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Why Human Resource Planning is Important

If there is a shortage, find ways to hire new resources, train existing employees, or transfer from where there is a surplus. On the other hand, if there is a surplus, you can work out transfers, layoffs, etc., to reduce the costs. Even professional sports teams require top caliber talent to outmatch their competition.

The process also helps with workforce planning, a fundamental process that involves aligning business requirements with strategies. In this blog, you will get a better understanding of human resource planning. Moreover, you will learn about the roles and responsibilities of HR planners and the key benefits of the process. Human resource planning is the process of forecasting the current and future needs of an organization. Additionally, it entails taking the necessary steps to ensure that the organization has the right number and quality of employees to achieve its goals. The main components of human resource planning include analyzing the current workforce and identifying the skills and competencies that will be required in the future.

Based on the results of the analysis, HR objectives should be determined to meet future workforce needs. This involves assessing the current workforce to determine its size, composition, and also skills. With resource planning, you are able to better estimate how long the project will take which means you are able to tell your customers more accurately when they can expect their finished project. This reduces customer dissatisfaction when projects overrun or delays occur and ensures no customers are left without their completed projects for longer than necessary. To wrap it up, resource planning is one way for stakeholders to understand what resources are available to support their projects at any given time and how much it will cost.

Targeted human resource strategies, plans and programs to address gaps (e.g., hiring / staffing; learning; career development; succession management; etc.) are then designed, developed and implemented to close the gaps. In addition to the immediate advantages, proper planning provides a path for future development by establishing a reservoir of talent capable of filling leadership roles. N the long term, human resource planning helps align human capital management more closely with business strategy. As each department in an organization has different objectives and human resource requirements, HR professionals work with the management to determine their human capital requirements.

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In the organisation, some posts may fall vacant as a result of retirement, accidents, resignations, promotions or death of employees. Human resource planning estimates future requirements of the organisation and helps to ensure that human resources of right kind, right number, in right time and right place. There must be proper utilisation of human and non-human resources in the organisation. Sometimes the organisation may have adequate non-human resources e.g. machines, materials and money but inadequate human resources as a result, manufacturing process/production cannot be started. Human resource planning helps to offset uncertainties and changes as far as possible and enables to ensure availability of human resources of the right kind, at right time and at right place.

Though HRP is initiated and executed by the corporate staff, it requires the input and cooperation of all managers within an organization. Each department manager knows about the issues faced by his department more than anyone else. So communication between HR staff and line managers is essential for the success of HR Planning and development.

In case of shortage of human resources, physical resources of the organisation cannot be properly utilized. In case of surplus of human resources, this resource may remain under-utilized It helps in counter balancing the problem of shortage and surplus employees very comfortably. Human resource planning helps in correcting this imbalance before it become unmanageable and expensive. So for achieving optimum use of an organization’s human resources, a systematic process of human resource planning is essential. Proper human resources planning can ensure the development of managers through proper training programs. Staffing planning helps the company have the workforce it needs to achieve its objectives and use its human resources to optimize employee satisfaction.

  • To accomplish that, HR departments need to follow tried and tested techniques and processes to help planning and future-proofing easier.
  • As a first step, the company will identify its goals and objectives at the level of department, team, etc.
  • In the exercise of right-sizing of employees by the organisation, some of the employees may become surplus.
  • Environmental factors might include where the business is located, finding appropriate staff, or changes to the environment that mean a need for more or fewer employees.
  • If the team estimates that they need 10 additional people to complete project tasks, then there is no point in moving forward with a project if you cannot obtain those 10 people.

Human resource planning is an integral part of the overall corporate plan of the organization. You all know the challenges the business is facing due to turbulent and hostile environmental forces (e.g. technology, social, economic, and political upheaval) impinging on a single one of them. With the help of PEOs, small businesses can benefit from the perks of HR planning without the hassle of spending time and cost.

You must invest in robust HR software to enhance the accuracy of demand forecasts. You can conduct performance reviews or take surveys with the employees to understand the effectiveness of the action plan. In an extremely competitive and dynamic employment environment, organizations and their HR professionals really need to stay on top of new developments and keep an ear to the ground. And when new challenges or opportunities are identified on the horizon, the HR function needs to work diligently to address them. A reactive company, on the other hand, would be caught flatfooted and be left scrambling to comply with the new regulations in the nick of time or even after-the-fact. By identifying and planning for the world of tomorrow, HR teams and the broader organization can capitalize on future opportunities instead of putting out one fire after another.

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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. Human resource planning 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.

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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. Winging your approach to HR can work in the short term, but a solid human resource plan is necessary for true and manageable growth.

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To mitigate the uncertainties, consider the exogenous apart from internal factors while estimating the demand. Suppose a pharmaceutical manufacturing company needs an effective HR planning process to optimize its workforce management. You can collect the information from the existing HR database and augment it with data from performance appraisals and reviews. To gain a better picture, use visualization based on the individual roles, designations, and hierarchies. Map each employee to the level of the training they receive and the skills and expertise they hold.

To do work in the organisation, every organisation needs personnel of desired skill, knowledge and experience. This human resources requirement of organisation can be effectively fulfilled through proper human resource planning. It helps in defining the number of personnel as well as kind of personnel required to satisfy its needs. It ensures the reservoir of desired human resources as and when required. A key problem of human resource planning is finding and hiring a skilled labor force remains. Delays in hiring may impact the outcomes of the human resource planning process.

If your organization does not have a plan yet, consider putting one together today. Resource planning can also help develop new ways of working within your organization by identifying key roles within departments and working out how they will work together to achieve targets and goals. The most important benefit of resource planning is that it enables a team to get stakeholders on board regarding resource needs. When stakeholders are presented with resource management plans that outline the resources needed for their projects, they will likely approve them more readily. This is because it provides an understanding of what resources are involved and the risks to successful delivery if those resources aren’t available. As you roll out your resource planning carpet, a lot of things will become clearer.

Human Resource Planning plays a pivotal role in creating a smooth and efficient process for employee management and future workforce development. Social media platforms like LinkedIn and Twitter can aid in recruitment and provide an engaging platform for workers to communicate with the organization and each other. But it’s important to carefully monitor these platforms and take corrective action when the social media buzz runs counter to the objectives or brand image of the business. A human resources scheme with provision for incentives can also increase the worker’s engagement with the organization, their commitment to its progress, and their sense of job satisfaction.

Investing in a robust HR software system enhances the quality of human resource planning outcomes. The HR software market is expected to grow at a CAGR of 10% between 2021 and 2028. So, it is an appropriate time for businesses to invest in a reliable HR software system and streamline their human resource activities. Human resource planning offers several benefits to businesses and the workforce, from efficiently allocating human capital to lowering business costs, enhancing employee engagement, and mitigating the risks of uncertainties. The best performers can be identified, picked, and trained so when the right time arrives, they are ready to plunge in and shoulder the responsibilities at the senior level. It goes without saying that resource planning helps to ensure that there are no idle resources.

Ageing workers population in most western countries and growing demands for qualified workers in developing economies have underscored the importance of effective human resource planning. Human resource planning is the ongoing process of systematic planning to achieve the best use of an organisation’s most valuable asset – its human resources. The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding workforce shortages or spares. The three key elements of the HR planning process are forecasting labour demand, analysing present labour supply, and balancing projected labour demand and supply. In other words, human resource planning helps businesses estimate future manpower requirements and determine how to allocate the available resources to achieve their goals. It translates an organization’s goal into estimates with the number of employees and level of skills.