be tried.
When the existing personnel is more qualified or have greater abilities than their present jobs require, then again there is a problem of matching jobs with the individuals because a portion of individuals’ abilities remains unutilized.
In order to utilize the skills, talents, potentials and abilities of the individuals to the fullest extent, the following adjustments can be made:
(i) Job Enlargement:
An individual may be assigned some additional but related duties beyond his assigned sphere.
(ii) Assigning some Special Problems:
Capable individuals should be given some special problems and asked to help in problem-solving.
(iii) Additional Activities:
If an individual is having special know how or specific knowledge, additional activities can be made part of his job.
(iv) Seeking Counsel and Advice:
This is yet another way to utilize the abilities and talents of a capable individual.
(v) Promotion to Higher Position if Vacant:
This is a better course of action.
Short-term manpower planning also deals with filling up of posts falling vacant due to some unexpected reasons such as resignation, death or some other social reason. Since these unexpected factors are not known in, advance, there is again the problem of matching jobs and individuals. Some temporary arrangement has to be made for the vacant positions either through promotion or through training.
Long-term manpower planning is a planning of personnel for more than two years. In the long-run, the management has sufficient time gap to take necessary steps so as to make this matching process a calculated exercise. It is concerned with all jobs and persons at once-with matching complete roster of personnel to total job requirements. It is more concerned with filling future vacancies rather than matching the present incumbents to present jobs.
Essentially it involves the following four elements:
(i) Projecting Manpower Requirements
(ii) Manpower Inventory and Analysis
(iii) Recruitment and Selection
(iv) Management Training and Development
Thus, short-term and long-term manpower planning differ in their emphasis and content.
The importance of systematic and comprehensive man-power planning (or HRP) may be ascertained from the following points:
1. Man-power planning is essential for determining present and future personnel needs of the organisation.
2. It helps the organisation to cope with changes in competitive forces, markets, technology, products etc.
3. It ensures optimum use of available human resources.
4. It provides adequate control measures to ensure that necessary man-power is available as and when required.
5. It anticipates redundancies of labour force and avoids unnecessary dismissals.
6. It is a continuous process concerned with planning and development of human resources.
7. It is a process of getting the right number of qualified people into the right jobs at the right time.
8. It is the system of matching the supply of people internally (existing employees) and externally (those to be employed in future) over a given period of time.
9. It helps the organisation to function smoothly and successfully not only in the short-period but also in the long period.
10. It enables the organisation to cope with changes in competitive markets, market forces, technology, products etc.
11. Man-power planning is an essential component of strategic planning.
Modern managements have thus realised that the long-term success of any firm ultimately depends upon having the right people in the right jobs at the right time. Further, they have also realised that the organisational goals and the various strategies to achieve these goals are meaningful only when people with the appropriate talent, skill, desire and ambition are available to carry out these strategies to achieve the missions. That is why good man-power planning paves way for smooth and successful functioning of an organisation in both short- period and long-period.
Human resource planning is attaining increasing importance in modern days because of the following reasons:
1. Peculiar Employment Situation:
In a country like India, on the one hand, the number of educated unemployed has been increasing but on the other hand, there has been acute shortage of variety of skilled and talented personnel. Therefore there is a great need for more effective recruitment and retraining of the people.
The shortage of skilled, talented and technically trained people in under- developed countries has become a major obstacle to their industrial development. These countries have to import such skilled personnel but only at a high cost of foreign exchange.
2. Technical and Technological Changes:
Production technology, marketing methods, management techniques etc. have been changing rapidly with profound effects on the contents and contexts of jobs. Such rapid and widespread changes have created difficult problems relating to redundancies, retraining and deployment of the existing personnel. Therefore, systematic human resource planning is required to help the management solve these problems.
3. Organisational Changes:
The size of the firms and their organisational structure as well as the volume of their business have been increasing on a large scale. Business environment has also been changing rapidly because the factors which affect this environment have also been changing rapidly. These changes have necessitated systematic human resource planning so that the firms can solve their manpower problems successfully.
4. Demographic Changes:
The profile of the labour force in terms of age, sex, education, technical skills, social background, economic conditions etc. has also been changing continually. These changes have necessitated systematic human resource planning as it is the only way to solve manpower problems.
5. Labour Laws:
A large numbers of labour laws have been enacted by the Government to protect and promote the interest of the labour force. These laws relate to working conditions, payment of wages, employment of women and children, casual and contact labour, bonus, compensation in case of accidents, retirement and sickness benefits etc.
These laws have imposed a number of restrictions on the management and hence the management is not free now to hire and fire labour at free will. Therefore the management is required to look ahead and foresee the manpower problems with the help of human resource planning.
6. Pressure Groups:
Trade unions, politicians, scheduled castes and tribes and other backward classes and displayed persons bring heavy pressure on the management for internal recruitment and recruitment of the people belonging to the reserved categories, promotions etc. This has become a very difficult problem for the management and hence it has to undertake systematic manpower planning which can solve such a problem.
7. Information Technology:
In modern days, information technology and systems thinking have emphasised the importance of human resource planning in order to solve the problems of IT (Information Technology) successfully.
8. Increased Mobility of Labour:
In a democratic country like India, employees enjoy unrestricted mobility. Because of increasing mobility of labour, it becomes difficult for the organisations to retain the talented labour force. But effective and intelligent manpower planning helps to reduce labour turnover.
Factor # 1. Type and Strategy of Organization:
The nature and scale of organization determines the number and type of human resources required at the managerial and supervisory levels. In case of a manufacturing organization, there will be requirement of more employees as compared to a service organization. Similarly, HRP depends upon the organization’s strategy also.
If an organization wants to adopt the strategy of internal growth, then more personnel are required. On the other hand, in case of Mergers and Acquisitions (M&As), HR manager must make plans regarding layoffs, retrenchment, etc.
In determining the breadth of the plan, organization can choose a narrow focus by planning in just one or two areas of HR like recruitment and selection. Otherwise, it can choose a broad focus by planning in all HR areas including training and development, compensation, maintenance, etc.
Factor # 2. Organizational Growth Cycles and Planning:
Various stages of organizational growth cycles influence the HRP. In the inception stage of the organization, there may not be any personnel planning. When the organization enters the growth stage, then HR forecasting becomes necessary. More people are needed. When an organization becomes mature then growth slows down.
There is less flexibility and more formalized plans are there. Organization may be planning about issues like retirement, etc. In the last stage, i.e., the declining stage, the focus of HRP is different. Here, planning is done about lay-offs, retrenchment and offering VRS.
Factor # 3. Environmental Uncertainties:
An organization does not operate in isolation. Environmental factors such as economic, political, socio-cultural, international conditions, etc. affect all organizations and thus HRP. All this necessitates changes to be made while formulating recruitment, selection and training and development programmes.
Factor # 4. Time Horizons:
Time factor also affects HRP. Planning about human resources will be different in case of a short-term period (ranging from six months to one year) and in case of a long-term plan (which spread from three to ten years).
Factor # 5. Nature of Jobs being Filled:
Vacancies in the organization may be due to retirement, promotion, transfer, demotion, expansion and diversification decisions. HR manager should be well aware in advance regarding the nature of job. For example, it is relatively easy to fill the vacancies of low-level workers than any managerial position.
Factor # 6. Off-Loading the Work:
Off-loading the work to outside parties through outsourcing, etc., is a regular feature in today’s business environment. Thus, it affects decisions like further hiring, offering VRS to surplus labour, etc.
Human resource planning is the responsibility of the personnel department. In this task, it is aided by the industrial engineering department, the top management and the team of directors of different departments. It is mostly a staffing or personnel function.
The over-all responsibility lies with the Board of Directors because, as the manpower planning scheme of Hindustan Lever indicates, “these members are in a position to direct the future course of business, set appropriate goals for the management concerned in the formulation of personnel policies.”
The personnel department’s responsibility is “to recommend relevant personnel policies in respect of manpower planning, devise methods of procedure, and determine the quantitative aspects of manpower planning.”
The responsibilities of the personnel department in regard to manpower planning have been stated by Geisler in the following words:
(i) To assist, counsel and pressurise the operating management to plan and establish objectives;
(ii) To collect and summarise data in total organisation terms and to ensure consistency with long-range objectives and other elements of the total business-plan;
(iii) To monitor and measure performance against the plan and keep the top management informed about it; and
(iv) To provide the research necessary for effective manpower and organisational planning.
The manpower plan can be broken down into three components:
(i) Forecasting estimating future needs and stock taking of available resources in the organisation;
(ii) Recruitment plan, to meet the gap between the internal resource and estimated need by external recruitment;
(iii) Training and Development plan to utilise fully the human resources of the organisation and to develop the potential resources.
In practice it has been found that short-term (under 2 years) and medium- range plans (2 to 5 years) are easier to formulate with greater degree of certainty.
It usually grows out of normal budgetary processes. The key steps in the short-term forecasting/planning process.
The parameters of short-range forecasting usually are fairly well-defined. They are handled in the normal course of budget preparation and require simple arithmetic calculations. Long-range planning is more complex and is dependent upon mathematical and statistical models, as knowledge of demand variables and appropriate measurement techniques.
Two general kinds of forecasting techniques are used- indirect and direct methods. Indirect methods involve the forecasting of general rules production figures, for example that must be translated into specific requirements or measures. Direct techniques involve the use of methods of estimate (directly) labour hours, number of supervisors or particular occupational needs.
Aggregate models are based on several key variables that are known to directly affect the organisation’s overall human resource needs. Every organisation has special characteristics or problems, and a planner can use an aggregate model to get the big picture. These models may apply to a geographic region or to the overall system.
Estimates techniques models are used for situations where circumstances make it difficult to use mathematical or statistical approaches. Here expert opinion and experience are used. The volume of future activity of business conditions, including legislation, change, innovation, or competition situations that are almost impossible to qualify can provide workable answers to problems.
At the end, it may be noted that all organisations those that have a high labour turnover must systematically plan their short-term, medium-term and long- term manpower needs. These requirements need periodical reviews and adjustments to meet changing conditions.
Human Resource Planning – Functions
Human resource planning involves planning to satisfy a firm’s needs for employees. It consists of three tasks:
1. Forecasting staffing needs
2. Job analysis
If staffing needs can be anticipated in advance, the firm has more time to satisfy those needs. Some needs for human resources occur as workers retire or take jobs with other firms. Retirement can be forecasted with some degree of accuracy, but forecasting when an employee will take a job with another firm is difficult.
Additional needs for employees result from expansion. These needs may be determined by assessing the firm’s growth trends. For example, if the firm is expected to increase production by 10 percent (in response to increased sales), it may prepare for the creation of new positions to achieve the projected production level. Positions that handle accounting and marketing-related tasks may not be affected by the increased production level.
If the firm foresees a temporary need for higher production, it may avoid hiring new workers, since it would soon have to lay them off. Layoffs not only affect the laid-off workers but also scare those workers who are still employed. In addition, firms that become notorious for layoffs will be less capable of recruiting people for new positions.
If firms avoid hiring during a temporary increase in production, they must achieve their objective in some other way. A common method is to offer overtime to existing workers. An alternative method is to hire temporary workers for part-time or seasonal work.
Once new positions are created, they must be filled. This normally involves job analysis and recruiting.
Before a firm hires a new employee to fill an existing job position, it must decide what tasks and responsibilities will be performed by that position and what credentials (education, experience, and so on) are needed to qualify for that position.
The analysis used to determine the tasks and the necessary credentials for a particular position is referred to as job analysis. This analysis should include input from the position’s supervisor as well as from other employees whose tasks are related.
The job analysis allows the supervisor of the job position to develop a job specification and job description. The job specification states the credentials necessary to qualify for the job position. The job description states the tasks and responsibilities of the job position.
People who consider applying for the job position use the job specification to determine whether they could qualify for the position and use the job description to determine what the position involves.
Firms use various forms of recruiting to ensure an adequate supply of qualified candidates. Some firms have a human resource manager (sometimes called the “personnel manager”) who helps each specific department recruit candidates for its open positions. To identify potential candidates for the position, the human resource manager may check files of recent applicants who applied before the position was even open.
These files are usually created as people submit their applications to the firm over time. In addition, the manager may place an ad in local newspapers. This increases the pool of applicants, as some people are unwilling to submit an application unless they know that a firm has an open position.
Increasingly, companies are also listing positions on their websites. Dell, Inc., uses the Internet extensively in its human resource planning. For example, the company allows potential employees to search for a specific job at its website. Dell also allows applicants to submit their resumes over the Internet.
Furthermore, Dell uses its website to provide potential employees with information about benefits and about the areas where its plants and employment sites are located, such as cost-of-living estimates.
Most well-known companies receive a large number of qualified applications for each position. Many firms retain applications for only a few months so that the number of applications does not become excessive.
Internal versus External Recruiting:
Recruiting can occur internally or externally. Internal recruiting seeks to fill open positions with persons already employed by the firm. Numerous firms post job openings so that existing employees can be informed. Some employees may desire the open positions more than their existing positions.
Internal recruiting can be beneficial because existing employees have already been proven. Their personalities are known, and their potential capabilities and limitations can be thoroughly assessed. Internal recruiting also allows existing workers to receive a promotion (an assignment of a higher-level job with more responsibility and compensation) or to switch to more desirable tasks.
This potential for advancement can motivate employees to perform well. Such potential also reduces job turnover and therefore reduces the costs of hiring and training new employees. Many of the employees that Walt Disney hires for management positions are recruited internally. Wal-Mart has established a “first-in-line” program that.it uses to promote its employees to managers, as explained in a recent annual report:
“The Customer-centered Wal-Mart culture must be embraced by thousands of new Associates if the Company is to keep growing. One way we’ll retain that culture is by continuing to recruit nearly 70 percent of our management from the ranks of hourly workers. When room is available, college students who are working for Wal-Mart are the first considered for management jobs.” —Wal-Mart Corporation
Firms can do more internal recruiting if their employees are assigned responsibilities and tasks that train them for advanced positions. This strategy conflicts with job specialization because it exposes employees to more varied tasks.
Nevertheless, it is necessary to prepare them for other jobs and to reduce the possibility of boredom. Even when a firm is able to fill a position internally, however, the previous position that the employee held becomes open, and the firm must recruit for that position.
External recruiting is an effort to fill positions with applicants from outside the firm. Some firms may recruit more qualified candidates when using external recruiting, especially for some specialized job positions.
Although external recruiting allows the firm to evaluate applicants’ potential capabilities and limitations, human resource managers do not have as much information as they do for internal applicants.
The applicant’s resume lists previously performed functions and describes the responsibilities of those positions, but it does not indicate how the applicant responds to orders or interacts with other employees. This type of information is more critical for some jobs than others.
The recruiting process used to screen job applicants involves several steps. The first step is to assess each application to screen out unqualified applicants. Although the information provided on an application is limited, it is usually sufficient to determine whether the applicant has the minimum background, education, and experience necessary to qualify for the position.
Recruitment software programs eliminate the need for individuals to read and categorize every resume received. In the past, human resource employees had to sift through numerous resumes to find potential matches for open positions. Resumes that were not an appropriate match were thrown out after a specified amount of time. Recruitment software has reduced costs by creating a more efficient system.
Resumes are either received electronically or scanned into the computer and keywords are used to sort them. Human resource departments or the hiring manager can use the software’s searching capabilities to identify specific skill or experience requirements.
The system also allows for the creation of a database of applicants. This technology allows human resource professionals to spend more time conducting interviews and other important tasks rather than sorting, categorizing, and filing resumes.
The second step in screening applicants is the interview process. Some firms conduct initial interviews of college students at placement centers on college campuses. Other firms conduct initial interviews at their location.
The human resource manager uses the personal interview to assess the personality of an applicant, as well as to obtain additional information that was not included on the application.
Specifically, an interview can indicate an applicant’s punctuality, communication skills, and attitude. Furthermore, an interview allows the firm to obtain more detailed information about the applicant’s past experience.
If the first two screening steps can substantially reduce the number of candidates, the human resource manager can allocate more time to assess each remaining applicant during the interview process. Even when these steps have effectively reduced the number of candidates, however, the first interview with each remaining candidate will not necessarily lead to a selection.
A second and even third interview may be necessary. These interviews may involve other employees of the firm who have some interaction with the position of concern. The input of these employees can often influence the hiring decision.
A third step in screening applicants is to contact the applicant’s references. This screening method offers limited benefits, however, because applicants normally list only those references who are likely to provide strong recommendations.
A survey by the Society for Human Resource Management found that more than 50 percent of the human resource managers surveyed sometimes receive inadequate information about a job applicant’s personality traits. More than 40 percent of these managers said that they sometimes receive inadequate information about the applicant’s skills and work habits.
Another possible step in the screening process is an employment test, which is a test of the candidate’s abilities. Some tests are designed to assess intuition or willingness to work with others. Other tests are designed to assess specific skills, such as computer skills.
Until recently, some firms also requested a physical examination for candidates they planned to hire. Now however firms may request a physical examination only after a job offer has been made.
This examination can determine whether the individual is physically able to perform the tasks that would be assigned In addition, the examination can document any medical problems that existed before the individual was employed by the firm. This can protect the firm from being blamed for causing a person’s medical problems through unsafe working conditions.
Along with physical examinations, some firms ask new hires to take a drug test. Firms are adversely affected in two ways when their employees take illegal drugs. First, the firm may incur costs for health care and counselling for these employees. Second, the performance of these employees will likely be poor and may even have a negative effect on the performance of their co-workers.
Some firms outsource the task of screening job applicants. For example, Bristol-Myers Squibb Company relies on the company MRI to identify and screen its job applicants. MRI organizes recruiting conferences, where it identifies candidates who may be suitable for the positions that Bristol-Myers Squibb and other firms need to fill.
Make the Hiring Decision By the time the steps for screening applicants are completed, the application list should have been reduced to a small number of qualified candidates. Some firms take their hiring process very seriously because they recognize that their future performance is highly dependent on the employees that they select, as documented by the following statement-
“The past year’s success is the product of a talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar high [high standards] in our approach to hiring has been, and will continue to be, the single most important element of Amazon(dot)com’s success.” —Amazon(dot)com
Careful screening enables firms to recruit people who turn out to be excellent employees. Consequently, careful recruiting can result in low turnover.
Once the screening is completed, the top candidate can be selected from this list and offered the job; the remaining qualified applicants can be considered if the top candidate does not accept the job offer. Once hired, the new employee is informed about the firm’s health and benefits plans and additional details of the job.
When recruiting candidates for a job position, managers should not discriminate based on factors that are unrelated to potential job performance. First, such discrimination is illegal. Second, discrimination may reduce the efficiency of the employees in the workplace.
Federal laws prohibit such discrimination.
The following are some of the laws enacted to prevent discrimination or improper treatment:
(i) The Equal Pay Act of 1963 states that men and women performing similar work must receive the same pay.
(ii) The Civil Rights Act of 1964 prohibits discrimination based on race, gender, religion, or national origin.
(iii) The Age Discrimination in Employment Act of 1967, amended in 1978, prohibits employers from discriminating against people who are 40 years old or older.
(iv) The Americans with Disabilities Act (ADA) of 1990 prohibits discrimination against people who are disabled.
(v) The Civil Rights Act of 1991 enables women, minorities, and disabled people who believe that they have been subject to discrimination to sue firms. This act protects against discrimination in the hiring process or the employee evaluation process. It also protects against sexual harassment m the workplace.
Overall, the federal laws have helped to encourage firms to make hiring decisions without discriminating.
While the federal laws can penalize firms for discriminating, many firms now recognize the potential benefits of a more diverse workplace. These firms strive for diversity not just to abide by the laws, but because it can enhance their value. .
Diversity can benefit firms in three ways. First, studies have shown that employees who work in a diverse workplace tend to be more innovative. Second, employees in a diverse workplace are more likely to understand different points of view and be capable of interacting with a diverse set of customers.
The proportion of a firm’s customer base that consists of minorities will continue to increase. Third, a larger proportion of eligible employees will be from minority groups in the future.
Data from the U.S. Census Bureau illustrate how the number of minority customers and eligible minority employees has grown and will grow in the future. During the period 1990-2000, the white population in the United States increased by 3.4 percent; the African American population increased by 16 percent; the Native American population, by 15 percent; and the Hispanic population, by 50 percent.
Thus, U.S. population growth is heavily dominated by minority groups. Together, these three minority groups represent 25 percent of the U.S. population now, and by the year 2050, they are expected to represent 38 percent.
By the year 2025, minority groups will in aggregate represent the majority of the population in some states. The total college-age population in the United States is expected to grow by 16 percent by the year 2015, and minorities will account for 80 percent of this growth.
Hispanics will account for half of the growth in the minority college-age population, while African Americans and Native Americans will make up the remainder. Thus, firms that create a diverse workplace will be able to match the more diverse customer base that will develop over time and will have better access to the pool of eligible employees.
Human Resource Planning – Steps Involved in Human Resource Planning Process
The purpose of effective human resource planning is to ensure that a certain desired number of persons with the correct skills will be available at some specified time in future.
The various steps involved in the human resource planning process can be logically divided into three:
Step 1 – Working out the human resource demand forecasting;
Step 2 – Working out the human resource supply forecasting;
Step 3 – Initiating human resource actions.
Step 1- Human Resource Demand Forecasting:
The process of human resource planning starts with the forecasting of human resource requirement because it is always important for the management to first identify clearly the number of people required in future and then the entire process starts.
Resource demand forecasting is often subdivided into long-range and short-range forecasts because there are certain requirements of human resources for the long term and at times the human resource requirement is to meet the short-term objectives, goals, or targets.
i. Long Range Forecasting:
Though it is difficult to forecast the exact number of people required for future, still those responsible for planning human resource requirements must be aware of the number of basic factors which should be taken into consideration so that the forecasting can turn out to be accurate to a certain extent-
a. The Firm’s Long-Range Business Plans:
It is important to know the long-range business plans for the firm, for example, if a firm wants to go in for automation or wants to bring in more of computers and replace the manpower with technology, this factor needs to be taken into consideration for working out the future manpower requirements.
The likely changes taking place in the demographic profile of people in the years to come is another important parameter which needs to be taken into consideration while working out the human resource requirements as the overall rate of growth of the labour force depends to a large extent on the percentage of population in the age group of 18 to 65.
c. The Economic Conditions:
Movements from prosperity to recession and back to prosperity pose considerable problems for the HR executives. Though economic predictions are considerably difficult to make with accuracy, some considerations must be given to the level of economic activity in planning for human resource requirements.
d. Technological Trends:
Advances in technology have definite effects on the nature and mixture of jobs available. For example, advances in computer technology resulted in a decrease ill the number of book-keepers, and an increase in the number of computer programmers. The use of robots in place of some kind of human labour is also beginning to take off.
e. Social Trends:
The socio-cultural trends prevailing in an economy are another important parameter effecting the human resource planning as it directly influences the number and the nature of people seeking jobs, especially in case of women and people from minority groups. The social factors also play an important role in affecting the movement of labour from rural to urban areas which again has its impact on the human resource planning.
In considering the above factors and making a specific long-range projection, one method that can be utilised is termed as the “Delphi technique.” Essentially, it is a questionnaire technique in which recognised experts are asked to make separately specific estimates of human resource needs in the future.
This is followed by feedback of summarised results, followed by a request for a new estimate. After three or four iterations, there tends to be some similarity in specific future estimates of all the exports. In effect, it is a “judgment refining” process, but the numbers resulting should still be regarded with considerable suspicion.
ii. Short Range Forecasting:
Though long-range planning may appear to be a luxury to most firms, the HR executives does require some lead time to provide the manpower required by the firm in the short run-
a. Production Schedules and Budgets:
Specific sales forecast for the coming year must be translated into a work plan for the various parts of the enterprise. In the light of the sales forecast the requirements of manpower for all other departments need to be worked out in the light of the production program, purchase requirements, research and development and finance department activities.
Some plans must be made concerning the amount of work that each segment of the firm is expected to accomplish during some coming period and manpower requirements need to be worked out accordingly.
b. Human Resource Objectives:
The basic goals or objectives to be followed by the human resource department also play an important role in working out the human resource requirements. For example if the goal is to hire some minimum percentage of minorities or females in the workforce this definitely will be taken into consideration while working out the human resource plan.
c. Relocations/Mergers/Acquisitions/Plant Closures:
The recession of the early 1990s saw major retrenchments on the part of many firms. The reductions in workforce that follows such major changes as mergers, acquisitions, relocations or plant closures are particularly stressful for not only the employees involved but also for the HR executives.
The HR people should always be informed about such changes as soon as possible so that they should be able to make arrangements to adjust the manpower wherever required and ensure the termination of employees in a nice and congenial atmosphere.
Thus, resource demand forecasting, whether long-range or short-range gives the management an idea about the number and nature of people required in future and the human resource planning process starts from here.
Step 2 – Human Resource Supply Forecasting:
Though the available supply of human talent would appear to be easier to determine than projected needs, there are a number of complexities in this decision as well.
In projecting future availability, the following factors are usually considered:
I. Current Inventory:
Maintaining proper personnel records are essential to indicate the availability of talent in various jobs, units and divisions within the firm. For example, an ‘inventory card’ should be maintained by the organisations, so that whenever there is a requirement for human resource the first thing an organisation should do is to check the availability from within.
If possible the requirements should be filled in from within and if not possible then the entire hiring process should start.
II. Productivity Levels:
Future projection of resource needs are often made on the basis of past experience. As technology improves the productivity levels of a workforce, the number of persons required per unit of output will decline. So it is important for the organisation to consider the productivity levels to forecast the future workforce requirements.
III. Turnover Rate:
The rate of turnover for the organisation is an important parameter affecting the human resource planning for future. The turnover takes into consideration separations, quits, discharges, retirement, death, replacements, etc. The rate of turnover can be calculated with the help of formula, such as,
Number of people leaving the organisation/average number of persons in the organization × 100
Turnover rate has to be taken into consideration because the management will be making the arrangements for future manpower requirements keeping this into mind. An organisation having a high rate of turnover will have to go for frequent hiring exercises and vice versa.
IV. Absenteeism Rate:
Absenteeism is the title given to a condition that exists when a person fails to come to work when properly scheduled to work.
The most common measure is the percentage of scheduled time lost and is computed as follows:
Number of person-days lost / (average number of persons) × (number of working days) × 100
Absenteeism obviously reduces the number of personnel actually available for work. If the monthly absenteeism rate is around 4 per cent, this means that on the average only 96 per cent of people are present each day and are ready to work.
V. Movement among Jobs:
Some jobs are sources of personnel for other jobs; for example, secretaries may be obtained by the promotion of typist, and branch managers are obtained from a pool of section managers through internal transfers. So it is important for the human resource executives to take such internal movements into account before finalising the requirements for hiring from outside for meeting their future human resource requirements.
All these factors clearly necessitate the need to take various things into account while working out the resource supply for future.
Step 3 – Initiating Human Resource Actions:
The matching of projected human resource needs with projected human resource available provides the basis for undertaking various actions to ensure that supply will be able to match with demand at the time specified.
Such actions as the following can be undertaken:
In case projected supply is short of projected demand; the addition of new personnel is a likely possibility. Keeping the rate of turnover and absenteeism and the movement amongst various jobs into account the organisation has to work out the figures for conducting their recruitment and selection drive.
II. Training and Development:
In order to sharpen the skills of people on the job and to prepare them for transferring them to higher positions in future it is important to impart training and development to them constantly.
III. Career Management:
It is to the advantage of both the employee and the firm that changes in job assignments be planned to form a career. HR department should have some system of recording and tracking career moves throughout the organisation.
IV. Productivity Programs:
Improving productivity levels will increase the supply of human resources available without increasing the number of personnel. Organised labour has also been involved in the process to participating in improved quality of work life programs, and agreeing to alter various work rules that hold down productivity.
V. Reductions in Workforce:
In case the projected supply of human resources is in excess of projected demand; the firm may have to close plants and lay off personnel. A reduction in workforce is always a difficult process for everyone – the employee, the management, the union, the government, and the community. But in a competitive economy of today, such human resource actions are not uncommon. So they need to be handled carefully.
Human Resource Planning – Implementation
Labour demand forecasts affect a firm’s progress in many different areas including recruitment, selection, performance appraisal, training, transfer and other career enhancement activities. These activities all constitute action programmes. Action programmes help organizations adapt to changes in the environment.
Some activities included in the action programmes are:
1. Recruitment plans- Recruitment plans indicate the number and type of people required at the specified time period. The recruitment plan will have a direct link with human resource plan and the management will develop strategies accordingly.
2. Selection and promotion plans- Organizations’ strategy will always be to select employees who have already developed the skills necessary to perform competently.
3. Training plans- Training plans indicate the number of employees at all levels who will undergo training and identify the need for training. This is directly linked to organizational growth plans and future strategies.
4. Retention plans- Retention plans indicate reasons for employee turnover and show strategies to avoid wastage through compensation policies or changing working conditions.
5. Appraisal plans- An appraisal system can be strengthened when the selection process selects competent employees and the system of functioning motivates the employee for enhanced performance.
6. Redeployment plans- Redeployment plans identify the employees who need to be transferred, trained, or relocated because of technical obsolescence or overstaffing.
7. Downsizing plans- Downsizing is a step taken by the management to offload overstaff by identifying redundancies and resorting to voluntary retirement schemes, golden handshake, layoff, etc.
In essence, human resource planning is usually done for a short-term period and for a long-term period. Short-term planning usually aims at meeting exigencies, arising out of sudden deaths or resignations. Keeping the replacement charts ready is one way to handle the short-term requirements. Little training at certain levels or times might take care of inadequacies in the short-term planning process.
Long-term planning is usually done for a period of about five years. In the long run, it is possible to develop management systems for existing as well as new jobs.
However, the planning process has some inherent limitations and problems:
1. Problems of accuracy- It may be an ambitious venture to predict workforce demands for the future, as it is linked to many uncontrollable factors. Changing trends, as we are witnessing now, is a good example of such factors, which involves a complete shift in the nature of work plans, etc.
2. Emphasis on quantitative aspects- The forecasting methods are highly, dependent on quantitative methods, and the work-related human aspects such as motivation, morale, career goals, etc. are ignored.
Some of the important benefits of HRP may be listed thus:
1. Upper management has a better view of the human resources dimensions of business decisions;
2. Personnel costs may be less because management can anticipate imbalances, before they become unmanageable and expensive;
3. More time is provided to locate source talent;
Better opportunities exist to include women and minority groups in future growth plans;
4. Better planning of assignments to develop managers can be done; Major and successful demands on local labour markets can be made.
5. Human resource planning is practically useful at different levels, as stated by Narayan Rao.
According to him:
i. At the national level, it is generally done by the Government and covers items like population projections, programme of economic development, educational facilities, occupational distribution, and growth, industrial and geographical mobility of personnel.
ii. At the sector level, it may be done by the Government — Central or State — and may cover manpower needs of agricultural, industrial and service sector.
iii. At the industry level, it may cover manpower forecast for specific industries, such as engineering, heavy industries, consumer goods industries, public utility industries, etc.
iv. At the level of the individual unit, it may relate to its manpower needs for various departments and for various types of personnel.
Human Resource Planning – Problems and Limitations
Human Resource Planning is no doubt an important tool of Human Resources Management; however, it suffers from certain problems and limitations. The basic inherent limitation lies with forecasting itself. Manpower planning usually suffers from inaccuracy since it is difficult to prepare long-range forecasts accurately.
Changes in economic conditions, technology, marketing and workforce conditions etc. tend to make long-range forecasts rather unreliable. Again, the methods of planning, if faulty, may create problems. Inaccuracies of forecasting may result if forecasts from various operating divisions are merely added together without a critical scrutiny.
Another important point is that though it is possible to predict with reasonable degree of accuracy the future vacancies in the organization resulting from retirements, deaths, and resignations, yet it is more difficult to anticipate which particular member of the personnel will be required to be so replaced.
It may give rise to certain problems if action is taken based on general estimates of personnel instead of specific ones. Last, but not the least it is important to note that lack of top management support may sometimes lead to frustration in those who are carrying out the manpower planning.
Human Resource Planning – Guidelines
In order to ensure effective human resource planning it is important for every organisation to take care of certain essential guidelines, as given below:
1. Support and Approval of Top Management:
The human resource planning can be effective only with the support, involvement and approval of the top management. It needs to be carried out in the light of guidelines prescribed by the top management.
The human resource planning period should be appropriate to the needs and circumstances of the specific enterprises. The size, structure, and the changing aspiration of people should also be taken into consideration.
3. Specific Plans:
Human resource plans should be specific in nature keeping the corporate objectives, strategies, and environment into consideration.
4. Coordinated Effort:
Human resource planning requires active participation and coordinated effort of all the operating executives. Such participation will help to improve understanding of the process and thereby reduce resistance.
5. Effective Information System:
Effective information system should be maintained by the organisation to ensure adequate database of human resources to facilitate human resource planning.
6. Balanced Approach:
The quality and quantity of human resources should always be stressed in a balanced manner. The emphasis should always be placed to forecast the future requirements effectively so that as and when the need arises the right type and number of people is available to fill in the vacancies.
To conclude, after conducting a thorough human resource planning the human resource department has clarity regarding the quantity as well as the quality of manpower required in future, but before they get into the recruitment and selection procedure to hire such employees it becomes important for the management to have a clear-cut understanding about the nature of the job for which the selections have to be made.