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Organizations need to know how many people and the kind of people they should have to meet both present and future business requirements. This is the function of human resource planning.

Human resource planning is the process of anticipating and making provisions for the flow of people into, within and out of the organization.

According to Bulla et al, Human resource planning is the process of ensuring that the human resource requirement of an organization are identified and plans are made for satisfying those requirements.

Human resource planning is the first step of the human resources management process and involves forecasting the human resources needs of an organization so that steps can be taken to satisfy these needs accordingly. 

It is an ongoing, systematic process of planning for an organization's human resources to maximize output from these resources.

Human resource planning aims to match individuals to their best jobs so that manpower shortages or surpluses are reduced drastically.

Human resource planning can also be called manpower planning, labour planning, employee planning, workforce planning and personnel planning

Importance Of Human Resource Planning

1. It ensures that there is an adequate supply of labour when it is required.

2. It assists management in making informed decisions about the amount and type of people to hire.

For this reason,  it serves as the foundation for the recruitment process.

3. It ensures that every human resource of an organization is put to its best use.

4. It helps the organization adapt to changing trends in the labour market that may affect its recruitment process.

5. It forecasts the future human resource requirement in an organization

6. It helps the organization to easily identify manpower shortages or surpluses and take corrective measures to reduce them.

7.  It allows the company to plan its training and development initiatives more systematically.

Steps In The Human Resource Planning Process

1. Identify the organizational objectives: Since all human resource management processes must be strategically aligned with the objectives of the business, all human resource planning must start with identifying the organizational objectives.

This step involves defining the organizational objectives which may encompass:

  • Mission: The basic purpose of the organization and its scope of operation
  • Vision: Where the organization is going and what it seeks to achieve in the future. Vision clarifies the long-term direction of the business and its strategic intentions.
  • Core values: Strong and enduring beliefs and principles that serve as a basis for the organisation's decision. Core values tell you the value system and belief system that guides every activity of the organization

Identifying the organization's objectives will aid in the development of strategies and the planning of human resource requirements to achieve these objectives.

2. Preparing and analysing human resource inventory: Human resource inventory ( or skill inventory) is a detailed listing of the basic information of employees in an organization, such as their skills, education, experience, wage information, job preference, achievements and awards.

It is essentially a list of all the characteristics of the existing human resource of an organization. 

The preparation of human resource inventory allows the human resource manager to quickly match openings with employee backgrounds.

3. Perform human resource forecast: Once the organizational objectives have been determined and human resource inventory has been analyzed, The next step is human resource forecast

Human resource forecasting is the process of predicting the demand and supply of human resources in an organization. It entails determining the number of human resources (in terms of quantity, skill, equipment, and work experience) needed to meet employee requirements while also achieving organizational goals.

4. Balancing demand and supply: The ultimate goal of most economists is to attain equilibrium, or a state of balance, in which there is no shortage or surplus.

This same logic only applies to human resources. In this stage, the manager ensures that there is a balance between the demand and supply of human resources. That is, the number of human resources a corporation needs to meet its objectives (demand) should be comparable to what it already has (supply)

If there is a manpower shortage (the demand for human resources exceeds the supply of human resources), the company will have to hire more people.

The reverse is also true. When there is a manpower surplus (when the supply of human resources exceeds the demand for human resources), the company will downsize its personnel through layoffs and demotions.

Essentially, determining the difference between the estimated human resource needs and existing human resources needs is what balancing the demand and supply stage is all about

5. Develop an action plan: This involves developing plans and policies to meet the human resource needs of an organization, which may include minimizing manpower surplus and reducing shortages.

Relevant activities needed to meet the organization's human resource needs, such as recruiting, selection, training, pay, and career planning are typically included in the action plan.

Problems Faced By Human Resource Planning

1. Estimating the demand and supply of human resources accurately is not an easy task.

Even with all of the advances in technology that have made it very easy to gather any data, there are still significant mistakes in calculating human resource demands in organizations

2. Many people believed that labour is available in surplus in our society. They, therefore, do not see the need for human resource planning.

Surprisingly, even top management now share this perception, as seen by the dramatic reduction in the number of human resource planning in large corporations.

3. Many businesses do not maintain appropriate personnel data. Because human resource planning is based on this information, this has affected its effectiveness.

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4. Human resource planning also faces the issue of uncertainty.

Market variations, technology developments, labour turnover, seasonal unemployment, and casual unemployment have rendered human resource planning largely ineffective. 

This is because these uncertainties have reduced human resource forecasting (which is necessary for human resource planning) to a wild guess.

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