HUMAN RESOURCE PLANNING (HRP)
Human Resource Planning refers to an attempt to estimate the numbers and kinds of employees
the organisation will need in the future in order to realise its strategic goals and the extent to
which the demand is likely to be met.
Human Resource Planning (HRP) attempts to reconcile an organisation’s need for human
resources with the available supply of labour.
HRP also results in matching people to the job, that is, the right people doing the right thing.
HRP can help management in making decisions in areas as hereunder:
• Avoidance of redundancies.
• Training of staff.
• Management development.
• Estimates of costs.
HRP needs continuous re-adjustment because the goals and objectives of an organisation are not
stable due to uncertainties in the environment.
1 Human Resource Planning (HRP) Process
Organisations engage in the process of Human Resource Planning (HRP) to determine the
demand and supply of human resources so as to gain or maintain.
In short, HRP is the process of identifying the HR needs and the ways of meeting those needs.
2 (i) The Strategic Planning
Strategic planning refers to the process of determining the overall organisational purposes and
objectives and how these can be achieved through Human Resource Planning, which is the
process of systematically reviewing human resource requirements to ensure that the required
numbers of employees, with the required skills are available in the organisation.
(ii) Comparing requirement and availability
This phase of the HR planning process involves matching the forecasted Human Resource (in
terms of future requirements) with the existing HR (the available employees).
(iii) Determining the surplus or shortage of employees
Once the assessment has been made, there is a need to determine whether the organisation has a
shortage or surplus of employees or the demand is just equal to the supply.
In case of a surplus in the number of employees, appropriate action should be taken, namely;
restricted hiring/recruitment, reduced hours, early retirement, layoffs.
In case of a shortage of employees, a proper recruitment and selection process is required to
obtain the right quantity and quality of new employees.
(iv) The Internal and External Environment
Conditions in the internal and external environment can change quickly and, hence, the human
resource planning process must be continuous.
Changing conditions may affect the entire organisation thereby requiring extensive modification
3 HR planning enables managers to anticipate and prepare for changing conditions and also allows
flexibility in the area of human resource management.
Aims of Human Resource Planning (HRP)
The aims of HR planning has been summarised below:-
• Attract and retain the right quantity and quality of employees (in term of qualification,
knowledge, skills, expertise and attitude).
• Optimising the use of the available HR (matching people with the job and adopting
flexible systems of work).
• Anticipation of potential problems of surpluses or deficits of employees (e.g., the world
• Develop a well trained and flexible workforce, making employees become multi-skilled
and multifunctional. Thus, the organisation has a greater ability to adapt to the fast and
constantly changing environment. It enhances the use of key skills within the organisation
thus reducing the dependence on external recruitment and formulating retention HR
Forecasting Human Resource Requirments
(i) Demand Forecasting
Demand forecasting is an estimate of the numbers and kinds of employees the organisation will
need at future dates in order to realise its stated objectives.
(ii) Supply Forecasting
4 The determination of whether a firm is able to secure employees with the necessary skills, and
from what sources.
Before starting a new business, management study the demand side of human resources. It is
equally important to study the supply side of HR as well, especially when very skilled workers
are needed for the job.
Supply forecasting measures the quantity and quality of employees likely to be available inside
and outside the organisation after allowing for labour wastage, retirement, absenteeism,
promotion and internal transfer.
The demand and supply forecasts are analysed to identify and surpluses or deficits.
This analysis which provides the basis for recruitment, retention and, if unavoidable, downsizing
plans, may be done by using specialised software.
(iv) Action Plan
Plans are prepared to deal with forecasts so as to improve productivity and performance whilst at
the same time staying within the HR budget set.
5 Plans often have to be short term and flexible because of the difficulty in making firm prediction
about human resource requirements in a rapidly changing environment COST
When recruiting people, several costs need to be borne by the organisation, mainly in the event
of large group intake (e.g. in the health sector, police and prison department).