What is Human Resource Planning
Human resource planning is the process an organization uses to ensure that it has the right amount and the right kind of people to deliver a particular level of output or services in the future.
- The first Human Resource Planning – HRP activity entails ‘forecasting labor demand’, or how many workers the organization will need in the future.
- The second part of the Human Resource Planning – HRP process entails estimating ‘labor supply’, or the availability of workers with the required skills to meet the firm’s labor demand.
After estimating labor demand and supply for a future period, a firm faces one of three conditions, each of which requires different set of responses.
- In the first scenario, the firm will need more workers than will be available. A variety of approaches can then be used to increase the labor supply available to a specific firm. These include training or retraining existing workers, grooming current employees to take over vacant positions (succession planning), promoting from within, recruiting new employees from outside the firm, subcontracting part of the work to other firms, hiring part-timers or temporary workers, and paying overtime to existing employees.
- In the second scenario, labor supply is exceed labor demand. This means that the firm will have more employees than it needs. Firms may use variety of variety of measures to deal with this situation. These include pay cuts, reducing the number of hours and work sharing (all of which may save jobs).
- In the third scenario, labor demand is expected to match labor supply. The organization can deal with this situation by replacing employees who quit, with people promoted from the inside or hired from the outside. The firm may also transfer or re-deploy employees internally, with training and career development programs designed to support these moves.