Human resources (HR) all the people working in a business.
Workforce/HR planning a process that identifies current and future HR needs to ensure that staffing is sufficient, qualified, and competent enough to achieve the organization’s objectives.
There are four key parts of HR planning (which will be further examined later):
Recruitment hiring the right person for the right job.
Training ensuring an employee receives proper professional development (i.e. acquires the necessary set of skills needed to complete the tasks efficiently).
Appraisal evaluating an employee’s job performance.
Termination or dismissal managing the situation of employee’s voluntary or involuntary leave.
High labour turnover
- This means that there is a reason why staff do not stay in the firm for a long period of time.
- Perhaps there is an aspect of the business that demotivates the workforce and lowers their productivity (resulting in extra costs for the business as it constantly needs to be on a lookout for new staff).
- High labour turnover suggests that staff may only be staying for a short time for a certain reason.
- There may be a key factor such as motivation, packages etc. that are affecting retention.
- Staff hired may be incompetent.
- Remuneration packages might not be competitive.
Low labour turnover
- Fresh blood may encourage innovation and new ideas.
- Existing employees are loyal to the business, and likely more motivated to work.
- Managers have recruited the right people for the right job.
- A very low labour turnover means that the business is stable but also lacks progress; ‘fresh blood’ in the business is important to stimulate innovations and new ideas.
Frequently Asked Questions: Human Resource Planning (HRP)
Human Resource Planning (HRP), also known as Manpower Planning, is the process of forecasting the future human resource needs of an organization and developing strategies to meet those needs. It involves analyzing the current workforce, assessing future requirements based on organizational goals, forecasting supply and demand for labor, and developing action plans (like recruitment, training, or downsizing) to ensure the right number of people with the right skills are in the right jobs at the right time.
Strategic Human Resource Planning (SHRP) is the process of aligning the human resources function with the overall strategic goals and objectives of the organization. It goes beyond just forecasting numbers to consider how HR can proactively contribute to achieving long-term business success. SHRP involves identifying the workforce capabilities and HR initiatives needed to implement the business strategy, ensuring that talent management, culture, and HR systems support strategic aims.
While specific models vary, a common HRP process involves several key steps:
- Analyzing Organizational Objectives: Understanding the company's goals, plans, and strategies (This is often considered the first step).
- Inventorying Current HR: Assessing the skills, knowledge, abilities, and roles of the existing workforce.
- Forecasting HR Demand: Predicting the number and type of employees needed in the future based on forecasts, sales, production, and strategic direction.
- Forecasting HR Supply: Projecting the availability of potential employees from internal (promotions, transfers) and external (labor market) sources.
- Gap Analysis: Comparing forecast demand and supply to identify potential surpluses or shortages of staff and skills.
- Developing HR Action Plans: Creating strategies to address the identified gaps, such as recruitment, training, development, downsizing, or outsourcing.
- Monitoring and Evaluation: Reviewing the effectiveness of the implemented plans and making adjustments as needed (Often considered the final stage).
HRP is crucial for organizational success for many reasons:
- Ensuring Talent Availability: Helps avoid shortages or surpluses of staff, ensuring the right people are available when needed.
- Cost Control: Reduces costs associated with labor shortages (overtime, recruitment fees) or surpluses (redundancy payments).
- Strategic Alignment: Links HR activities to business strategy, ensuring HR supports organizational goals.
- Improved Recruitment & Selection: Makes staffing processes more efficient and effective by clearly defining needs.
- Enhanced Employee Development: Identifies training and development needs to build future capabilities.
- Change Management: Facilitates smoother organizational changes by proactively managing workforce transitions.
- Improved Labor Relations: Can contribute to better relationships with employees by demonstrating foresight and planning.
Key components typically include:
- Demand Forecasting: Predicting future workforce needs.
- Supply Forecasting: Assessing internal and external availability of talent.
- Gap Analysis: Identifying discrepancies between demand and supply.
- Action Planning: Developing strategies to address gaps (recruitment, training, etc.).
- Control & Evaluation: Monitoring progress and effectiveness.
Some might also highlight components like linking to organizational strategy, workforce analysis, or skill assessment as distinct elements.
A Human Resource Plan (or HR Plan) is the tangible outcome document of the Human Resource Planning process. It's a detailed plan outlining the organization's current workforce status, forecasted future needs, identified gaps (surpluses or shortages), and the specific strategies and action steps HR will take to bridge those gaps over a defined period (e.g., one year, five years). It serves as a roadmap for HR activities like recruitment, training, succession planning, and workforce adjustments.
Succession Planning is a specific part of Human Resource Planning. It is the process of identifying and developing internal people with the potential to fill key leadership positions or critical roles within the organization in the future. It involves assessing talent, providing development opportunities, and creating a pipeline of ready candidates to ensure continuity and minimize disruption when key personnel move on or retire.
Workforce Planning is often used interchangeably with HRP or is considered a core part of it. It's the process of analyzing the workforce to ensure it aligns with business needs. This includes understanding the current workforce capabilities, forecasting future requirements, identifying skill gaps, and developing strategies to build or acquire the necessary talent. Workforce planning can be broad (overall headcount and skills) or specific (planning for particular roles or departments).
Several factors can influence HRP, and many also pose challenges:
- External Factors: Economic conditions, technological changes, legal and regulatory changes, demographic shifts in the labor market, competition for talent.
- Organizational Factors: Strategic plans, budget constraints, organizational structure, culture, technological capabilities.
- HR Factors: Accuracy of current HR data, resistance to change, lack of integration with other business functions, difficulty in accurate forecasting, insufficient HR skills or resources for planning.
Dealing with uncertainty and obtaining accurate data are common challenges in HRP.
