What is human resource planning?

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Human resource planning is one of the main functions of human resource management. It is known as HR Planning in short. It can be defined ‘as a strategy for the acquisition, utilisation, improvement, and retention of the human resources required by the enterprise in pursuit of its objectives’ (BPP Learning Media, 2010, p.40).

HR Planning is a process. Traditionally, HR planning was known as manpower planning. According to BPP Learning Media (2010), traditional manpower model has three stages as follows:

Forecasting demand for specific skills and competencies in an organisation

Forecasting supply of these skills and competencies both within and outside the organisation

Plan to remove any discrepancies between demand and supply

Forecasting demand for specific skills and competencies in an organisation

HR Managers need to forecast the demand of number of people, specific skills etc. required in order to run the business. It depends on a number of factors e.g. objectives of the organisations, cost of labour, and change in technology. If a new technology is due to be implemented, it might indicate that the demand for employees will be reduced. Likewise, it may also mean that the organisation needs some specific skills to implement the new technology.

Forecasting supply of these skills and competencies both within and outside the organisation

Having identified the need for people and perhaps some specific skills, HR managers now need to forecast the supply available both within and outside the organisation. Forecasting supply depends on a number of factors. For example, inclusion of a new country in European Union may increase the supply of people in the UK employment market. Likewise, the number of people retiring, or gaining promotions within the organisation will impact on the supply of people.

Plan to remove any discrepancies between demand and supply

This is the third and final stage in the traditional manpower model. Having identified the demand and supply, HR managers now need to bridge any gap between the two. For example, if the demand is higher than the supply, it may require the organisation to recruit new people. Likewise, if the demand if less than the supply, then the HR managers need to make some tough decisions. It may include but not limited to making some people redundant or decreasing their work hours.

Conclusion

In a nutshell, human resource planning is a very important function of human resource management. It gives managers an opportunity to understand demand and supply of people by analysing both internal and external factors.

The article publication date: September 2016

Further Reading/References

BPP Learning Media (2010) Business Essentials: Human Resource Management, London: BPP Learning Media Ltd

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Author: M Rahman

M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.