STRATGEIC HUMAN RESOURCE PLANNING

CHAPTER THREE
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 HUMAN RESOURCE PLANNING
HRP Defined:
•The process of reviewing HR requirement to ensure that the required number and type of
employees are available when they are needed.
•Process of analyzing an organization’s human resource needs and developing plans, policies, and
systems to satisfy those needs.
•Process of anticipating and providing for the movement of people into, within, and out of an
organization.
•Process used to determine what and how many positions have the firm to fill and how to fill
them.
•An activity that managers engage in to forecasting their current and future needs of human
resources.

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 HARD AND SOFT HUMAN RESOURCE PLANNING

oHard Human resource planning is based on quantitative analysis to ensure that the
right number and the right sort of people are available when needed.

oSoft human resource planning is concerned with ensuring the availability of people
with the right type of attitudes and motivation who are committed to the organization and
engaged in their work and behave accordingly.

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 IMPORTANCE OF HUMAN RESOURCE PLANNING
▪Ensure the organization has the right number of human resources, with the right capabilities, at
the right times in the right places.

▪Anticipate the problems of potential surpluses or deficits of people.

▪Help managers to predicate future net human resource requirements of the organization.

▪Serves as a base for the performance of other HRM functions.

▪Help managers deploy their human resources as effectively as possible, where and when they are
needed, to accomplish the organization’s goals.

▪Reduces dependence on external recruitment when key skills are in short supply by formulating
retention, as well as employee development strategies.
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 STRATEGIC PLANNING
▪Strategic human resource management has been defined as ‘the linking of human
resources with strategic goals and objectives in order to improve business performance and develop innovative
organizational culture that foster innovation and flexibility’.

▪Strategic planning involves a set of procedures for making decisions about the organization’s long-
term goals and strategies.
• It focuses on how the organization will position itself relative to its competitors to ensure its
long-term survival, create value and grow.

• It is the process of defining an organizational strategy, or direction, and making decisions on allocating
the resources of the organization to pursue this strategy.

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HIGHLIGHT OF STRATEGIC PLANNING
Direction/Objective Setting Process Strategy Formulation

Internal
Mission
Analysis Strategy
Objective Identification
Setting &
Selection
External Vision
Analysis

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 STRATEGIC PLANNING AND HR PLANNING

oHuman resources planning relates to strategic planning into fundamental level: strategy
formulation and strategy implementation.

oHuman resources planning provides a set of inputs into the strategy formulation process in
terms of what is possible, i.e., whether a firm has the types and numbers of people available
to pursue a given strategy.

oIn addition to strategy formulation, HRP is important in terms of strategy implementation.

Once the firm has devised its strategy, the HRM function must do its part to ensure the strategy’s
success, thereby helping the organization to achieve its objectives.

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OPTIONS TO ALIGN HR STRATEGY WITH BUSINESS STRATEGIC PLAN

Aligning HR strategy with business strategy can be done in one of the following ways:

 Start with organizational strategy and then create HR strategy.

 Start with HR competencies and then craft corporate strategies based on these competencies.
 Do a combination of both.

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 SHRP PROCESS
1. Capturing underlying business philosophy and focus of the strategic plan of
the organization.

2. Preparing human resource inventory of the company’s current human

resources that consists of up-to-date information concerning each employee's
knowledge, skills and experience, age…

3. Scenario Planning-an assessment of the environmental changes that are likely to

affect the organization so that a prediction can be made of the possible situations that may
have to be dealt with in the future.

4. Forecasting future people needs (demand forecasting)- determine the type and
number of human resource required in the future.

5. Forecasting human resource supply: require anticipation of supply of people who

will be available in the future from within the organization and in the external labor
market.

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 SHRP PROCESS

6. Comparing forecasts of demand and internal supply

 Surplus = HR demand < HR supply
 Shortage= HR demand > HR supply
 Balanced= HR demand = HR supply

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 SHRP PROCESS
7. Drawing up plans to match supply to demand
a. If surplus is projected, plan must be made to:
▪Encourage early retirement
▪Reduce working hour
▪Restrict hiring
▪Promotion
▪Training and development
▪Transfer
▪Layoff

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 SHRP PROCESS
7. Drawing up plans to match supply and demand
b. If shortage is projected, plan must be done to:
➢Allow overtime work/part-time
➢To extend retirement
➢Introduce labor saving technology
➢Job enrichment/enlargement
➢Recruit and select employees

8. Implement the action plan

9. Monitoring and evaluation

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 APPROACHES TO DEMAND FORECASTING

oTrend analysis
oKey predictive factors
oManagement forecasting/expert judgment
oZero-based forecasting
oBottom-up approach
oWork standard data

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“If You Fail to Plan, You Are Planning to Fail”
— Benjamin Franklin

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