Lesson one

Human Resource Planning (HRP)

Human Resource Planning (HRP) involves systematically forecasting an organization's future

human resource needs and developing strategies to meet those needs. It's an ongoing, data-
driven process that aims to ensure the right number of people with the right skills are in the
right places at the right times. This helps organizations achieve their goals, improve
efficiency, and maintain a competitive edge.
Here's a more detailed look at the nature of HRP:
Forecasting:
HRP involves predicting future workforce requirements based on various factors like
business strategy, market trends, and technological advancements.
Demand and Supply Analysis:
It assesses both the demand for employees (based on business needs) and the supply of
available talent (both internally and externally).
Gap Analysis:
HRP identifies any discrepancies between predicted demand and available supply,
highlighting areas where additional recruitment, training, or development may be needed.
Strategic Alignment:
HRP is closely linked to the organization's overall strategic goals, ensuring that human
resource strategies are aligned with the business plan.
Data-Driven:
HRP relies on data to analyze trends, forecast needs, and track the effectiveness of HR plans.
Continuous Process:
HRP is not a one-time event but rather an ongoing process that requires regular review and
adjustment to ensure that the organization's workforce remains aligned with its needs.
Employee-Centric:
While focused on organizational needs, HRP also considers the needs and aspirations of
employees, aiming to create a workforce that is both productive and engaged.
Dynamic:
HRP must adapt to changing economic, social, and technological environments, incorporating
new trends and insights into its planning process.
Comprehensive:
HRP encompasses various aspects of HR, including recruitment, training, development,
succession planning, and performance management.
In essence, HRP is a proactive approach to managing the workforce that helps organizations
achieve their strategic objectives by ensuring they have the right people with the right skills
at the right time.
DEFINITION

Human resource planning (HRP) is the process of determining the right number of skilled
employees an organization needs to meet current and future business needs.

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is the continuous process of systematic planning to achieve
optimum use of an organization's most valuable asset—quality employees. HR planning
ensures the best fit between employees and jobs while avoiding manpower shortages or
surpluses.

There are four key steps to the HRP process. They include analyzing present labor
supply, forecasting labor demand, balancing projected labor demand with supply, and
supporting organizational goals. HRP is an important investment for any business as it
allows companies to remain both productive and profitable.

KEY POINTS

 Human resource planning (HRP) is a strategy companies use to maintain a steady

supply of skilled employees while avoiding staffing shortages or surpluses.
 HRP needs to meet short-term staffing challenges while adapting to changing
conditions in the business environment over the longer term.
 Having a good HRP strategy in place can mean productivity and profitability for a
company.
 HRP is made harder by the fact that not everything can be predicted.
 There are four general steps in the HRP process: identifying the current supply of
employees, determining the future of the workforce, balancing between labor supply
and demand, and developing plans that support the company's goals.

What Is Human Resource Planning (HRP) Used For?

Employees are a key part of any business. Without a strong workforce, income will likely
dry up and the company will go out of business. HRP is designed to prevent this from
happening. Its mission is to identify current and future hiring and training needs.

HRP allows companies to plan ahead so they can maintain a steady supply of skilled
employees. The process is used to help companies evaluate their needs and to plan ahead to
meet those needs.

HRP needs to be flexible enough to meet short-term staffing challenges while adapting to
changing conditions in the business environment over the longer term. To help prevent
future roadblocks and satisfy their objectives, HR managers have to make plans to do the
following:

 Find and attract skilled employees

 Select, train, and reward the best candidates
 Keep employees motivated
 Cope with absences and deal with conflicts
 Succession planning
 Promote employees or let some of them go
 Keep tabs on trends that could impact future supply and demand

Identifying a company's skill set and targeting the skills a company needs enables it to
strategically reach business goals and be equipped for future challenges.

What Is the Goal of Human Resource Planning (HRP)?

The goal of HR planning is to have the optimal number of staff to make the most money for
the company. Staying on top of this and achieving effective HRP can ensure that the
company:

 Gets the best out of current employees and increases their value
 Has a competitive advantage in its industry
 Is better placed to respond to challenges and adapt to changes

Challenges of Human Resource Planning (HRP)

HRP offers many advantages but it isn't without challenges. The future isn't easy to predict.
A technology breakthrough can change everything, as can a black swan event. Issues such as
employees getting sick and wealthier or more prestigious competitors poaching staff can
also cause serious problems.

Additionally, as globalization increases, HR departments will face the need to implement

new practices to accommodate government labor regulations that vary from country to
country. The increased use of remote workers by many corporations will also impact HRP
and will require HR departments to use new methods and tools to recruit, train, and retain
workers.

Companies can set themselves up to better deal with these types of challenges if they are
adaptable and continuously keep tabs on the world around them. The more prepared a
company is for an event that impacts its human resources, the better it can handle and
potentially take advantage of it.

importance of hrp strategies

hrp strategies must frequently be revised to match not only the company's changing needs
but also external changes.
There's also the challenge of HRP being time consuming and potentially costly. HRP offers
benefits but it can take a while to reap them.
A high level of employee engagement can be essential for a company's success. If a
company has the best employees and the best practices in place, it can mean the difference
between sluggishness and productivity, helping to lead a company to profitability. However,
like most important investments, it can take a while for these efforts to pay off. In the
beginning, HRP will be a drag on profits.

What Are the Four Steps to Human Resource Planning (HRP)?

There are four general, broad steps involved in the HRP process. Each step needs to be taken
in sequence in order to arrive at the end goal, which is to develop a strategy that enables the
company to successfully find and retain enough qualified employees to meet its needs.

1. Analyzing Labor Supply

The first step of HRP is to identify the company's current human resources supply. In this
step, the HR department studies the strength of the organization based on the number of
employees, their skills, qualifications, positions, benefits, and performance levels.

2. Forecasting Labor Demand

The second step requires the company to outline the future of its workforce. Here, the HR
department can consider anything that factors into the future needs of the company,
including promotions, retirements, layoffs, and transfers. The HR department can also look
at external conditions impacting labor demand, such as new technology that might increase
or decrease the need for workers.

3. Balancing Labor Demand With Supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap
analysis that lays out specific needs to narrow the supply of the company's labor versus
future demand. This analysis will often generate a series of questions, such as:

 Should employees learn new skills?

 Does the company need more managers?
 Do all employees play to their strengths in their current roles?

4. Developing and Implementing a Plan

The answers to questions from the gap analysis help HR determine how to proceed, which is
the final phase of the HRP process. HR must now take practical steps to integrate its plan
with the rest of the company. The department needs a budget, the ability to implement the
plan, and a collaborative effort with all departments to execute that plan.

TIP

Common HR policies put in place after this fourth step may include policies regarding
vacation, holidays, sick days, overtime compensation, and termination.

Why Is Human Resource Planning Important?

Human resource planning (HRP) allows a business to better maintain and target the right
kind of talent to employ—having the right technical and soft skills to optimize their function
within the company. It also allows managers to better train the workforce and help them
develop the required skills.

What Is "Hard" vs. "Soft" Human Resource Planning?

Hard HRP evaluates various quantitative metrics to ensure that the right number of the right
sort of people are available when needed by the company. Soft HRP focuses more on
finding employees with the right corporate culture, motivation, and attitude. Often these are
used in tandem.

In Human Resource Planning (HRP), "hard" HRP refers to a quantitative approach that
focuses on workforce capabilities and resource planning. It emphasizes data-driven
forecasting and analysis to ensure the right number and type of employees are available when
needed. "Hard" HRP aims to align human resources with business needs and strategic
objectives.
Here's a more detailed explanation:
Quantitative Focus:
Hard HRP uses data and metrics to predict future workforce requirements, such as analyzing
supply and demand, identifying skills gaps, and forecasting turnover.
Resource Planning:
It focuses on optimizing workforce resources, including headcount, skills, and costs, to meet
business goals.
Alignment with Business Needs:
Hard HRP ensures that the HR function is aligned with the overall strategic direction of the
business by providing the necessary talent to support it.
Example:
A company using hard HRP might conduct a skills inventory to identify which skills are
needed in the future, then develop training programs to address those gaps.
Contrast with Soft HRP:
Soft HRP, on the other hand, emphasizes qualitative factors like employee engagement,
culture, and motivation. It aims to create a positive work environment that fosters employee
retention and supports organizational objective

What Are the Basic Steps in HRP?

HRP begins with an analysis of the available labor pool from which a company can draw. It
then evaluates the firm's present and future demand for various types of labor and attempts
to match that demand with the supply of job applicants.1
The Bottom Line

Quality employees are a company's most valuable asset. HRP involves the development of
strategies to ensure that a business has an adequate supply of employees to meet its needs
and can avoid either a surplus or a lack of workers.

There are four general steps in developing such a strategy: first, analyzing the company's
current labor supply; second, determining the company's future labor needs; third, balancing
the company's labor needs with its supply of employees; and fourth, developing and
implementing the HR plan throughout the organization.