ANU

• Human Resource Planning


  The process of determining future employee needs and deciding steps or strategies to achieve those needs for the purpose of accomplishing organization goals and objectives
• Importance of HR planning

  • To determine future employee needs (employee demand)
  • To utilize human resources more efficiently and effectively
  • To control employee cost (possible to know in advance employee surplus or shortage)
  • To develop highly competent managerial and professional employees
  • To formulate and implement strategic plans
• Generic goal of HR planning

  To generate and retain in appropriate and contented employee force which gives the maximum individual contribution to organizational success
• HR planning


  The process of assessing the organization's human resource needs in the light of organizational goals and making plans to ensure that a competent, stable workforce is employed
• HR planning


  A strategy for the acquisition, utilization, improvement and retention of the human resources required by the enterprise in pursuit of its objectives
• HR planning


  • Matching resources to business needs in the longer term, although it will sometimes address shorter term requirements
  • Addressing human resource needs both in quantitative and qualitative terms
• HR planning


  A form of risk management that involves realistically appraising the present and anticipating the future in order to get the right people into the right jobs at the right time and managing employee behaviour, organization culture and systems in order to maximize the human resource in response to anticipated opportunities and threats
• HR planning process


  1. Forecast future demand for HR

  2. Estimate HR supply

  3. Compare forecast demand with estimated supply

  4. Develop strategies to be taken

  5. Assess HRP effort
• Demand forecasting


  The process of estimating the future numbers of people required and the likely skills and competences they will need
• Causes of demand for human resources

  • Demand for the product
  • Strategic Plan of the Organization
  • Production method
  • Retirements
  • Resignations
  • Deaths
  • Leaves of absence
  • Termination
  • External factors such as economic, social and political forces
• Quantitative methods for forecasting demand

  • Trend Analysis
  • Ratio Analysis
• Qualitative approaches to demand forecasting

  • Management Forecasts
  • Delphi Technique
• The Delphi Technique


  1. Leader identifies judgment issues and develops questionnaire

  2. Prospective participants are identified and asked to cooperate

  3. Leaders send questionnaire to willing participants, who record their judgments and recommendations and return the questionnaire

  4. Leaders compiles summaries and reproduces participants' responses

  5. Leader sends the compiled list of judgment to all participants

  6. Participants comment on each other's ideas and propose a final judgment

  7. Leader looks for consensus

  8. Leader accepts consensus judgment as group's choice
• The Sri Lankan Government wanted to forecast personnel needs for class II (Grade II) of the Sri Lankan Administration Service for the next three years


  • Round 1: Expert A 33, Expert B 45, Expert C 50, Expert D 40, Expert E 60
  • Round 2: Expert A 38, Expert B 42, Expert C 40, Expert D 50, Expert E 55
  • Round 3: Expert A 40, Expert B 41, Expert C 42, Expert D 42, Expert E 45
  • Final Estimation: 210/5 = 42
• Forecasting supply of human resources

  Measures the number of people likely to be available from within and outside the organization, having allowed for attrition (labour wastage and retirements), absenteeism, internal movements and promotions, and changes in hours and other conditions of work
• Sources of internal labor supply

  • Qualifications Inventories
  • Personnel Replacement Charts
  • Position Replacement Charts
  • Computerized Information Systems
• Factors influencing the external labor supply

  • Demographic changes in the population
  • National and regional economics
  • Education level of the workforce
  • Demand for specific employee skills
  • Population mobility
  • Governmental policies
• Sources of information about external labor markets

  • Department of Labor publications
  • State and local planning and development agencies
  • Chambers of Commerce
  • Industry and trade group publications
  • State and local employment agencies
• Strategies in surplus conditions of HR

  • Freeze hiring
  • Attrition (voluntary departure)
  • Early retirement on voluntary basis
  • Reduction of reward expenditure
  • Lay off
  • Termination
• Strategies in shortage conditions of HR

  • Have current employees work overtime
  • Subcontract work to other firms
  • Provide opportunities for learners for a period of time
  • Hire part-time employees
  • Hire casual employees
  • Hire temporary employees
  • Hire permanent full-time employees
• Elements of the HR plan

  • Acquisition of personnel
  • Effective Utilization (redeployment, methods improvement, training to prevent obsolescence)
  • Development and Improvement (broad-based training and development, performance management systems)
  • Retention (proper remuneration, long-term career planning, healthy employee relations, good working environment)
• Requisites for successful HRP

  • HRP must be seen as equally vital as business planning
  • Top-management support
  • Periodic review and revision of the forecasting techniques and the forecasts
  • Without long range planning concentration becomes focussed on short-term needs resulting in "crisis management" reactions
  • An excellent and up-to-date HRIS
  • Active involvement of line managers and co-ordination between line managers and HR function
• Labour turnover


  The analysis of the numbers of people leaving the organization
• Reasons for labour turnover

  • More pay
  • Better prospects (career move)
  • More security
  • More opportunity to develop skills
  • Better working conditions
  • Poor relationships with manager/team leader
  • Poor relationship with colleagues
  • Bullying or harassment
  • Personal – pregnancy, illness, moving away from area etc.
• The cost of labour turnover

  • Leaving costs – payroll costs and personnel administration of leaver
  • Direct cost of recruiting replacements (advertising, interviewing, testing etc)
  • Opportunity cost of time spent by HR and line managers in recruitment
  • Direct cost of introducing replacements (induction course, cost of induction manuals etc)
  • Opportunity cost of time spent by HR and managers in introducing new starters
  • Direct cost of training replacements in the necessary skills
  • Opportunity cost of time spent by line managers and other staff in providing training
  • Loss of the input from those leaving before they are replaced in terms of contribution, output, sales, customer satisfaction and support etc
  • Loss arising from reduced input from new starters until they are fully trained