HUMAN

RESOURCE
PLANNING
 Chapter 1. Define and explain the importance of Human Resource
Planning (HRP).

objectives 2. Understand the benefits of conducting HRP.

3. Explain the steps in HRP.

4. Describe the relevance of HRP to other HR activities.

 • The process of analysing and
Human identifying the need for and
Resource availability of human resources
Planning
 Strategic • Strategic Planning

Planning and  Procedures for making decisions about the

organization’s long-term goals and strategies
Human • Human Resources Planning (HRP)
Resources  Process of anticipating and making provision
for the movement (flow) of people into, within,
and out of an organization.
• Strategic human resources management
 Combination of strategic planning and hr
planning
 The • To stabilize the workforce to facilitate implementation of
corporate strategies - planning
importance of • To obtain and retain the number of people that the

HRP organization needs (skill, expertise, competence) – through

succession planning / successor chart
• To match the internal and external supply of people for the
job openings anticipated in the organization over a period of
time – recruiting and selection of potential candidate
• To anticipate the problems of potential surpluses or deficits
of people – achieve equilibrium
• To reduce dependencies on external recruitment when key
skills in short supply – internal source of recruitment
• To make the best use of organization’s human resources.
 The • To develop well-trained and flexible workforce – to manage
deficit through job sharing
importance of • To provides the basis for establishing and maintaining

HRP effective HR programs and for coordinating the various HRM

function - successors
• When correctly done, HRP can help organization to save
intangible costs.
• To determine what the company’s short and long-term
people needs are.
• To provide information to assist the company’s hiring and
development actions.
 Linking • Strategic Analysis

Strategic  What human resources are needed and what are

available?

Planning and • Strategic Formulation

HRP  What is required and necessary in support of human
resources?

• Strategic Implementation
 How will the human resources be allocated?
 TOYOTA
Facilities (Assembly
plants and distributors in
many countries)
• Japan
• USA
Vehicle • Europe
production and • Asia Pasific
sales • China

344,104 People
employees management
• Global
assignment
• Employment of
disabilities
• Personnel
reform
1–9
 Step one: • Mission

Mission,  The basic purpose of the organization as well as its

scope of operations

Vision, and • Strategic Vision

Values  A statement about where the company is going and
what it can become in the future; clarifies the long-
term direction of the company and its strategic intent

• Core Values
 The strong and enduring beliefs and principles that
the company uses as a foundation for its decisions
 – The systematic monitoring of the major external
Step Two: forces influencing the organization.
 Economic factors: general, regional, and global
Environment conditions
 Industry and competitive trends: new processes,
al Analysis services,

(EXTERNAL
and innovations
 Technological changes: robotics and office

ANALYSIS) automation
 Government and legislative issues: laws and
administrative rulings
 Social concerns: child care and educational
priorities
 Demographic and labor market trends: age,
composition, literacy, and immigration
 Step Three:
Environmental Culture Capabilities

Analysis
(INTERNAL Internal
ANALYSIS) Analysis

Composition
Core knowledge workers
Traditional job – based
(top management, R&D,
employees (salespeople)
operations)

Composition

Contract labor Alliance/partners

(maintenance workers) (consultant)
 On the job and
the
environment

Behavior Attitude

Organizational
culture

Customs of
Belief
people

Values
Forecasting: – forecasting the demand for labor

A Critical – forecasting the supply of labor

– balancing supply and demand
Element of considerations.
Planning
1–
18
Forecasting Demand for Employees

Quantitative Methods

Forecasting Demand

Qualitative Methods

1–
19
Quantitative • Forecasting labor demand based on
Approach: an organizational index such as
sales:
Trend
Analysis
– Select a business factor that best predicts human
resources needs.
– Plot the business factor in relation to the number of
employees to determine the labor productivity ratio.
– Compute the productivity ratio for the past five years.
– Business factor x productivity ratio = number of
employees
– Project human resources demand out to the
target year(s).
Trend Analysis
 Qualitative • Management Forecasts

Approaches  The opinions (judgments) of supervisors, department

managers, experts, or others knowledgeable about
the organization’s future employment needs.

• Delphi Technique
 Judgments of a pre-selected group of individuals
who are an expert in forecasting the future
employment needs.

 Their opinion are then combined and returned to

them for the second opinion and continuous until
they agreed on a judgments.
1–
23
 Qualitative
Approaches
Forecasting the • Staffing Tables

Supply of • Markov Analysis

Employees: • Skill Inventories

Internal Labor • Replacement Charts

Supply • Succession Planning

 Forecasting Staffing Tables

Internal  Graphic representations of all organizational jobs,

along with the numbers of employees currently
Labor Supply occupying those jobs and future (monthly or yearly)
employment requirements.
Markov Analysis
 A method for tracking the pattern of employee
movements through various jobs.
 Percentage and actual number of employees who
remain in each job, and proportions who are
promoted, demoted, transferred or exit.
 Internal • Skill Inventories
Supply  Files of personnel education, experience, interests,
skills, etc., that allow managers to quickly match job
Forecasting openings with employee backgrounds.

Tools • Replacement Charts

 Listings of current jobholders and persons who are
potential replacements if an opening occurs – all job
categories

• Succession Planning
 The process of identifying, developing, and tracking
key individuals for executive positions – managerial
position
Forecasting the Supply of Employees:
Internal Labor Supply

1–
28
1–
29
 Step Four: • Strategy Formulation
– Moving from simple analysis to devising a
Formulating coherent course of action.

Strategy
• SWOT analysis
– A comparison of strengths, weaknesses,
opportunities, and threats for strategy
formulation purposes.
– Use the strengths of the organization to
capitalize on opportunities, counteract threats,
and alleviate internal weaknesses.
1–
31
FORMULATING
STRATEGY
Business Strategy
Corporate Strategy
Functional Strategy
 Step Five: Taking Action: Reconciling Supply and Demand

Strategy – Balancing demand and supply considerations

• Forecasting business activities (trends)
Implementation • Locating applicants

– Organizational downsizing, outsourcing,

offshoring
• Reducing “headcount”

– Making layoff decisions

• Seniority or performance?
• Labor agreements
HRP RESULTS 1. Balance manpower (dd=ss)
2. Surplus of manpower (dd<ss)
3. Shortage of manpower (dd>ss)
 1. Restricted Hiring - Impose policy that is
Managing Labor reduces the workforce by not replacing
Surplus employees who leaves.

2. Reduced Working Hours - By reducing the

number of working hours worked to hourly
paid employees.

3. Early Retirement - Offer attractive retirement

package to encourage them to take up the
offer.

4. Layoffs - Termination of workers based on

performance and seniority by using LIFO
method.

5. Downsizing - Implement VSS exercise to get

the ideal number of workers.

6. Work Sharing – Implementing work sharing

among employees and get half paid.
 1. Creative Recruiting - Explore new methods
Managing Labor of recruiting.
Shortage 2. Compensation Incentives - Firms competing
for workers in a high demand situation may
have to rely on compensation incentives.
Organization can offer attractive incentives
to attract them to work with the
organization such as flexible working hours,
child care center.
3. Training Programs - Giving special training
to attract those who unemployed to work
with the organization. It will enable them to
suit with the vacancies.
4. Lowering the Selection Standard - Lowering
the employment standard by altering
selection criteria to ensure enough people
are available to fill the vacancies.
5. Hiring Full Time Workers
6. Recalling Laid-Off Workers
7. Overtime
8. Hiring Temporary Workers
 Step Six: • Evaluation and Assessment Issues

Evaluation
– Benchmarking: The process of comparing the
organization’s processes and practices with those

and of other companies

Assessment – Human capital metrics

• Assess aspects of the workforce (total cost of
workforce, management span of control,
talent management index).

– HR metrics
• Assess the performance of the HR function
itself including training, turnover, return on
human capital
BENEFITS • Recruitment
• Selection

OF HRP • Training and Development

• Compensation
Problems That Hinder • Unclear organizational objectives
Effective HRP
• Tight labor market (dd and ss is not balanced)

• Lack of HRP understanding by the HRP

planner

• Lack of qualified potential candidates

• Lack of support from top/line management

• Lack of commitment from HR Department

Staff
Key Terms

Balanced Scorecard (BSC) replacement charts

benchmarking skill inventories
core capabilities staffing tables
core values strategic human resources
cultural audits management (SHRM)
environmental scanning strategic planning
human capital readiness strategic vision
human resources planning (HRP) succession planning
management forecasts SWOT analysis
Markov analysis trend analysis
mission value creation
organizational capability

1–43
TUTORIAL
QUESTIONS
1. Elaborate the strengths of HRP

2. Discuss the important roles of top management/leaders in HRP

3. Discuss how cultural factors, both globally and inside organizations, must be addressed as
part of strategic HR management

4. Explain ways to manage surplus and deficit in human resources