Getuplearn Logo

Importance of Human Resource Planning

  • Post author: Anuj Kumar
  • Post published: 14 July 2022
  • Post category: Human Resource Management
  • Post comments: 1 Comment

Table of Contents

  • 1.1 Future Personnel Needs
  • 1.2 Part of Strategic Planning
  • 1.3 Creating Highly Talented Personnel
  • 1.4 International Strategies
  • 1.5 Foundation for Personnel Functions
  • 1.6 Increasing Investments in Human Resources
  • 1.7 Resistance to Change
  • 1.8 Uniting the Viewpoint of Line and Staff Managers
  • 1.9 Succession Planning
  • 1.10 Other Benefits
  • 2.1 What are the five importance of human resources?
  • 2.2 Reason for current interest and importance in HRP?
  • 2.3 Why HR Planning???

Importance of Human Resource Planning

Human resource planning is the subsystem in total organizational planning. Organizational planning includes managerial activities that set the company’s objective for the future and determines the appropriate means for achieving those objectives. Following are the importance of human resource planning :

Future Personnel Needs

Part of strategic planning, creating highly talented personnel, international strategies, foundation for personnel functions, increasing investments in human resources, resistance to change, uniting the viewpoint of line and staff managers, succession planning, other benefits.

10 Importance of Human Resource Planning

Human resource planning is significant because it helps to determine the future personnel needs of the organization. If an organization is facing the problem of either surplus or deficiency in staff strength, then it is the result of the absence of effective Human Resource Planning .

All public sector enterprises find themselves overstaffed now as they never had any planning for personnel requirements and went on a recruitment spree till the late 1980s. The problem of excess staff has become such a prominent problem that many private sector units are resorting to VRS’s‘ voluntary retirement scheme’.

The excess of labor problem would have been there if the organization had a good HRP system. An effective HR Planning system will also enable the organization to have good succession planning.

Human Resource Planning has become an integral part of strategic planning. HR Planning provides inputs in the strategy formulation process in terms of deciding whether the organization has got the right kind of human resources to carry out the given strategy.

Human Resource Planning is also necessary during the implementation stage in the form of deciding to make resource allocation decisions related to organization structure, process, and human resources. In some organizations, HRP plays a significant role as strategic planning and HR issues are perceived as inherent in business management.

Even though India has a great pool of educated unemployed, it is the discretion of the HR manager that will enable the company to recruit the right person with the right skills for the organization. Even the existing staff hope the job so frequently that organization faces a frequent shortage of manpower.

Manpower planning in the form of skill development is required to help the organization in dealing with this problem of skilled manpower shortage.

An international expansion strategy of an organization is facilitated to a great extent by HRP. The HR department’s ability to fill key jobs with foreign nationals and reassignment of employees from within or across national borders is a major challenge that is being faced by international business.

With the growing trend toward global operation, the need for HRP will as well be the need to integrate HRP more closely with the organization’s strategic plans. Without effective HRP and subsequent attention to employee recruitment, selection, placement, and development, career planning, the growing competition for foreign executives may lead to expensive and strategically descriptive turnover among key decision makers.

HRP provides essential information for designing and implementing personnel functions, such as recruitment, selection, training and development, and personnel movements like transfers, promotions, and layoffs.

Organizations are making increasing investments in human resource development compelling the increased need for HRP. Organizations are realizing that human assets can increase in value more than physical assets. An employee who gradually develops his/ her skills and abilities becomes a valuable asset to the organization.

Organizations can make investments in their personnel either through direct training or job assignment and the rupee value of such a trained, flexible, motivated productive workforce is difficult to determine. Top officials have started acknowledging that the quality of the workforce is responsible for both the short-term and long-term performance of the organization.

Employees are always reluctant whenever they hear about change and even about job rotation. Organizations cannot shift one employee from one department to another without any specific planning. Even for carrying out job rotation (shifting one employee from one department to another), there is a need to plan well ahead and match the skills required and existing skills of the employees.

HRP helps to unite the viewpoints of line and staff managers. 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.

Human Resource Planning prepares people for future challenges. The ‘stars’ are picked up, trained, assessed, and assisted continuously so that when the time comes such trained employees can quickly take the responsibilities and position of their boss or seniors as and when the situation arrives.

These are other benefits of human resource planning :

  • HRP helps in judging the effectiveness of manpower policies and programs of management.
  • It develops awareness of the effective utilization of human resources for the overall development of the organization.
  • It facilitates the selection and training of employees with adequate knowledge, experience, and aptitudes so as to carry on and achieve the organizational objectives.
  • HRP encourages the company to review and modify its human resource policies and practices and to examine the way of utilizing the human resources for better utilization.

FAQ Related to Importance of Human Resource Planning

What are the five importance of human resources.

These are the five importance of human resources: 1. Future Personnel Needs 2. Part of Strategic Planning 3. Creating Highly Talented Personnel 4. International Strategies 5. Foundation for Personnel Functions.

Reason for current interest and importance in HRP?

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.

Why HR Planning???

You all must have understood the importance of planning in general. In designing an environment for the effective performance of individuals working together in groups, a manager’s most essential task is to see that everyone understands the group’s purposes and objectives and its methods of attaining them. If group effort is to be effective, people must know what they are expected to accomplish. This is the purpose of planning! It is the most basic of the managerial functions (refurbish the text on POSDCoRB!). It bridges the gap from where we are to where we want to be. It makes it possible for things to happen which would otherwise not happen. Thus, in the context of Human Resources, planning is a must ‘cause (here I can enumerate many! But, I expect you to come up with an explanatory example for each. Right??)

Related posts:

  • Human Resource Planning: Definition, Needs, Process, Importance, Advantages, Limitations
  • 9 Need for Human Resource Planning and Importance
  • Types of Business Environment
  • Employee Safety: Objectives, Steps in Safety Programs, Importance, Essentials Elements
  • Counselling and Mentoring: Components, Needs, Types, Process

Motivation in Hrm: Definition, Nature, Importance, Characteristics, Types

  • Theories of Motivation: Types of Theories

HRIS: Objectives, Functions, Scope, Designing of Process, Role

  • Human Resource Audit: Definitions, Features, Objectives, Scope, Process

Roles of HR Manager

  • Methods of Human Resource Planning

Uses of Job Analysis Information in HRM

Ranking method of job evaluation.

  • 12 Steps of Selection Process with Examples
  • Job Demotion: Meaning, Causes, Types, Policy

You Might Also Like

Strategic planning process.

14 Importance of Controlling

14 Importance of Controlling

Objectives of planning.

Ranking Method of Job Evaluation

Fringe Benefits: Definition, Needs, Objectives, Types

Functions of HRIS

Objectives of HRM

11 Uses of Job Analysis Information in HRM

Process of Performance Appraisal

Separation in HRM

Separation in HRM: Types

What is Job Design

Job Design in Hrm: Factors, Components

Process of mbo, management by objectives: definitions, features, objectives, processes, advantages, limitations.

Components of Job Description

Components of Job Description and Advantages

11 uses of performance appraisals, 8 features of scientific management: principles.

What is Promotion

Promotion: Definitions, Meaning, Purposes, Principles, Types

What is Selection

Selection in Hrm: Definition, Difference, Process

What is Motivation

  • Entrepreneurship
  • Organizational Behavior
  • Financial Management
  • Communication
  • Human Resource Management
  • Sales Management
  • Marketing Management
  • Search Search Please fill out this field.
  • Human Resource Planning (HRP)
  • Understanding HRP

What Is the Goal of Human Resource Planning (HRP)?

  • Human Resource Planning FAQs

The Bottom Line

  • Business Essentials

Human Resource Planning (HRP) Meaning, Process, and Examples

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

importance of human resource planning in business

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is the continuous process of systematic planning to achieve optimum use of an organization's most valuable asset—quality employees. Human resources planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.

There are four key steps to the HRP process. They include analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and supporting organizational goals. HRP is an important investment for any business as it allows companies to remain both productive and profitable.

Key Takeaways

  • Human resource planning (HRP) is a strategy used by a company to maintain a steady stream of skilled employees while avoiding employee shortages or surpluses.
  • Having a good HRP strategy in place can mean productivity and profitability for a company.
  • There are four general steps in the HRP process: identifying the current supply of employees, determining the future of the workforce, balancing between labor supply and demand, and developing plans that support the company's goals.

Michela Buttignol

What Is Human Resource Planning (HRP) Used For?

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.

Human resource planning needs to be flexible enough to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term. HRP starts by assessing and auditing the current capacity of human resources.

Here, identifying a company's skill set and targeting the skills a company needs enables it to strategically reach business goals and be equipped for future challenges. To remain competitive, businesses may need advanced skills or to upskill their employees as the market environment evolves and changes.

To retain employees and remain competitive, HRP often looks at organizational design, employee motivation, succession planning, and increasing return on investment overall.

Challenges of Human Resource Planning (HRP)

The challenges to HRP include forces that are always changing. These include employees getting sick, getting promoted, going on vacation, or leaving for another job. HRP ensures there is the best fit between workers and jobs, avoiding shortages and surpluses in the employee pool.

To help prevent future roadblocks and satisfy their objectives, HR managers have to make plans to do the following:

  • Find and attract skilled employees.
  • Select, train, and reward the best candidates.
  • Cope with absences and deal with conflicts.
  • Promote employees or let some of them go.

Investing in HRP is one of the most important decisions a company can make. After all, a company is only as good as its employees, and a high level of employee engagement can be essential for a company's success. If a company has the best employees and the best practices in place, it can mean the difference between sluggishness and productivity, helping to lead a company to profitability.

What Are the Four Steps to Human Resource Planning (HRP)?

There are four general, broad steps involved in the human resource planning process. Each step needs to be taken in sequence in order to arrive at the end goal, which is to develop a strategy that enables the company to successfully find and retain enough qualified employees to meet the company's needs.

Analyzing labor supply

The first step of human resource planning is to identify the company's current human resources supply. In this step, the HR department studies the strength of the organization based on the number of employees, their skills, qualifications, positions, benefits, and performance levels.

Forecasting labor demand

The second step requires the company to outline the future of its workforce. Here, the HR department can consider certain issues like promotions, retirements, layoffs, and transfers—anything that factors into the future needs of a company. 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.

Balancing labor demand with supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis that lays out specific needs to narrow the supply of the company's labor versus future demand. This analysis will often generate a series of questions, such as:

  • Should employees learn new skills?
  • Does the company need more managers?
  • Do all employees play to their strengths in their current roles?

Developing and implementing a plan

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.

Common HR policies put in place after this fourth step may include policies regarding vacation, holidays, sick days, overtime compensation, and termination.

The goal of HR planning is to have the optimal number of staff to make the most money for the company. Because the goals and strategies of a company change over time, human resource planning must adapt accordingly. Additionally, as globalization increases, HR departments will face the need to implement new practices to accommodate government labor regulations that vary from country to country.

The increased use of remote workers by many corporations will also impact human resource planning and will require HR departments to use new methods and tools to recruit, train, and retain workers.

Why Is Human Resource Planning Important?

Human resource planning (HRP) allows a business to better maintain and target the right kind of talent to employ—having the right technical and soft skills to optimize their function within the company. It also allows managers to better train the workforce and help them develop the required skills.

What Is "Hard" vs. "Soft" Human Resource Planning?

Hard HRP evaluates various quantitative metrics to ensure that the right number of the right sort of people are available when needed by the company. Soft HRP focuses more on finding employees with the right corporate culture, motivation, and attitude. Often these are used in tandem.

What Are the Basic Steps in HRP?

HRP begins with an analysis of the available labor pool from which a company can draw. It then evaluates the firm's present and future demand for various types of labor and attempts to match that demand with the supply of job applicants.

Quality employees are a company's most valuable asset. Human resource planning involves the development of strategies to ensure that a business has an adequate supply of employees to meet its needs and can avoid either a surplus or a lack of workers.

There are four general steps in developing such a strategy: first, analyzing the company's current labor supply; second, determining the company's future labor needs; third, balancing the company's labor needs with its supply of employees; and fourth, developing and implementing the HR plan throughout the organization.

A solid HRP strategy can help a company be both productive and profitable.

International Journal of Business and Management Invention. " Human Resource Planning-An Analytical Study ," Page 64.

importance of human resource planning in business

  • Terms of Service
  • Editorial Policy
  • Privacy Policy
  • Your Privacy Choices

importance of human resource planning in business

Phone Login

Looks like you already have an account with this ID. You can try logging in

Forgot password?

Back to login

Register Now

' src=

This Email id already exist please try loging in

Create an account to find courses best suited to your profile

  • September 26, 2022

Why Is Human Resource Planning Essential For Businesses?

Drop your details to know more about programme

  • Mobile Number *
  • State * State* Andaman and Nicobar Andhra Pradesh Arunachal Pradesh Assam Bihar Chandigarh Chhattisgarh Dadra and Nagar Haveli Daman and Diu Delhi Goa Gujarat Haryana Himachal Pradesh Jammu and Kashmir Srinagar Jharkhand Karnataka Kerala Lakshadweep Madhya Pradesh Maharashtra Manipur Meghalaya Mizoram Nagaland Odisha Puducherry Punjab Rajasthan Sikkim Tamil Nadu Telangana Tripura Uttar Pradesh Uttarakhand West Bengal
  • I accept Terms and Conditions

Last date of application: 14/07/2022

Of all the resources in an organization, it is the human workforce that is considered most valuable. Only people can come up with innovative ideas to improve efficiency. Men are required to operate machinery. They are the ones who can create strategies and implement them. That is why organizations need to plan their human resources and ensure they have the right mix of people. HR managers play the vital role of planning a firm’s staffing requirements and employing them.

Importance Of Human Resource Management

Before we look at human resource planning , it is worth understanding what HR management is. This is a function that takes care of all aspects of human elements inside a company. Being the most valuable resource in a company, managing humans carries importance and must be done by experts in this subject. These professionals are responsible for searching, hiring, training, and retaining employees. They must make sure that the capabilities of the manpower are utilized for achieving company goals while not sacrificing their objectives.

Also Read:  How to grow your career in Human Resource Management in 2022

Human resources management is critical for every company because companies can’t achieve their goals unless people contribute their best efforts. People must also work cohesively towards the objectives. They must also reach their personal aims, without which they will not stay in the company. Retaining employees is an essential function under human resource management. Recruiting new persons is an expensive and tiring procedure. HR management is highly critical because people and their well-being are involved.

Now that we have understood why people management is crucial, let us see what human resource planning is and why companies must perform this task.

Human Resource online courses

Understanding Human Resource Planning

Those studying an XLRI course on HR management can explain that human resource planning is a process by which a company achieves the desired level of the human workforce. With thorough planning and execution, it is expected that there will be the right people in suitable positions. Such a situation will allow companies to achieve their objectives while also enabling employees to grow and advance in their careers. Both companies and individuals will have long-term benefits and will continue to be happy with each other.

When we talk about human resources, it doesn’t only refer to the staff strength. HR managers must do planning to ensure that the necessary skills, commitment, motivation, knowledge, and values are achieved. Companies must do human resource planning to satisfy the current and future manpower requirements of a firm. Both these must be appropriately aligned with the goals of the organization. It also includes developing existing staff members to meet future needs of technical knowledge and capability.

Human resource planning starts much before a company starts functioning. It is a process of converting a company’s objectives into the number of people required to achieve them. But HR planning doesn’t just happen in a new company. It also takes place when organizations expand. To complete the expansion plans and to achieve their revised goals, firms will require to increase their staff strength. At this time also excellent planning is necessary to get work done at the least cost.

Also Read:  The Functions of Human Resource Management

Let us now see why human resource planning is important for companies.

Importance of human resource planning, assessing the right number of employees required.

Having excess or fewer staff members can be a problem for any company. If there aren’t enough employees to complete all jobs, a firm can’t achieve its goals. Having surplus staff members can lead to excess expense and a drain on profits. Human resources planning is the way to ensure that there is just the correct staff strength that will help a firm achieve its goals. When the number of employees is apt, they will also get quick promotions and better pay.

Planning Lays The Foundation For Other Tasks

As human resource planning is the first task undertaken by the department, it lays the foundation for all other tasks. When planning is done, the officials can know-how recruitment must be done. They can decide on selection criteria. When they know what people are required, it also helps provide training for existing staff to make them skilled to occupy higher positions. Good planning also helps provide funds to pay salaries for the additional employees and increments to deserving people.

Also Read:  Is Human Resource Management a Good Career Option?

Preparing For Changes

Business and market environments are constantly changing. Job nature itself can change when there are changes in the market. The introduction of new technologies has made it necessary for employees to be appropriately skilled to adopt them. This will need training of existing employees or recruitment of new ones. Personnel managers keep an eye for such developments and plan accordingly. When HR planning is done correctly, it helps companies prepare for the changes and ensure that their employees can keep pace with the changes.

Investing In Workforce

Adding human resources will need additional funds. Such an investment must give the best returns. Planning is a part of human capital management that helps prepare for such investment and know what returns can be expected. It enables the top management to understand whether the money spent on inducting new employees will be profitable. Good planning will ensure that those who are recruited are most suitable for the job. These employees will give good benefits to a firm.

Enables To Make Expansion Plans

With human resource planning, companies can know exactly how many people are needed and what it will cost the company. Such information is vital during company expansion and diversification. Labor costs in different regions can vary. When a company is planning expansion to a new area, HR officials will check the prices in these areas and estimate. Such planning is helpful for management to assess how much the expansion will cost them and what revenues must be earned to offset this.

Also Read:  What Role Do HR Certifications Play in Developing Long-Lasting Careers?

Manage Employee Turnover  

There is a good demand for qualified and skilled people in India. This results in high employee turnover in many industries. People are constantly looking for better opportunities, and they don’t hesitate to move to a new company when the chance occurs. This means that companies will have a shortage of staff members. Human resource planning will consider such factors and make sure that they are ready with replacements when people leave. This will help work to go on smoothly without interruption.

Implement International Expansion Plan

As globalization progresses, many companies are looking at expansion to other countries. There are many countries with huge potential for Indian products. It will be beneficial for companies to expand to such nations. But there must be a clear idea for the management about how much it will cost them to employ staff for these operations abroad. Human resource planning will give an exact estimate about how many people will be needed and how much it will cost the company.

Managing Technology Integration

New technologies are frequently emerging, and this makes work more efficient and fast. The integration of such technology also reduces the need for the human workforce. As companies adopt modern developments, there is bound to be an excess of employees in specific departments. Companies must decide what to do with these people, making sure that they don’t suffer in any manner. Human resource planning is an essential activity before such technologies are introduced in a company.

Also Read:  Become an effective HR professional with this HRM course

Objectives Of Human Resource Planning

We have seen how vital HR planning is. It is essential to know what objectives this process will achieve.

  • HR planning allows for accurate assessment of future human resource needs.
  • This process helps to avoid excess or short staffing.
  • Companies will have suitably skilled manpower.
  • Companies can do modernization and technology integration easily.
  • HR planning helps companies achieve their objectives with the right workforce.
  • Good human resources planning helps reduce employment costs.
  • With planning, skill requirements can be fulfilled.
  • Employees also benefit by being able to achieve their objectives.
  • Training needs of employees can be planned correctly.
  • Planning helps improve employee productivity.

Steps In Human Resource Planning

Analyzing requirements.

Human resource planning starts with analyzing the requirements of various departments. Not every business unit will need to add people. Some may want to reduce some staff members due to automation. HR departments must analyze all the requirements and decide whether to recruit people or move some from one department to another. They must consider the organization’s objectives when planning for people. Understanding the goals of different departments helps to know the changes necessary in the organization.

Taking The Human Resource Inventory

Once the necessary changes have been identified, the next step in human resource planning is to take an inventory of the available workforce in the firm. Human resources will not just include the people but also their capabilities, skills, and performing capacities. This will help the HR planning officials decide how to fill the vacancies due to additional requirements of various departments. They can determine whether they can find the people from within or have to recruit new hands.

Also Read:  How to Find Human Resources Job Opportunities?

Forecast Employee Demand And Supply

Human resource planning also helps in forecasting the demand for employees in various departments. HR officials understand the development plans of each business unit and predict how many employees they will need. These officials can also use analytics to find out employee requirements for the future. Another important task they undertake is to find out how the supply of people will be in the future. This is essential to decide the right time to hire more people. Such forecasting helps to acquire the best talents at low costs.

Knowing The Gaps

Once the demand and supply are forecasted, personnel managers can understand what gaps will be arising in the future. There can be either shortage or surplus of employees in future. Among departments themselves, some can have excess and others not have enough people. Knowing the gaps helps the human resource managers to see how they can be offset by using people from within. Sometimes it is possible to train some surplus workers and make them capable of filling up vacant positions.

Create A Plan

Once the gaps are identified along with departmental requirements and supply status, it is time to formulate a plan to fill them. The HR management team can decide how they must do this. They can recruit, transfer, terminate, retire or upskill employees to ensure that every business unit has the required staff members. They must also ensure there are no surplus workers, which can drain the profits. The plan must also include the costs that will be incurred for these activities.

Also Read:  Why Should I Choose a Career in Human Resource Management?

Implement The Plan

The next step in planning is to implement the plan. It is not as easy as it sounds because it will need acceptance and permission from business heads and the top bosses. Funds must be allocated for hiring, training, or termination of employees. Departmental heads must concur with the plans made by HR. Training must be arranged where necessary and ensured that the person selected for promotion would fit the role perfectly. If they must recruit, then personnel managers must initiate the procedures for that.

Monitoring and controlling

The implementation is not entirely in the hands of the HR department. Even in the department, the planning team won’t be the ones to recruit people. Training is given by someone else, either from within the company or outside. Department heads must keep track of their new additions, if any. If they have reduced workers, they must ensure that the work is being done by someone else. The HR planning team must collect all this information to ensure proper implementation of the plan.

Human resource planning is the way of finding out and filling the staffing requirements of a firm. We have seen the steps in this process. Now it is essential to see what factors must be considered when making a human resource plan.

Factors Affecting Human Resource Planning

The employment situation in a region or the country is a significant factor that affects resource planning. Depending on whether there is high unemployment or a shortage of skilled people, labor costs can change. Cost is an essential factor in HR planning, which can affect how an organization fulfills its manpower requirements. Sometimes the shortage of people with specific skills can also raise their costs steeply. In such cases, companies may shelve the plan to appoint anyone and outsource such jobs.

Type And Objectives Of The Organization

This is another essential aspect that is considered when planning for human resources. Companies in the same industry may vary from each other in their style of functioning. This can affect the way the workforce is designed. The objectives of a company will also have an impact on the selection of the type of workforce. If a company plans to have organic growth, it will need to appoint additional staff members. But if it aims to grow through mergers or acquisitions, it may have to restructure or reduce employees to avoid overlapping functions.

Also Read:  Scope and Opportunity in Human Resource Management in India

Organizational Status

An organization goes through different stages, from embryonic to declining. At various stages, its requirement of employees is different. When it starts functioning, there may not be much HR planning required as the organization must get its footing firmly. When the firm starts growing, there will be hectic workforce planning as there is a need for additional employees. In the mature stage, there will hardly be any need for more workers. The plans will be only for the retirement of existing personnel. When the enterprise starts to decline then, HR will be planning for reductions or layoffs.

Technological Advancements

Human capital management is greatly affected by advancements in technology. Any new development is immediately used for commercial purposes. Companies adopt modern sciences to improve efficiency and reduce costs. This will also result in the need for a lesser human workforce. When doing HR planning, officials must indeed look at whether there is a possibility of adopting new technologies and how many employees will be replaced by the machines. Companies must do planning to relocate or reduce the employees.

Both the company’s the nation’s economy will affect employment planning. If the company is going through a financial crisis, any addition of human resources will be put on hold. HR officials will be more concerned about retaining existing employees. The economy of a country can also affect workforce planning. If the nation goes into recession, then there will be less money with people. Their purchases will be restricted to essentials. This will result in reduced sales of many items. Companies making such products will not plan for any expansion or human resources addition.

Also Read:  Guidelines For Formulating A Career In HR

Plan Duration

Companies will need to plan for both the present and future. Short-term planning will be different from long-term planning. With so many uncertainties in the market, long-term planning may undergo various changes before it is implemented. But short-term plans are executed quickly because situations can change rapidly. If a company is going through an uncertain phase, there may be no long-term planning. New companies will make more short-term plans till they stabilize. Planning must be completed, taking into consideration the goals of the company and their duration.

Quality Of Data

Modern HR managers take the help of analytics when planning for people. This is an excellent way to understand past incidents and get valuable insights for the future. Analytics is done using past data held by a firm and from external sources. The quality of data is a very critical factor for getting the right results. If the information is not used correctly, analytics results will vary and lead to wrong decisions. This is why HR officials must ensure that quality data is used when planning for human resources.

Social Responsibility

Inclusiveness is every corporation’s responsibility. Whatever be the size of the establishment, it must make sure that the staff comprises all communities and genders. Avoiding people from certain communities or genders can significantly affect the efficiency of the firm. This can also go against its social responsibility obligations. When planning for a workforce, HR managers must ensure that enough representation is there for all communities and genders. They must also see that the local community is given more preference to get their support.

Though human resource planning is a critical function for every organization, not everyone seems to think so. There are various obstacles to complete the workforce planning task. Some of these are man-made, and others are due to the improper use of technology. Such barriers make it difficult for HR managers to plan the workforce correctly. This can result in the firm having either excess, short or unskilled employees. It is worth looking at these challenges in detail.

Also Read:  Traits that Show You’ll have a Lucrative Career in HR Management

Obstacles To Human Resource Planning

1. lack of support.

Any activity in a company will be successful only if the top management supports it. Human resource planning is no different. But in many companies, it can be seen that the chiefs consider HR planning as a waste of time. They are in a false notion that people can be recruited at any time, and there is no need to plan for that. Such a lack of support can be a major obstacle to this activity. HR managers must convince their bosses that the company could find itself falling short or having excess staff without proper planning.

2. Not Understanding HR Officials

It is very common to see managers controlling human resources departments being considered as not the right people to recruit. Department heads often feel that they are more qualified to plan and select the workforce for their team. This can put HR managers in a challenging position. They need to convince department heads about their capability to appoint the right people to achieve its goals. The previous aspect is essential for this. They must get the support of their top management.

Also Read:  Jobs, Roles & Responsibilities in the HR

3. Incompatible Information

A company makes its strategic plans on a long-term basis. The information used for this purpose is with the view to forming strategies for the future. But when human resource planning is done, it may not be possible to use such long-term strategies. Conditions keep changing, and HR can only make plans on the basis of short-term information. This incompatibility can become an obstacle to proper planning. It is necessary to put efforts into aligning the HR planning goals with that of the company.

4. Using Multiple Approaches

Every organization must have the required number of employees. They must also have employees with the qualities that are needed for the successful execution of various jobs. Sometimes there are differences of opinions on this matter between HR officials themselves or with others like the top management or department heads. While both these approaches are relevant for an organization, it is necessary that they are used correctly. All stakeholders must come to an understanding and use each approach where it is most suitable.

5. Lack Of Coordination  

Coordination is vital for proper HR planning. The human capital management team depends on the support from various departments in deciding on the quantity and quality of employees required to achieve goals. The cooperation of the operations manager is vital for planning. But often, it is seen that many managers in the company are not in favor of coordinating with the HR departments for various reasons. There are many causes for the difference of opinion with the personnel department. These can come in the way of supporting those officials in proper HR planning.

Also Read:  Why is it Important to Study Human Resource Management?

6. Not Knowing The Goals

Human resource planning is done with specific goals in mind. There can be both short-term and long-term goals for this activity. It is not only just about appointing or terminating people. HR planning involves the transfer of people to different departments. Training for employees forms a part of the plan. HR officials must clearly understand the purpose for which this activity is undertaken. Planning can be for different goals during different periods. A lack of understanding of these goals can derail the process. The process can go wrong and result in the wrong positioning of people.

7. Wrong Efforts

HR employees who are tasked with planning must have a deep understanding of the functioning of a company. Different firms function differently, and their manpower requirements will be different. When the organizational setup is not the same everywhere, the planning process and the techniques used cannot be similar. Copying a process from other companies or using technologies just because competitors use them can be the greatest obstacle to proper planning. HR officials must formulate a method that is unique to their firm and one that will suit perfectly.

8. Employee Resistance

Human resource planning happens on many occasions. When there is an expansion, this activity is undertaken. Even when there is a reduction in business and revenues are not up to expectations, there is a restructuring of staff members. This needs planning too. Mergers and acquisitions are events that warrant HR planning. During all these processes, employees are likely to be shifted to other departments or lose their jobs. Some may also see themselves rise to higher positions. Because of this uncertainty, there is resistance from workers for manpower planning, and this can be an obstacle.

Also Read:  Jobs You Can Land and Careers You Can Pursue After an Online HR Certification Course

9. Cost And Time

Planning employee placements can be a time-consuming process. The experts must consider both the short-term and long-term impact of changes in employee strength and positions. In companies where the human resource department has fewer members, it could take them away from regular work. Employers can fear that their normal work will be disturbed and resist planning activities. Planning is good only if it is implemented. Implementation can be expensive if it involves hiring new people and promoting existing ones. This is another reason for business owners to resist HR planning.

10. Fear Of Uncertainties

Despite using the latest analytical technologies, planning can go wrong due to various uncertain factors. Fluctuating trade cycles and market conditions can upset the operations of a company. If employees are hired as per plans and revenues drop suddenly, the company may find itself struggling to pay salaries. Manpower turnover is another factor. Fast turnover of employees can force HR officials to drop long-term plans and resolve to manage contingencies. They may not be able to execute what they have planned. Such fear of uncertain factors can prevent personnel managers from attempting to do HR planning.

11. Lack Of Modern Technology  

Not all companies have the latest HRIS packages. This can be a hurdle for the collection of accurate information. Without such information, HR managers cannot know the exact nature of all employees or their skills. They will not have data about which employees are compatible with which department heads. This is crucial information that is needed when moving people from one area to another. Precise information about which department suffers the most employee attrition is crucial for proper planning. This may not be available in the absence of HR software. This can be a barrier to attempting HR planning.

It is not possible or appropriate to drop human resource planning altogether because there are so many barriers to formulating and implementing it. Those in charge of HR management must look for ways in which planning can be made successful. Here are some ideas that can help to make this process a success.

Also Read:  The Key Responsibilities of a Human Resources Department in a Business

Guidelines To Successful Planning

1. organize well.

Manpower planning is not something that can be done hastily. It must be a well-thought-out process that is done using people who are proficient in it. Personnel managers must select a group of officials who have in-depth knowledge about the company and its functioning. A separate committee must be created to do the planning. They must coordinate with different departments and complete the procedure successfully.

Firstly the HR experts must assimilate all information about employees and their skills. They must see who will give the best results in each position. Such an analysis must be done before starting the planning process. Further, the human resource officials must understand the employee numbers and placements in competing companies. This will give an idea of how to make this process a success.

2. Support From The Top

Human resource planning requires people and money. It is a process that needs a dedicated team to be set up. This team must work out all the details before finalizing the plan. It is also a process that requires money. If the plan must be put into practice, there may be a need for more employees or promoting some of them. This needs extra funds. Both people and funds can be sourced only with the top management’s permission.

HR managers must put up their planning process and its need to the bosses. They must convince the top management about the need for proper HR planning and how it will benefit the company. The improvement in efficiency and the subsequent cost saving must be explained, so that company owners understand the need for the exercise. Once HR managers receive support from the top, the work becomes much easier.

Also Read:  Challenges of Human Resource Management

3. Get Adequate Information

Accurate information is key to the success of any operation. Employee panning is no different. Without proper information, it is not possible to plan the placement of workers. The information must come from both inside and outside. Past information about employee movement and turnover must be analyzed to understand if there are any jobs where workers will not stay for long. Such information is crucial for planning.

Market data is also very important. HR officials must take the help of sales and marketing departments to know the market trends. If there is going to be a decline in the demand for the company’s products, then there can be a drop in revenue. This can affect the planning process. Depending on the growth rate of the company, employee requirements will change.

4. Customize The Plan

Every company is different in its objectives and way of functioning. Even companies in the same industry don’t have similar goals. Some may be looking to expand to new areas, while other firms may try to add new customer segments. This means that the skills and capabilities needed will also be different. The mix of employees must be tailor-made for each company, and this necessitates planning also to be unique.

Those in charge of HR management must make a plan that is customized to suit their firm’s requirements. The plan must be in line with the company’s objectives. It is necessary to have workers with skills that will help in achieving such objectives. Personnel managers must formulate a plan to ensure that suitable employees are available in every department to meet its goals.

5. Make Timely Plans

A company that is starting its operations will have a different requirement from one that is already established and functioning well. An expanding organization will have a need for employees at the various locations they are planning to set up their new offices. Mergers will have different employee requirements. When a company introduces a new item, there may be a need for new employees experienced in that product. Every situation has a different need.

An HR manager must stay updated with the company’s position and what its requirements are. The official must know if there is any change in the objectives of the company. According to this, the planning for human resources will also change. Plans must be made to suit a particular period. One cannot recruit for all times. Human resource departments must know what their bosses are planning and what would be the employee requirements.

Also Read:  How Human Resource Can Helping Business with Talent Acquisition and Management?

6. Participation Of Managers

One of the critical factors in human resources planning is the participation of line managers. They are the ones who are on the ground and will know the requirements of every department. They will know the skills that are required for achieving the company objectives. These officials also know their teams very well and can precisely tell which worker is good in what skills. Such knowledge is crucial for HR planning.

HR managers must take these managers into confidence and convey the information they seek. Such details are available with the line managers, and they will gladly help senior management in this matter. The team leaders are also essential to implement HR plans and make sure employees are following the new plans and changes in their duties without any resistance.

7. Make Plans Flexible

Market situations are changing very quickly. This will require companies to also have capabilities that are relevant at that particular time. It is not just market situations that change. Even internal employee positions can change. The sudden drain of employees to new companies can create a necessity for restructuring. If a company is not able to suddenly fill up the vacancies, it may need to move employees to suitable positions to ensure that critical jobs are completed.

Internal changes can happen in other ways too. If there is a drop in profitability due to raw material prices, then the firm may be forced to have a rethinking about its product mix. This will demand the appointment of people who are familiar with the new products and their production. Even the marketing team will need new members. Such flexibility in the plan must be built-in to take care of rapidly changing situations.

8. Have A Focused Approach

Human capital management can be effective only when there is a focused approach to planning. Personnel managers must consider both the qualitative and quantitative requirements of manpower to achieve company goals. While considering manpower requirements, they must look at skills that are needed. HR officials must try to upskill existing workers to satisfy the capability needs.

Instead of focussing on adding new employees alone, there must be an in-depth study about how the changing needs of a company can be satisfied using employees that are already present. Recruiting new employees is expensive. A high employee turnover can affect a firm’s reputation.

Wrapping Up

HR planning is not given much importance in many firms as unions object to this activity. There is a general feeling that this procedure is aimed at reducing manpower. Such views should be changed by human resource officials, and planning should be brought in as a regular exercise.

More Information:

What is the Role of Financial Manager?

Best Jobs in Supply Chain Management

How to become a Supply Chain Manager?

How to Make a Career in Financial Risk Management

Human Resources Courses: Learn All the Functions of HR 

What Are the Most Popular Careers in Financial Management?

IIM KASHIPUR Executive Development Programme In Strategic Marketing Management

Want to know how can this course help in your profile?

Talk to our counsellors to find a course best for your career.

  • Will get in touch with you soon

Let us call you back

We'll contact you asap.

  • Select a Course Select a course Post Graduate Diploma In Finance Doctor Of Business Administration Doctorate of Business Administration Certificate Program in Applied Data Science and Deep Learning Executive Development Programme in Leadership in Sales & Marketing – The CMO Programme Postgraduate Certificate In Business Analytics B- 6 New Digital Marketing Job Linked Bootcamp Executive Development Programme in Strategic Decision Making in the Digital Era Professional Certificate Program in Health Care Management with immersion Advanced Certificate in Digital Marketing and Communication S4 Advanced Certificate in Digital Marketing and Communication S3 Advanced Certificate in Digital Marketing and Communication S2 Executive Development Programme in Applied Finance Executive Development Programme in Talent Management Executive Certificate Program in HR Analytics Advanced Certificate in Supply Chain Management MBA from Staffordshire Business School Professional Certificate program in Cyber Security Doctor of Business Administration in Emerging Technologies Executive Development Program in HR Analytics from XLRI B6 Executive Development Programme in Digital HR Transformation & AI-Driven HR Analytics MICA-MBMC-14-1223 Professional Certificate Program in Business Analytics B8 Professional Certificate Program In Marketing And Sales Management Executive Development Program in Advanced Financial Management MS in Full Stack Artificial Intelligence and Machine Learning MS in Full Stack Artificial Intelligence and Machine Learning MS in Full Stack Artificial Intelligence and Machine Learning Advanced Program in Strategic Management for Business Excellence -B4 Executive Certificate Program in Supply Chain Management and Analytics Master of Business Administration (MBA) Liverpool Business School -immersion MBA (Global) | Deakin Business School- With immersion Executive Development Program in Human Resource Management from XLRI Jamshedpur -B15(Copy) Advanced Certificate in Sales Forecasting and Demand Planning EXECUTIVE DEVELOPMENT PROGRAMME IN DIGITAL TRANSFORMATION STRATEGIES Executive Development Program in Human Resource Management from XLRI Jamshedpur -B15 Executive Development Program in Financial Analytics B-6 Full Stack Development Bootcamp Professional Certificate Program in Health Care Management Executive Development Program in Talent Management from XLRI- B12 Executive Certificate Programme in Advanced Strategic Management & Innovation Executive Development Programme in Driving Growth – The CXO Programme B-2 Executive Development Program in Project Management For Senior Professionals from XLRI Jamshedpur -B10 Ecommerce Supply Chain Management and Analytics Professional Certificate Program in General Management Batch 6 Master of Science in Computer Science Master of Science in Data Science Executive Post Graduate Programme in Machine Learning & AI Executive Development Programme in Strategic Marketing Management (Batch 2) Advanced Certificate Programme in Big Data Programming Advanced Certificate Program in Devops Advanced Certificate Programme in Cloud Backend Development Advanced Certificate Programme in Blockchain Executive Development Programme in Strategic Brand Management -B2 Advanced Certificate Programme in Cyber Security Executive Program in Supply Chain Management During Uncertain Times -B3 Executive Program in Marketing Strategy -B4 Executive Post Graduate Program in Full Stack Software Development Post Graduate Diploma in Management Post Graduate Certificate in Product Management Leadership and Management in New Age Business Executive Development Program in Data Science using Python, R & Excel B-10 Postgraduate Certificate In Business Analytics B- 6 Postgraduate Certificate in Human Capital Leadership -B-2 Executive Development Program in Digital Marketing B-7 100% Job-Guarantee Post Graduate Certificate in Software Engineering Full Stack Development Bootcamp - 100% job opportunities in MAANG/Top product companies Advanced General Management Program Professional Certificate Programme in HR Management and Analytics Executive Post Graduate Programme in Data Science Executive Post-Graduate Programme in Human Resource Management Professional Certificate Program in Data Science and Business Analytics Executive Post Graduate Program in Data Science and Machine Learning PROFESSIONAL CERTIFICATE PROGRAM IN MARKETING AND SALES MANAGEMENT -BATCH 8 Advanced Program in Leadership in the Digital Era -b3 Executive Development Program in Transformational Leadership -B5 Executive Program in Business Management - Batch 3 Professional Certificate Program in Business Analytics from IIM Kozhikode -B7 Executive Development Program in Strategic Management from XLRI -Batch6 Executive Development Programme In Business Analytics and Big Data Executive Certificate Program in Business Analytics and Big Data Advanced Certificate in Managing Brands and Marketing Communication -B-13 Executive Development Program in Human Resource Management from XLRI Jamshedpur -B14 Executive Development Program in Leadership & Change Management b-9 Certificate Programme In Operations Management And Analytics Professional Certificate Program in Supply Chain Strategy and Management - B5 Executive Development Program in Advanced Financial Management Executive Certificate Program in Applied Financial Risk Management -batch-3 Advanced Certificate in Digital Marketing and Communication Global Doctor of Business Administration Executive Development Programme in Strategic Marketing Management (Batch 1) Executive Development Program in HR Analytics -Batch 5 Executive Development Programme in Strategic Brand Management Master of Business Administration (MBA) Liverpool Business School Professional Certificate Program in Business Analytics from IIM Kozhikode Advanced Program in Strategic Management for Business Excellence Executive Development Program in Financial Analytics Advanced Certificate in Advertising Management and Public Relations Executive Development Programme Digital HR Transformation & AI-Driven HR Analytics Executive Program in Business Management Executive Program in Supply Chain Management During Uncertain Times CERTIFICATE PROGRAMME IN STARTUP BOOT CAMP Professional Certificate Program in Supply Chain Strategy and Management CERTIFICATE PROGRAMME IN INDUSTRIAL DESIGN, INNOVATION AND ENTREPRENEURSHIP Executive Development Program in HR Analytics B4 Executive Program in Marketing Strategy

Call us to get more information

Our counsellors will call you back in next 24 hours to help you with courses best suited for your career

  • Human Capital Leadership XLRI Jamshedpur

*I hereby authorize Talentedge to contact me. It will override my registry on the NCPR.

Fee Structure

Program Fees

INR /- +GST

EMI Partners

No Cost EMI - 9 Months

Standard emi - 12 months, standard emi - 18 months, standard emi - 24 months.

* I accept Privacy Policy and Terms & Conditions. I appoint MyMoneyMantra as authorized representative to receive my credit information from Experian for the purpose of providing access to credit & targeted offers ('End Use Purpose') as defined in given Terms & Conditions.

* Loan Processing fee to be paid directly to the Loan Provider.

Request a call back

Let us help you guide towards your career path

  • Non-biased career guidance
  • Counselling based on your skills and preference
  • No repetitive calls, only as per convenience

The new possible: How HR can help build the organization of the future

Business leaders watching their organizations experience profound upheaval because of the COVID-19 crisis may find it difficult to understand what it all means until the dust settles.

But the pandemic hasn’t afforded them, or any of us, that luxury. It has created profound and immediate changes to how societies operate and how individuals interact and work. We have all witnessed an at-scale shift to remote work, the dynamic reallocation of resources, and the acceleration of digitization and automation to meet changing individual and organizational needs.

Organizations have by and large met the challenges of this crisis moment. But as we move toward imagining a postpandemic era , a management system based on old rules—a hierarchy that solves for uniformity, bureaucracy, and control—will no longer be effective. Taking its place should be a model that is more flexible and responsive, built around four interrelated trends: more connection, unprecedented automation, lower transaction costs, and demographic shifts.

To usher in the organization of the future, chief human-resources officers (CHROs) and other leaders should do nothing less than reimagine the basic tenets of organization. Emerging models are creative, adaptable, and antifragile . 1 Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder , New York, NY: Random House Trade Paperbacks, 2012. Corporate purpose fuels bold business moves. “Labor” becomes “talent.” Hierarchies become networks of teams . Competitors become ecosystem collaborators. And companies become more human: inspiring, collaborative, and bent on creating an employee experience that is meaningful and enjoyable .

After the pandemic erupted last year, we spoke with 350 HR leaders about the role of uncertainty in their function. They told us that over the next two years they wanted to prioritize initiatives that strengthen their organization’s ability to drive change in leadership, culture, and employee experience.

How are they doing? In this article, we discuss ways that CHROs can continue to meet the moment by rethinking processes in three fundamental areas: identity, agility, and scalability.

How HR fits in the big picture

McKinsey has recently conducted research on how businesses can best organize for the future . The experimentation underway suggests that future-ready companies share three characteristics: they know what they are and what they stand for; they operate with a fixation on speed and simplicity; and they grow by scaling up their ability to learn and innovate.

HR can help propel this transformation by facilitating positive change in these three key areas, as well as with nine imperatives that radiate out from them (Exhibit 1).

Identity: HR can clarify the meaning of purpose, value, and culture

Companies that execute with purpose have greater odds of creating significant long-term value generation , which can lead to stronger financial performance, increased employee engagement, and higher customer trust.

Home in on the organization’s purpose

What is your company’s core reason for being, and where can you have a unique, positive impact on society? Now more than ever, you need good answers to those questions—purpose is not a choice but a necessity.

CHROs play a vital role in making sure the organization is living its purpose and values . HR can articulate and role-model desired individual mindsets and behaviors linked to purpose by identifying “moments that matter” in the company’s culture and translating purpose into a set of leadership and employee norms and behaviors.

For instance, commercial-vehicle manufacturer Scania holds an annual “Climate Day,” during which the company stops operations for one hour to hold sustainability training, in line with its purpose to “drive the shift toward a sustainable transport system.” 2 Scania Annual and Sustainability Report 2019 , Scania, scania.com.

HR can also ensure that clear changes are made to recruitment and capability-building processes by determining the characteristics of a “purpose driven” employee and embedding these attributes within recruitment, development, and succession planning.

HR can also incorporate purpose-driven metrics into compensation and performance decisions. Companies across industries have embarked on these metrics lately. For example, Seventh Generation, a maker of cleaning and personal-care products, recently built into its incentive system sustainability targets for the company’s entire workforce, in service of its goal of being a zero-waste company by 2025. Shell has plans to set short-term carbon-emissions targets and link executive compensation to performance against them.

Think deeply about talent

Organizations that can reallocate talent in step with their strategic plans are more than twice as likely to outperform  their peers. To link talent to value, the best talent should be shifted into critical value-driving roles. That means moving away from a traditional approach, in which critical roles and talent are interchangeable and based on hierarchy.

Getting the best people into the most important roles requires a disciplined look at where the organization really creates value and how top talent contributes . Consider Tesla’s effort to create a culture of fast-moving innovation, or Apple’s obsessive focus on user experience. These cultural priorities are at the core of these companies’ value agendas. The roles needed to turn such priorities into value are often related to R&D and filled with talented, creative people.

To enable this shift, HR should manage talent rigorously by building an analytics capability to mine data to hire, develop, and retain the best employees. HR business partners, who articulate these staffing needs to the executive management team, should consider themselves internal service providers that ensure high returns on human-capital investments. For example, to engage business leaders in a regular review of talent, they can develop semiautomated data dashboards that track the most important metrics for critical roles.

Create the best employee experience possible

Companies know that a better employee experience means a better bottom line. Successful organizations work together with their people to create personalized, authentic, and motivating experiences that tap into purpose to strengthen individual, team, and company performance.

The HR team plays a crucial role in forming employee experience. Organizations in which HR facilitates a positive employee experience are 1.3 times more likely to report organizational outperformance, McKinsey research has shown . This has become even more important throughout the pandemic, as organizations work to build team morale and positive mindsets .

HR should facilitate and coordinate employee experience. Organizations can support this by helping HR evolve, strengthening the function’s capability so that it becomes the architect of the employee experience. Airbnb, for instance, rebranded the CHRO role as global head of employee experience. PayPal focused on HR’s capability and processes to create a better experience for employees, including coaching HR professionals on measuring and understanding that experience, and using technology more effectively.

Strengthen leadership and build capacity for change

Culture is the foundation on which exceptional financial performance is built. Companies with top-quartile cultures (as measured by McKinsey’s Organizational Health Index ) post a return to shareholders 60 percent higher  than median companies and 200 percent higher than those in the bottom quartile.

Culture change should be business-led, with clear and highly visible leadership from the top, and execution should be rigorous and consistent. Companies are more than five times more likely to have a successful transformation  when leaders have role-modeled the behavior changes they were asking their employees to make.

To strengthen an organization’s identity, HR should ask the following questions:

  • How can we develop an energizing sense of purpose that has a tangible impact on our strategic choices and ways of working?
  • How can we identify key talent roles and focus them on creating value?
  • How can we build a data-driven, systemic understanding of our organizational health?

Agility: HR’s role in flattening the organization

Organizational agility improves both company performance and employee satisfaction . HR can be instrumental in shifting an organization from a traditional hierarchy to a marketplace that provides talent and resources to a collection of empowered small teams, helping them to achieve their missions and acting as a common guiding star.

Adopt new organizational models

For instance, as a part of a multiyear agile transformation, a large European bank worked to establish an in-house agile academy led jointly by coaches and the HR function to drive capability building for the transformation.

To be successful, a transformation should touch every facet of an organization—people, process, strategy, structure, and technology. HR can help create an iterative approach by developing core elements of the people-management process, including new career paths for agile teams, revamped performance management, and capability building. It should lead by example as well, by shifting to agile “flow to work” pools  in which individuals are staffed to prioritized tasks.

Create a flexible—and magnetic—workforce

Because many roles are becoming disaggregated and fluid, work will increasingly be defined in terms of skills . The accelerating pace of technological change is widening skill gaps, making them more common and more quick to develop. To survive and deliver on their strategic objectives, all organizations will need to reskill and upskill significant portions of their workforce over the next ten years.

According to a 2018 McKinsey survey , 66 percent of executives said that “addressing potential skills gaps related to automation/digitization” within their workforces was at least a “top ten priority.” HR should help prioritize these talent shifts.

In a more recent survey McKinsey conducted with global executives  about the postpandemic workforce, more than a third of respondents said that their organizations were unprepared to address the skill gaps exacerbated by automation and digitization. The shift to digitization has accelerated during the pandemic: 85 percent of companies have picked up the pace of their digitization (including a 48 percent rise in the digitization of customer channels). In light of these trends and the need to shift skills, there is a clear business rationale behind workforce strategy and planning.

HR should be a strategic partner for the business in this regard, by ensuring that the right talent is in place to deliver on core company objectives. HR can also drive workforce planning by reviewing how disruptive trends affect employees, identifying future core capabilities, and assessing how supply and demand apply to future skills gaps.

Moving to a skills focus also requires innovative sourcing to meet specific work-activity needs (for example, the gig economy and automation), and changing which roles companies need to source with traditional full-time-equivalent positions and which can be done by temporary workers or contractors. In the survey with global executives, about 70 percent said that two years from now they expect to use more temporary workers and contractors than they did before the COVID-19 crisis.

During the pandemic, we’ve seen how organizations have come together to utilize talent with transferable skills. For instance, McKinsey has supported Talent Exchange , a platform that uses artificial intelligence to help workers displaced by the crisis.

Make better decisions—faster

Companies that make decisions at the right organizational level  and that have fewer reporting layers are more likely to deliver consistently on quality, velocity, and performance outcomes and thus outperform their industry peers. The pandemic has trained the spotlight on the power of fast decision making, as many organizations have had to move dramatically more quickly than they had originally envisioned. For example, one retailer had a plan for curbside delivery that would take 18 months to roll out; once the COVID-19 crisis hit, the plan went operational in just two days.

HR can help with strong decision making by empowering employees  to take risks in a culture that rewards them for doing so. McKinsey research revealed that employees who are empowered to make decisions and who receive sufficient coaching from leaders were three times more likely to say that their companies’ delegated decisions were both high quality and speedy .

Introduce next-generation performance management

Companies are experimenting with a wide variety of approaches to improve how they manage performance. According to a McKinsey Global Survey , half of respondents said that performance management had not had a positive effect on employee or organizational performance. Two-thirds reported the implementation of at least one meaningful modification to their performance-management systems.

We identified three practices—managers’ coaching, linking employee goals to business priorities, and differentiated compensation—that increase the chances that a performance-management system will positively affect employee performance. HR plays an important role in embedding these practices in performance management by supporting the goal-setting process, decoupling the compensation and development discussion, investing in manager’s capability building, and embedding technology and analytics to simplify the performance-management process.

To strengthen an organization’s agility, HR should ask the following questions:

  • Can we enable more effective decision making by pushing decisions to the edges of the organization, creating psychological safety  that empowers people, and building capabilities?
  • How do we accelerate the shift to a more diverse and deeply motivated talent base, one that is supported through a human-centric culture that enables outperformance and superior experience?
  • Which organizational areas or end-to-end value-creation streams would most benefit from a shift to new ways of working and organizing?

Scalability: How HR can drive value creation

The new normal of large, rapidly recurring skills gaps means that reskilling efforts must be transformational, not business as usual or piecemeal.

Lean into a learning culture by reskilling and upskilling

Effective reskilling and upskilling will require employees to embark on a blended-learning journey that includes traditional learning (training, digital courses, job aids) with nontraditional methods (enhanced peer coaching, learning networks, the mass personalization of change , “nudging” techniques).

For instance, Microsoft shifted from a “know it all” to a “learn it all” ethos, incorporating open learning days, informal social learning opportunities, learning data for internal career paths, and new platforms and products for its partner network.

Memo to HR: Look in the mirror

To drive and facilitate these workforce initiatives, HR must transform itself first. Talent is consistently ranked as a top three priority for CEOs, yet many lack confidence in HR’s ability to deliver. 3 Dominic Barton, Dennis Carey, and Ram Charan, “People before strategy: A new role for the CHRO,” Harvard Business Review , July– August 2015, Volume 93, Number 7–8, pp. 62–71, hbr.org. The HR function is often overburdened with transactional work and not well equipped to create value for the enterprise.

Yet people-first organizations look at business problems from the perspective of how talent creates value, and HR is well positioned to bring data-driven insights to talent decisions. HR can arm itself with data-driven insights and people analytics to support talent-driven transformation, and HR business partners can then consistently make talent decisions based on data.

Create a value-enhancing HR ecosystem

McKinsey analysis has shown that a preponderance of executives recognize how much external partnerships help companies differentiate themselves. Increased value can be created through ecosystems where partners share data, code, and skills. Success now requires “blurry boundaries” and mutually dependent relationships to share value. The need of the hour is for HR to collaborate on and leverage the landscape of HR tech solutions across the employee life cycle—from learning, talent acquisition, and performance management to workforce productivity—to build an effective HR ecosystem.

To strengthen an organization’s scalability, HR should ask the following questions:

  • How can we set up platforms spanning multiple players in the ecosystem and enable new sources of value and employee experience through them?
  • How can we become the best company to partner with in the ecosystem? How can we set ourselves up for fast partnering and make the ecosystem accessible?
  • What are the critical skills that drive future value creation and how can we upskill our talent base accordingly?

Looking ahead: How transformation happens

As the organization of the future takes shape, HR will be the driving force for many initiatives: mapping talent to value; making the workforce more flexible; prioritizing strategic workforce planning, performance management, and reskilling; building an HR platform; and developing an HR tech ecosystem. For other initiatives, HR can help C-suite leaders push forward on establishing and radiating purpose, improving employee experience, driving leadership and culture, and simplifying the organization.

Given the magnitude of the task and the broad portfolio of value-creating HR initiatives, prioritization is critical.

In May of 2020, HR leaders attending a McKinsey virtual conference indicated that over the next two years, they wanted to prioritize initiatives that strengthen agility and identity. That included 27 percent who said that they would focus on responding with agility and 25 percent who prioritized driving leadership, culture, and employee experience. Next came mapping talent to value and establishing and radiating purpose, each at 13 percent (Exhibit 2).

At a second conference for HR leaders, 4 Survey of human-resources leaders at “Reimagine: Organizing for the future,” a McKinsey virtual conference held in June 2020. about half of the assembled CHROs said that they were focusing on reimagining the fundamentals of the organization and rethinking the operating model and ways of working in the next normal.

We see organizations making this shift. Throughout the pandemic, HR has played a central role in how companies build organizational resilience and drive value . CHROs and their teams can continue on this path by connecting talent to business strategy and by implementing changes in the three core areas of identity, agility, and scalability, as well as the nine imperatives that flow from them.

A more flexible and responsive model will also help organizations meet coming demographic shifts and other workforce changes. Millennials are becoming the dominant group in the workforce (with Gen Z close behind), creating novel challenges for organizations to meet their needs. The prominence of the gig economy and alternate models of working will only grow, with 162 million workers in the European Union and the United States working independently— 70 percent of them by choice . And the rapid spread of digital technology and automation is dramatically reshaping the global economy, with half the tasks people perform already automatable today.

These trends are not new, but they are approaching tipping points, placing organization at the top of the CEO agenda. CHROs can help leadership by transforming their own HR organizations: developing and reinforcing clear priorities; embracing new ways of working, including rapid iteration and testing with the business and seeking explicit feedback; and revamping the HR skill set by embracing agility and digital capabilities.

While clearly a trial by fire, the pandemic also provides an opportunity for HR to accelerate its shift from a service to a strategic function, helping to shape a more dynamic organization that is ready to meet the postcrisis future.

Asmus Komm is a partner in McKinsey’s Hamburg office, Florian Pollner is a partner in the Zurich office, Bill Schaninger is a senior partner in the Philadelphia office, and Surbhi Sikka is a consultant in the Gurugram office.

The authors wish to thank Talha Khan for his contributions to this article.

This article was edited by Barbara Tierney, a senior editor in the New York office.

Explore a career with us

Related articles.

Organizing for the future: Nine keys to becoming a future-ready company

Organizing for the future: Nine keys to becoming a future-ready company

HR says talent is crucial for performance—and the pandemic proves it

HR says talent is crucial for performance—and the pandemic proves it

The future of work after COVID-19

The future of work after COVID-19

Human Resource Planning (HRP): A Step-By-Step Guide

Human Resource Planning (HRP): A Step-By-Step Guide

In today’s rapidly evolving business landscape, having a plan in place for managing your human capital is key — and that’s where human resource planning (HRP) comes in. Human resource planning plays a critical role in making sure that your organization is well-equipped with the right talent at the right time.

Today, we’re walking through the intricacies of HRP so you can implement this practice in your organization.

What Is Human Resource Planning?

Human resource planning, or HRP, stands out as a strategic and methodical process designed to ensure that your organization fully leverages its human capital . It is not a one-time event but rather a continuous journey toward operational excellence and strategic alignment.

At its core, HRP aims to establish a seamless alignment between your employees and their respective roles, meticulously crafting a workforce that is both skilled and adequately sized to meet your organizational demands.

This proactive approach goes a long way in safeguarding your business against potential manpower shortages or surpluses, ensuring that you are well-prepared for the future.

Why Is HRP Important?

HRP is crucial for syncing your current workforce with your future needs. It entails a rigorous analysis of your existing staff, evaluating their skills, competencies, and performance.

This is where metrics come into play, providing a quantitative backbone to your workforce planning efforts. By leveraging data-driven insights, you can make informed decisions, ensuring that your team is not only talented but also aligned with your business objectives.

HRP doesn’t stop there, though — it’s a comprehensive approach that intertwines various facets of human resource management. Staffing, forecasting , performance management, and employee retention all fall under its umbrella. Each of these elements is crucial in building and maintaining a robust workforce.

In terms of staffing, HRP helps you decipher not just the number of employees you need, but also the types of skills and competencies they should possess. Forecasting, on the other hand, empowers your HR department to anticipate future demand, aligning your human resources with your company’s strategic direction.

Performance management is another vital cog in the HRP machine. It ensures that your employees are not just present but also productive and engaged. This, in turn, enhances employee retention, fostering a company culture that values growth, stability, and satisfaction.

HRP even plays a role in shaping your company culture . By aligning your human resources with your company’s needs and values, you create an environment where employees feel valued and aligned with the organization’s goals.

What Are the Advantages of Human Resource Planning?

At its core, human resource planning places the right talent in the right place at the right time, ensuring that your organization’s objectives align with your workforce’s capabilities. Now, let’s talk about the advantages of HRP and how it can lay the foundation for organizational success.

Ensures Effective Management of Current Employees

Strategic workforce alignment is at the heart of HRP. With effective human resource management, HR professionals can ensure that the current workforce is in sync with the company’s overarching goals.

This alignment can translate to better resource allocation, more informed decision-making, and enhanced overall performance.

Reveals Knowledge Gaps in the Workforce

The ever-evolving business landscape means organizations need to be adept at forecasting and adapting — and human resource planning plays a role here.

By examining current employees’ skill sets and comparing them with future needs, knowledge gaps can become more apparent. Addressing these gaps, whether through hiring new talent or upskilling existing employees, helps you ensure that your business stays competitive.

Balances HR Costs

Cost-effectiveness is crucial for the HR planning process. By anticipating future human resource needs, last-minute external recruitments — which often come with high costs — can be avoided.

Plus, recognizing surplus areas within your current workforce allows for internal reassignments to take place, cutting down on recruitment and onboarding expenses.

Keeps Companies Adaptable to Change

Change is constant, especially in today’s fast-paced business world, and human resource planning positions organizations to seamlessly navigate these changes.

From staying updated with industry trends to adapting to regulatory shifts, an HR department’s proactive planning ensures businesses remain resilient and agile. With Mosey , you can more effectively track, manage, and stay on top of changing regulations and requirements, making HR compliance a breeze.

Helps Secure Long-Term Growth

Another key component of HRP is succession planning. Identifying roles and preparing a talent pipeline ensures that your organization isn’t caught off-guard if leadership positions open up.

This planning not only opens the door to future leaders, but also ensures that institutional knowledge is retained, fueling your business’s long-term growth and stability.

Contributes to Organizational Goals

The nexus between human resource planning and organizational goals is undeniable. By streamlining the hiring process, ensuring employee satisfaction , and fostering employee retention, HRP contributes directly to the achievement of business objectives.

When employees see clear growth trajectories and development avenues, their commitment to the company’s vision intensifies, driving the organization closer to its goals.

What Are the Steps for Human Resource Planning?

HRP ensures that businesses are well-equipped, both in terms of the quantity and quality of their workforce, to meet their evolving goals and challenges. So, how can you actually navigate the intricacies of HRP? Here’s a step-by-step walkthrough of the essential phases that make up the human resource planning process.

Analyze Employee Skills and Performance

Human resource planning centers around an understanding of your company’s current workforce.

During this initial phase, the HR department dives into understanding the number of employees, their competencies, qualifications, positions, benefits, and performance levels. This skill inventory ensures that HR professionals have a clear picture of the strengths and areas for improvement in the present workforce.

Research Industry Trends and Forecasts

Effective human resource planning can also help you predict, and plan for, the future, so the next stage is to outline what your company will need in terms of human capital in the foreseeable future.

This forecasting phase requires the HR department to consider various factors, such as potential promotions, retirements, layoffs, and transfers. External conditions, like emerging technologies or industry shifts, can also have a significant impact on labor demand. Ensuring you stay ahead in terms of industry trends helps you align your staffing needs more effectively.

Conduct Demand Forecasting

Having a clear understanding of both the present workforce, potential employees, and future needs is vital to bridge the two through demand forecasting. This step in the HR planning process involves creating a gap analysis that points out discrepancies between the current workforce and future human resource demands.

This type of analysis leads to important questions like:

  • Should current employees learn new skills?
  • Is there a need for more managers?
  • Are all employees fully utilizing their competencies in their present roles?

Answering these questions is key to crafting a strategic human resource plan that aligns with both the present and the future.

Determine Future Human Resource Needs

Once your demand forecasting has highlighted the shortages or surpluses in terms of competencies or number of employees, the next step is to determine the specific future human resource needs.

Whether it’s upskilling the current employees, succession planning for key roles, or identifying the need for new hires, this phase ensures that your business is poised for future growth without any HR hiccups.

Align HR Needs With Organizational Strategy

Human resource planning is intertwined with your broader business goals and strategies. Once your HR needs are identified, it’s important to make sure those needs align with your organizational goals.

This strategic planning phase ensures that every hiring process, training initiative, or retention effort contributes directly to your company’s overarching objectives.

Plan for Employee Development and Training

Once your future human resource needs are aligned with your company strategy, it’s time to implement plans for employee development. This might involve setting up training programs, workshops, or certifications to upskill current employees.

Ensuring your workforce is equipped with the right skills enhances employee satisfaction and retention and gives your business a competitive advantage.

Implement Plan for Forecasted HR Needs

The culmination of the human resource planning process is the implementation of your action plan. Taking cues from the gap analysis and strategic alignment, HR can now roll out a well-thought-out plan.

This could involve tweaking job descriptions, initiating new hiring processes, onboarding new employees, or even revisiting HR policies such as vacation, sick days, or overtime compensation. Collaboration with all departments is key here to ensure the successful execution of your plan, ensuring the HR strategies benefit the organization as a whole.

Support HRP Efforts With Mosey

From identifying when and where to open payroll accounts to managing workers’ compensation and paid family medical leave, Mosey simplifies the complex web of compliance and regulatory demands.

Why not explore how Mosey can streamline your HR processes and compliance management ? Our platform is designed to provide clarity, guidance, and ease, allowing you to focus on what matters most — nurturing and growing your most valuable asset, your employees. Try Mosey today .

Read more from Mosey:

  • Compliance Automation: How It Works & Its Value
  • Sole Proprietorship vs. LLC: Key Differences
  • What Is a Foreign Corporation? FAQs Explained
  • What Is a C Corporation (C Corp)?
  • What Is Payroll? A Guide for Small Business Payroll
  • What Is a Legal Entity? Definition & Examples
  • What Is SUI? State Unemployment Insurance FAQs

Ready to get started?

Sign up now or schedule a free consultation to see how Mosey transforms business compliance.

importance of human resource planning in business

Mosey has everything you need to get compliant in all 50 states in one, easy to use, platform.

Sling is now Sling by Toast! Learn more

More Features

importance of human resource planning in business

  • Restaurants
  • Get Started

Group of employees working on laptops

Human Resource Planning: Definition, Objectives, And Steps

  • Employee Management , Templates & Guides

Human resource planning is an essential part of every successful business. Unfortunately, many managers neglect this vital practice for other, easier tasks because they don’t understand what this type of planning requires.

Other times, managers may not understand how pivotal human resource planning is to their long-term corporate strategy  and the ultimate success of their business.

That’s where Sling  can help. In this article, we define human resource planning, outline its objectives, and provide a step-by-step guide to implementing this crucial practice in your business.

Table Of Contents

Human Resource Planning Defined

Human resource planning objectives, hrp vs. shrm, hrp and organizational strategy, steps in human resource planning, why human resource planning is important, challenges of human resource planning, scheduling and communication for effective hrp.

Human resource planning (or HRP for short) is the ongoing process of systematically planning ahead to optimize and maximize your business’s most valuable asset — high-quality employees .

When you incorporate HRP into every aspect of your strategy — functional , business , or organizational  — you streamline the process of creating the best fit between available jobs and available employees. All while avoiding a shortage or surplus in your workforce.

As simple as that may sound, there’s more to human resource planning than setting up a system and implementing it in your organization.

The objectives of HRP are very specific and can mean the difference between success or stagnation. We’ll discuss those objectives in the next section.

group of coworkers having a meeting

As we mentioned earlier, human resource planning is about matching the right employees with the right jobs in your business.

You can do this while interviewing  prospective employees, or even during the performance review  of a long-time team member who is reaching out for more responsibility.

While matching employees to jobs is a big part of human resource planning, the goals of HRP don’t stop there. Other HRP objectives include:

  • Adapting to rapid technology  changes
  • Powering product innovation
  • Adjusting to a more globalized economy
  • Preparing for generational and cultural  shifts
  • Anticipating job and skill changes
  • Facilitating growth
  • Improving business operations
  • Mitigating risk
  • Preventing talent shortage or surplus
  • Complying with local, state, and federal regulations
  • Implementing a successful onboarding process

As you can see, HRP is integral to the successful operation of your business and its growth over both the short- and long-term.

Because this process is connected to every aspect of your business , you may feel overwhelmed by the prospect of creating a new HRP strategy.

Don’t let this prevent you from implementing a system that can revolutionize the way your business operates — both now and in the future .

Keep in mind that human resource planning doesn’t have to address all of the objectives on this list from the moment it goes into effect. Start small and expand into different areas once you’ve addressed one or two objectives.

Later on in this article, we discuss a step-by-step method for producing a human resource planning strategy for your business.

But, first, let’s take a moment to discuss one of the most-confused aspects of human resource planning: how it differs from strategic human resource management.

Three employees in a meeting

Before we delve into the minutiae of human resources , let’s put the two relevant definitions side-by-side to see how they compare.

Human Resource Planning : HRP is the ongoing process of systematically planning ahead to optimize and maximize your business’s most valuable asset — high-quality employees.

Strategic Human Resource Management : SHRM is a holistic approach to assembling the best team for your business’s growth and success.

At first glance, it may appear that human resource planning is the same thing as strategic human resource management under a different name. They seem so similar because one is actually part of the other.

In this case, HRP is a small part of SHRM. Viewed from a different perspective, SHRM contains and governs HRP.

It’s very much like a set of nesting dolls: the smallest one (HRP) fits nicely into the next largest (SHRM), which, in turn, fits into the next largest, and so on.

For practical purposes, it helps to think about human resource planning as the frontline, boots-on-the-ground application, while strategic human resource management is the guiding principle behind those applications.

In other words, SHRM is the why to HRP’s what.

Another way to think about SHRM and HRP is to view your business as a large, complicated machine.

Human resource planning is one component (a gear, for example) that works with other similar components (e.g., production, logistics, shipping, management, etc.) to keep the machine running.

Strategic human resource management, on the other hand, takes a step back and analyzes the machine itself.

SHRM looks at the performance of each component (each department in your business), how they work together to make everything run smoothly, and what the business as a whole can do to improve.

human resource planning

Let’s return, for a moment, to the example of the nesting dolls mentioned earlier.

We established that human resource planning is the smallest doll and that strategic human resource management is the next largest doll. But what comes after that?

What’s the next largest doll in the series? Organizational strategy.

Organizational strategy , at its most basic, is a plan that specifies how your business will allocate resources to support infrastructure, production, marketing, inventory , and other business activities.

How does this affect human resource planning? Organizational strategy directs strategic human resource management directs human resource planning.

In many ways, the strategy side of your business mirrors the relationship between SHRM and HRP.

Organizational strategy is subdivided into three distinct categories: corporate strategy, business strategy, and functional strategy. Just like SHRM and HRP, each level is a part of the one above it.

Corporate level strategy is the main purpose of your business — it’s the destination toward which your business is moving.

Business level strategy is the bridge between corporate level strategy and much of the “boots-on-the-ground” activity that occurs in functional level strategy.

Functional level strategy is the specific actions and benchmarks you assign to departments and individuals that move your business toward the goals created by your corporate level strategy. They are a direct offshoot of your business level strategies.

With those categories in mind, we start to see the bigger picture of your business. SHRM is a component of your business level strategy, while HRP is a component of your functional level strategy.

Now that you understand the theory behind human resource planning, let’s focus our attention on the practice itself.

Business owners in a private office discussing human resource planning

1) Analyze Organizational Strategy

Any successful workforce-management  program — including human resource planning — is a direct offshoot of your business’s organizational strategy.

Therefore, you should always start your HRP process by analyzing the goals and plans of your organization. With those strategies in mind, you can then move on to crafting a general human resources mission statement.

From there, you can work your way through the various departments in your business to address issues such as:

  • Recruitment
  • Employee relations

When you have that information written down, you can craft a human resource plan to help your business reach and maintain its goals.

2) Inventory Current Human Resources

After analyzing your organizational strategy, it’s time to take stock of your business’s current human resources.

In the process, it’s beneficial to investigate such variables as:

  • Total number of team members you employ
  • Who works in what department
  • Skills of each employee
  • Performance reviews
  • Team and individual potential

With that data in hand, you then make sure that your existing workforce  is large enough and skilled enough to cover current demands before moving on to the next step in this guide.

3) Forecast The Future Of Your Workforce

Step three is all about planning, prediction, and preparing for the future.

Guided by your organizational strategy and your current employee data, do your best to forecast what the future of your workforce will look like. Be sure to incorporate any goals and plans into your forecast.

Examine variables such as:

  • New product offerings
  • New services
  • A second (or third) location
  • Labor costs
  • Vendor and supplier  relations
  • Cost of goods sold

A forecast of this type, coupled with the workforce data from step two, gives you an accurate picture of where your business is right now and where you want it to be five, 10, even 15 years down the road.

4) Estimate Gaps

Armed with the information you’ve produced so far, you can now estimate whether or not there are any gaps in your human resource strategy.

Will you need more employees to get your business from the present to where you want it to be in the future? If so, how many? Will you need fewer employees? If so, how many?

Does your forecast call for a reallocation or redistribution of current team members? If so, how would you go about doing this?

Once you’ve estimated the gaps between your current and future workforce numbers, you can move on to step five, where all the planning and brainstorming comes to fruition.

5) Formulate An Action Plan

Formulating an action plan is where the rubber meets the road, so to speak.

Your action plan should take into account all the analysis that came before it — organizational strategies, current HR inventory, HR forecast, and gaps between present and future — to create a step-by-step system for taking your business from point A to point B.

The action plan will be different for every business. Some businesses may need to begin recruiting  and training . Other businesses may need to promote  or transition their existing workforce.

Still other businesses may need to develop a retirement  program or a redeployment process to deal with surplus employees.

When crafting your plan, start with the theoretical — evolve from X to Y — and then move on to actionable steps that your HR department can take — hire and retain  two new team members every year, for example — to transform the theory into reality.

With these steps in mind, you can implement a successful human resource planning system into your business, no matter how many employees you have.

As you go about implementing your business’s HRP, don’t neglect the foundation of all good employer/employee relations: scheduling and communication. We’ll discuss this topic at the end of the article.

6) Integrate With The Rest Of The Company

Two Coworkers doing human resource planning

Now that you’ve got an action plan, your human resource planning efforts will start to yield results.

That said, the integration stage is the most difficult of the entire process, so be ready for some speed bumps.

Without proper preparation — and even with proper preparation, in some cases — both management and frontline employees may show resistance to the proposed changes.

In addition, all departments within your business work together in one way or another (even if it doesn’t at first appear so). This makes the integration phase challenging on many levels.

One of the best ways to integrate human resource planning into the rest of the company is to start with the recruitment , hiring , and training practices in your business.

Once you’ve brought in new, high-potential employees and have begun funneling them into the various departments, you can start to make other changes to accommodate these new hires.

Integrating slowly and pairing the changes with new employees who will further the goals and productivity of each department makes putting your new human resource planning into place much easier.

7) Monitor, Evaluate, And Adjust

The final step in human resource planning is to monitor the new practices, evaluate them for their effectiveness, and adjust as necessary.

In addition to monitoring each department and your business as a whole, it’s also beneficial to zoom in on how any changes made affect the individual employee.

To take the pulse of the front-line worker, include questions about your human resource planning during mid-year reviews and performance appraisals . You can even ask for their opinion when you have them complete an employee self-evaluation .

Monitoring and evaluating in this way will help you get a detailed view of how any new policies, procedures, and practices affect the men and women in the trenches.

Once you have all the information you need, you can then take steps to adjust your human resource planning accordingly.

For that, it’s best to return to the top of this list and start again at step one, incorporating what you learned from the previous run-through.

In essence, then, you can view this list as less of a straight line and more of a circle, with step seven leading directly back into step one. As such, your HRP should be in a constant state of development.

Management doing human resource planning

Your business can function without HRP, and, yes, it can be a challenge to get the plans in place, but the benefits far outweigh the drawbacks.

Among other things, HRP can help your business:

  • Anticipate workforce needs in a changing market
  • Plan for short-term and long-term growth
  • Improve operations
  • Facilitate staffing changes
  • Avoid talent shortage
  • Stay ahead of the technology curve
  • Remain agile as the market evolves
  • Maintain compliance with government laws and regulations

Human capital management is one of the most important parts of your business. HRP helps you maximize that potential.

As beneficial and powerful as human resource planning is, it is not without its drawbacks and challenges.

For one thing, HRP relies on forecasting, which is an imperfect art and is never — and can never be — 100% accurate.

Similarly, you can never account for the ambiguity in the market and the rapid change that could come out of nowhere.

There may be some error when you forecast the future of your workforce. That error will affect the other steps on this list for the good or the bad (depending on how accurate your forecast is).

Realistically, though, that can’t be helped and all you can do is give it your best shot. If you discover errors in your forecasting, you can always return to step one and start the process over with the new information.

Other challenges of the human resource planning process include:

  • Resistant workforce
  • Inefficient information systems
  • Overall cost
  • Time and effort

That said, when you are aware of these challenges going in, you can take steps to overcome them right away so that you can get to the benefits sooner.

Sling tool for human resource planning

Scheduling and communication are key components of an effective human resource planning process.

Your team’s schedule is the cornerstone on which you build their work experience. If the schedule doesn’t satisfy all parties — employees and management alike — your business suffers.

Similarly, clear communication with all your employees fosters a strong team and keeps everyone in the loop about employee performance, inventory, standard operating procedures , customer satisfaction , and your business as a whole.

In the 21st century, the best schedules are created and the best communication maintained with help from dedicated software like Sling .

Whether your business has one shift  or three, offers flextime  or a compressed workweek , or works a 9-to-5 work schedule or a 9/80 work schedule , Sling can help simplify the schedule-creation process.

And with advanced communication features built in, Sling is the only tool you’ll ever need to keep your employees informed about your business and connected with each other.

In fact, we developed the Sling app  to streamline communication as well as make scheduling, tracking labor, finding substitutes, assigning tasks, and building employee engagement  extremely simple.

There are so many ways Sling can help improve your human resource planning that we don’t have room to talk about them here. So instead of reading about it, why not try it out?

Sign up for a free account and see for yourself how Sling can help you implement the necessary strategies  to make your team and your business successful.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com  today.

See Here For Last Updated Dates: Link

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

Find the article useful? Share with others:

New call-to-action

Related articles

Sign with the words info and strategy

Strategic Human Resource Management: What Is It And Why Is It Important?

Most businesses have some type of human resource management plan — even if it�...

human resource management meeting

Human Resource Management: What Is It And Why Is It Important?

Regardless of the size of your team, human resource management is crucial for th...

human resource management system

What Is a Human Resource Management System (HRMS)?

A human resource management system can help your business get ahead in the game....

Get started today

Schedule faster, communicate better, get things done.

Why Is Human Resource Planning Important?

William goddard.

  • April 5, 2022
  • Human Resources

Why is HR Planning Important

Human resource planning enables businesses to meet their current and future demands for talent, allowing human resource managers to anticipate and develop the skills most valuable to an organization, and providing the enterprise with the optimal balance of staff in terms of available skill sets and numbers of personnel. 

Table of Contents

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.

Did you know?  

HR statistics in the US suggest that an alarming number of companies lose $550 billion annually due to workers feeling dissatisfied or disengaged . 

Wise businesses, therefore, lay greater emphasis on building a healthy organizational structure that motivates the workforce. This includes promoting healthy communication between management and employees. 

In the words of Darrin Murriner , the author of Corporate Bravery , a field guide for eliminating fear-based decisions, and Co-founder of Cloverleaf.me, an HR technology platform, “Human resource planning and organizational strategy connect at the hip. You can’t deliver a business strategy without making sure you have the right human capital you need in the right places for the task at hand.”

With that, let’s dig into the details of Human Resource Planning.

What Is Human Resource Planning?

Human resource planning definition is simple. At its core, Human resource planning is a systematic and strategic process aimed at evaluating the current state of an organization’s human resources and predicting its future workforce requirements. 

HR planning, which is also known as workforce planning, helps organizations recruit, retain, and optimize the deployment of people they require to meet strategic business objectives and respond to changes in the market and the general environment.

Beyond a simple consideration as the workforce, the human resources of an organization represent the sum of knowledge, skills, aptitude, creative abilities, and talents available to the enterprise, in addition to the values, attitudes, and benefits that each individual contributes to the business.

A key part of human resource planning is projecting future workforce requirements and developing strategies for managing talent in such a way that it proactively prevents skill shortages or surpluses.

 The need for human resource planning is to maintain the balance of skills based on the needs and objectives of the enterprise. HR planning must, therefore, be a continuous process, with a structure and monitoring system that enables the organization to provide sufficient lead time for the recruitment and training of employees.

Human Resources Planning Methodologies

HR Planning Methodology: St eps in H uman R esource P lanning

While forecasting workforce demand is at the heart of human resource planning, HR professionals require a comprehensive and in-depth view of their organization and an understanding of multiple factors to put together a plan. 

Smartsheet.com identifies seven key steps in the planning process, which may be applied in terms of their relevance to the circumstances of a specific enterprise:

  • Analyze the objectives of your organization: the human resource planning is done based on the organization’s goals and objectives, so, it’s important to develop a deep understanding of that.
  • Make an inventory of current human resources: Get to know your current workforce; their skills, competencies and experiences. Also, try to identify their strengths and weaknesses. 
  • Forecast your HR demand: Sketch out potential workforce requirements based on your organization’s objectives and plan.
  • Determine the number and extent of skills gaps: Compare the projected requirements and determine the extent of skill gaps.
  • Draw up an action plan: Solve the gaps through recruitment, training and development.
  • Integrate and implement the plan: Collaborate with the required departments to execute your action plan.
  • Monitor, measure, and provide feedback: Monitor the outcomes and keep track of the progress. Based on the results, provide feedback and improvise.

HR planning - 7 steps

(Image source: Smartsheet.com )

If you wish to understand these steps in detail, read our previous blog:  ‘ What Is Human Resource Planning? ’.

The Implications and Benefits of Human Resource Planning

In a globalized economy fueled by technological innovation, constantly evolving work patterns, demographic or cultural shifts, and changes in customer behavior, the life cycles of business designs and products are shortening – and organizations must be able to adapt swiftly. 

In this regard, human capital is more flexible than physical infrastructure or finance. Therefore, businesses must take into account human resource planning as a vital element required to survive and thrive.

Organizations around the world are recognizing the importance of this. For example, 2020 HR statistics reveal that 89% of medium-to-large companies have started using comprehensive annual surveys for engagement assessment. 

These studies are assisting them in understanding their workforce better and learning how to keep employees motivated and productive.

Businesses are also appreciating the importance of making a good first impression on their prospective employees and providing an incentive for them to fit into the organization and work enthusiastically for its success. 

Human resources statistics from 2019 indicate that 87% of applicants make a positive evaluation of the company and position they’re applying to, after a positive interview and onboarding experience. 

The reverse also holds, with 83% of applicants who reported a negative interview experience changing their initially positive opinion about the company and the position they’re applying to.

Moving forward, human resource planners will not only have to face the adoption of new digital processes and technologies — they will also have to accommodate new methods of doing business, and new realities such as the ongoing COVID-19 pandemic, with its movement restrictions and emphasis on remote working and collaboration. 

They will likely have to develop new methodologies for nurturing and retaining existing skills and cast a broader net in discovering new talent.

Matthew Burr , Moderator of the Upstate HR Podcast and Principal at human resource consulting firm Burr Consulting, LLC, sums it up like this:

 “The war for talent around the world continues to grow. To win the human capital competition, companies should use a strategic human resource plan as a roadmap to achieve three- to five-year goals. Strategic plans influence the development of tactical resource planning. 

For example, a human resources strategic plan may include long-term aims to recruit and retain excellent staff with a high level of technical expertise. The tactical plan would include detailed action plans with completion due dates.

For the strategic recruitment goals, the tactical program might consist of short-term goals, such as benchmarking salaries via survey data, or creating a social media campaign to identify and recruit technical professionals. The plan may also target filling IT positions through international recruiting.”

HR Planning Info

Importance of Human Resource Planning: What it Brings to the Organization

When executed effectively, HR planning enables businesses to optimize their usage of human resources, increasing productivity while reducing labour turnover, employee unrest, and absenteeism. 

It’s important to the enterprise in several respects.

The five business management functions including planning, organizing, leading, directing, and controlling rely on the oversight and action of human resource planners 

At the organizational level, good HR planning enables the enterprise to optimize its deployment and utilization of available talent and project the need for additional or alternative skills well in advance

Besides optimizing its usage of skills, the planning function also provides the organization with a clearer path to the future, both in terms of anticipating skills requirements and creating an order of succession for the promotion and shifting of talent within the corporate hierarchy.

Strategic workforce planning enables managers to more easily adapt to changes when employees retire or leave the organization, and when it comes time to promote or transfer personnel.

In times of economic uncertainty, human resource planning becomes a value add for the organization, with its power to foresee and avoid short-sighted staffing decisions. 

For example, unnecessary downsizing may result in costs to the enterprise and possibly, backlash from worker’s unions. Also,  replacing these employees will cost time, effort, expense, and training.

On the employee front, a comprehensive,well-executed HR plan can provide improved communications with management and a greater connection with the vision and objectives of the enterprise.

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.

Challenges Faced in Human Resource Planning 

Predicting workforce requirements is not the only challenge human resource professionals are left to face. Below are some common challenges HR professionals need to overcome on a regular basis.

Human resource challenges

(Image source: Human Resource Executive)

Change Management: change management is an integral requirement for any human resource planning scheme. Resistance to the process may come from workers who feel that their workload will increase as a result of the implementation, or from those who feel uncomfortable with changes to their working patterns and established routines. 

External Factors: fluctuations in market conditions, employee turnover, seasonal employment, absenteeism, and the effects of new technology, may also play a part in complicating matters for Human Resource Planning process

Technical Advancement and Issues: Although 2020 HR statistics suggest that 70% of companies use data analytics to process their employment data, IT and HR managers need to ensure that those human resource information systems are reliable, comprehensive, and up to date. This requires them to keep a close eye on data integrity, management, and in the era of intense privacy legislation, security protection.

Legal Issues: Legal and regulatory compliance requirements can form an obstacle to effective HR planning in themselves. In the US, for example, the processes and documents that employers use for recruiting, interviewing, and staffing may have different requirements or injunctions from state to state. 

Many states passed new harassment prevention laws in response to the “Me Too” and “Time’s Up” movements, organizations must take account of their own status with regard to their obligations for mandatory training, revised policy language, and other compliance demands.

Human Resources: Gender Pay Gap

(Image source: Eurostat )

Demographic Consideration: The gender pay gap continues to be an issue. Again, legislation comes into the picture with, for example, the passage of the Massachusetts Equal Pay Act (MEPA) in 2018, and moves by several states to ban companies from asking pre-employment questions about a candidate’s salary history. 

Proactive measures taken by individual institutions such as the recent decision by the University of Eindhoven to make vacancies for academic staff exclusively open to women may also have to be taken into account.

Finally, organizations must go into the endeavour with an awareness of the time and commitment involved in completing and continuously repeating the seven steps of the planning process. It can be an expensive undertaking, leading some companies to avoid it altogether.

Human Resource Planning in Action

Ideally, HR professionals should be system and integration project managers who understand deadlines and highly complex projects. 

Many academic institutions offer a degree path in Human Resources Management, and certification programs are available to qualified individuals coming from various fields. 

Within the organization, employees will often work within an HR role for three to five years, before attaining management level.

Human Resource Planning in Action

(Image source: Atrivity.com )

Besides nurturing in-house talent, HR experts suggest a number of strategies for effective planning.

Organizational policies such as employment classification, benefits, compensation, performance, and improvement can assist human resource planners with the selection, training, and support of workforce members, and provide employees with guidelines for conduct and orientation in and outside the work environment.

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.

In terms of implementation of Human Resource Planning, the most effective organizations use proactive human resource plans, which anticipate business needs and develop strategies that achieve short-term and long-term objectives. 

Such plans will employ progressive practices such as allocating a portion of the staffing budget and resources to recruitment and the hiring of key talent for future-looking projects.

Human Resources Planning - Human Capital

Outsourcing Options for Human Resource Planning and Management

We’ve mentioned the time, effort, and expense involved in human resource planning, and these commitments may discourage smaller-scale enterprises from getting involved in the process at all. 

An excellent solution to this is outsourcing HR activities for your workplace. Professional employer organizations (PEOs) can provide a viable and cost-effective alternative to in-house efforts.

PEOs operate under a “co-employment” model where the business retains effective control of its workforce, deciding whom to hire and fire, and managing their day-to-day activities. But for tax and compliance purposes, the employees appear as legal entity on the PEO’s books. 

The PEO also takes responsibility for all the legal, compliance, and HR-related policy tasks that the client business defines.

NAPEO, a national organization representing PEO interests, reckons that there are roughly 900 PEOs operating in the US. Most operate on short-term contracts, usually requiring a 30-day written notice if you need to cancel their services.

With the help of PEOs, small businesses can benefit from the perks of HR planning without the hassle of spending time and cost.

Final Thoughts

Human Resource Planning plays a pivotal role in creating a smooth and efficient process for employee management and future workforce development.

Human resource planning gives business leaders more freedom to focus on meeting revenue-driving goals being fully assured that the organization’s workforce is being fully utilized towards their goals.  

Any small business can make use of HR planning by effectively leveraging technology and outsourcing. Human Resources Planning enables businesses to proactively compete in the market and drive growth that is sustainable in the long run.

Why IS Human Resource Planning Important?

  • HR statistics in the US suggest that companies lose $550 billion annually due to workers feeling dissatisfied or disengaged. Businesses are therefore wise to lay greater emphasis on building a healthy organizational structure that motivates the workforce, and on promoting healthy communications between management and employees.
  • Effective management and planning for human resources can assist in this. Human resource planning enables businesses to meet their current and future demands for talent, allowing human resource managers to anticipate and develop the skills most valuable to an organization, and providing the enterprise with the optimal balance of staff in terms of available skill sets and numbers of personnel.
  • Proper planning also provides a path for future development by establishing a reservoir of talent capable of filling leadership roles. And in the long term, human resource planning helps align human capital management more closely with business strategy.
  • Step One: Analyze the objectives of your organization 
  • Step Two: Make an inventory of current human resources 
  • Step Three: Forecast your HR demand 
  • Step Four: Determine the number and extent of skills gaps 
  • Step Five: Draw up an action plan 
  • Step Six: Integrate and implement the plan 
  • Step Seven: Monitor, measure, and offer feedback.

A: Human resource planning is forecasting an organization’s future workforce needs and ensuring it has the right people with the right skills and positions at the right time. It is essential because it helps organizations align their human capital with their strategic goals, anticipate future talent requirements, and effectively manage their workforce.

A: Implementing human resource planning offers several benefits such as identifying skills gaps and developing strategies to bridge them. It enables effective succession planning by identifying and nurturing future leaders. It also optimizes workforce utilization, reduces recruitment costs, and minimizes disruptions caused by shortages or surpluses.  Overall, human resource planning enhances employee engagement, productivity, and retention by aligning individual aspirations with organizational goals.

A: Human resource planning contributes to business success and growth by ensuring organizations have the right talent to meet their strategic objectives. It enables organizations to proactively identify and address future talent needs, allowing for better resource allocation and workforce development.  Aligning HR strategies with business goals helps organizations build a capable and agile workforce, foster innovation, and adapt to changing market conditions, driving business success and growth.

A: Some common challenges faced when implementing human resource planning include uncertainty in future business conditions, difficulty in accurately predicting talent requirements, resistance to change from employees or management, limited budget or resources for training and development, and lack of comprehensive data for workforce analysis.  Additionally, organizations may need help integrating human resource planning with other business processes and effectively communicating the importance and benefits of HR planning to stakeholders.

A: Developing an effective human resource planning strategy involves several key steps including: 1. Analyzing the organization’s strategic goals and future workforce needs 2. Conducting a thorough assessment of the current workforce and identifying skill gaps 3. Forecasting future talent requirements 4. Developing strategies to address skill shortages or surpluses 5. Implementing recruitment and selection processes 6. Designing training and development programs 7. Establishing succession plans 8. Continuously monitoring and evaluating the effectiveness of the HR planning strategy

  • Change Management , human capital , human resource planning , Human resources , workforce

William Goddard

IT Chronicles

  • Advertise with Us
  • Write for Us
  • Our Contributors
  • Privacy Policy

Top Categories

Human Resource Planning (HRP): Definition, Importance & Process

Human resource planning.

Human Resource Planning is a systematic process of forecasting both the prospective demand for and supply of manpower, and employment of skills with the objectives of the organization. It can also be termed as the method of reviewing the manpower necessities to ensure that right kind of skills is made available to the organization.

The main purpose of HRP is to set the goals and objectives of the company. In other words, it is to have the precise number of employees, with their skills matching the requirements of the organization, so that the organization can move towards its goals. Chief objectives of Human Resource Planning are as follows:

  • Guarantee ample supply of resources, whenever there is a need for it.
  • Make sure that the current manpower in the company is being used properly.
  • To foresee the potential requirements of manpower at various skill levels.
  • Evaluate excess or scarcity of resources that are available at a given point of time.
  • Predict the impact of technological changes on the resources as well as on the kind of jobs they do.
  • Manage the resources that are already employed in the organization.
  • Ensure that there is a lead time available to pick and train any supplementary human resource.

Need for Human Resource Planning

The need of HRP may arise because of the following reasons:

  • In India, unemployment is a grave concern. Scarcity of manpower and that too with the required skill sets and competence, has given rise for need of Human Resource Planning.
  • It comes handy for smooth and continuous supply of workers when a huge number of employees is retiring, or leaving the company or maybe they are incapable of working due to psychological or physical ailments.
  • There is a need for Human Resource Planning when there is an increase in employee turnover, which is obvious. Some examples of this turnover are promotions, marriages, end of contract, etc.
  • Technological changes lead to a chain of changes in the organization, right from skill sets product methods and administration techniques. These changes lead to an overall change in the number of employees required and with entirely different skill set. It is here that the Human Resource Planning helps the organization deal with the necessary changes.
  • Human Resource Planning is required to meet the requirements of diversification and growth of a company.
  • There is a need for Human Resource Planning in downsizing the resources when there is a shortage of manpower. Similarly, in case of excess resources, it helps in redeploying them in other projects of the company.

Importance of Human Resource Planning

After the need for HRP, it is apt to discuss the importance of it. A few are mentioned below.

  • It gives the company the right kind of workforce at the right time frame and in right figures.
  • In striking a balance between demand-for and supply-of resources, HRP helps in the optimum usage of resources and also in reducing the labor cost.
  • Cautiously forecasting the future helps to supervise manpower in a better way, thus pitfalls can be avoided.
  • It helps the organization to develop a succession plan for all its employees. In this way, it creates a way for internal promotions.
  • It compels the organization to evaluate the weaknesses and strengths of personnel thereby making the management to take remedial measures.
  • The organization as a whole is benefited when it comes to increase in productivity, profit, skills, etc., thus giving an edge over its competitors.

Human Resource Planning Process

In any Human Resource Planning model there are three key elements which the management should adhere to:

  • Forecasting recruitment needs : There are a number of ways in forecasting your business needs, to know the exact number of employees required to run the business. Factors to be considered are the economical situation of any given country, internal and external factors of an organization and the demand for the products.
  • Evaluate Supply : In estimating this, there are two aspects, one is the evaluation of the internal resources and the other is the prospective or external resources. Among the two, external factors require extra care, these include education, unemployment rate and law that is in existence. Evaluating these factors very closely will help the organization in filling the right resources at the right time with the right skill set.
  • Supply and demand balance : This element of Human Resource Planning is very important, as striking a balance between these two forces will help the organization in understanding if there is shortage or excess of employees available in a particular group. It also helps in understanding as to the need of full time or part time needs of the organization.

Related Posts

Management And Management Process

Management And Management Process

5 Examples of Self-actualization Needs (Maslow’s Hierarchy)

5 Examples of Self-actualization Needs (Maslow’s Hierarchy)

Bass Transformational Leadership Theory

Bass Transformational Leadership Theory

Organizational Design and Structure; Definition, Elements, Types, Pros, Cons

Organizational Design and Structure; Definition, Elements, Types, Pros, Cons

Business Communication: Definition, Types, Examples, Importance, Methods, Functions

Business Communication: Definition, Types, Examples, Importance, Methods, Functions

Paternalistic Leadership Style: Types, Examples

Paternalistic Leadership Style: Types, Examples

Critical Importance of Human Resource Planning

  • Small Business
  • Human Resources
  • Human Resource Plans
  • ')" data-event="social share" data-info="Pinterest" aria-label="Share on Pinterest">
  • ')" data-event="social share" data-info="Reddit" aria-label="Share on Reddit">
  • ')" data-event="social share" data-info="Flipboard" aria-label="Share on Flipboard">

Is Shadowing in an Organization Effective?

Communication & diversity in the workplace, hr & business planning.

  • The Relationship Between Supervisory Planning & Employee Morale
  • What Is the Difference Between Human Resource Management & Human Resource Planning?

Human resource planning is often overlooked, especially in the early stages of a business when the focus is solely on profitability and proving the business model. There comes a time however, when planning is an absolute necessity. Not only does it shield the business from hefty legal consequences, planning creates a smooth process for employee management that is both efficient and effective. The HR team often coordinates with payroll to manage paperwork and ensure everyone is properly enlisted in the company and company programs while being paid in a timely manner.

The human resources department has an important function within most businesses. Any business that relies on multiple employees to function stands to benefit from human resource planning. Not only does the HR department become a tool of legal compliance, they also work strategically with the business to manage growth, employee issues, training and a number of organizational tasks that simply require an HR specialty approach.

Why is human resource planning important?

There are several elements to human resource planning and all are equally important. The first is the actual planning of the workforce. Even in a small business, specialized skill sets are not always easy to source and planning for a growing workforce is critical. Planning for a reduction in the workforce is also intensive and requires strategic thinking to work through temporary or permanent layoffs. Legal planning and process building are used to shield the company from legal ramifications for discrimination of workplace misconduct. The human resources department is responsible for educating and training employees on company policy, they handle legal aspects of the employee relationship like workers compensation and they communicate with every department in the business. Human resources also works as a bridge between employees and payroll by ensuring contracts are executed and honored. Effective planning in the human resources department leaves the managers in position to focus on meeting goals that are responsible for driving revenue rather than spending time dealing with administrative issues and employee paperwork.

With all of the planning required, you might wonder who is actually responsible and what goes into human resource planning. The number of people in the human resource department ultimately depends on the company size. A small company of 5-10 people might have a single HR administrator while a large company of one-thousand employees will have twenty or more. It all depends on the company and their needs. A business with large seasonal hiring needs may have more HR folks on staff to handle the intensive training and paperwork required for on-boarding with regularity. A company with a very stable staff and little turnover will require a smaller HR department. Human Resources management is offered as a degree path at many institutions and it sets the stage for a career dedicated to HR. Numerous certification programs are also available to qualify individuals coming from other fields. It's not uncommon for employees with administrative and management experience to make the transition into human resources. They can do this through certification training programs. The certification courses open the door to employees with undergraduate degrees in related fields but not a dedicate human resources degree. The experience from a business management degree for example will combine well with an HR certificate. To reach the human resources manager level, employees will often work within and HR role for three to five years.

Planning for Growth

The company stands to gain returns by scaling a workforce quickly. If a plan is in place, the company can bid on bigger contracts and effectively grow without being understaffed. The planning aspect applies to the additions of permanent employees, temporary employees and contract workers. A temporary growth opportunity often calls for seasonal or contract labor to avoid a cycle of hiring and firing. Planning to meet these expectations falls on human resources.

When a company needs to grow quickly or add a large seasonal workforce, human resources must plan for the hiring and manage recruiting. Recruiting fairs, advertising and other recruiting events are largely responsible for locating the workforce and placing them in jobs while still following company policies and procedures. A large retailer may hire thousands of employees for the holiday season on temporary work arrangements. Despite being temporary, human resources is still responsible for educating each employee on company policies, workplace safety guidelines and their role within the company. This is often done in the form of a contract where the employee signs off after receiving the training and agrees to follow the company policies. This holds the employee responsible for their actions at work and protects the company from legal actions if they fail to comply. It's especially important when large numbers of new people are entering the workplace simultaneously. Not only does the human resource planning and training help the new employees understand their roles and the rules, it reduces chaos and guides everyone into position so they can begin working and executing their daily tasks.

Growth planning is also a requirement to receive contracts in many cases. Government contracts are one common example where the company must prove they can access the workforce necessary to complete a contract. Any large scale, contract based business deal is a candidate for human resources planning of this nature. Failing to demonstrate an ability to access and hire a qualified workforce may remove the company from the running for a contract.

Scaling Down

When you think about what is involved in human resource planning, scaling down and laying off employees does not always come to mind. It is however a critical aspect of planning. A business can lose a key client or account that results in a larger workforce than necessary. This can capsize a business financially and scaling down becomes an unfortunate necessity. Laying off employees can happen in a temporary or permanent fashion. Layoffs come with some legal consequences if handled improperly and the human resources department must ensure each layoff is justified and handled properly. They must work through the employee pool and determine who must leave based on input from management. Determining layoffs is based on seniority, immediate need and financial resource planning. Some employees will require severance packages and unemployment benefit eligibility notification and guidance. Contracts for a severance are built by the legal team and the human resource department. A HR manager is often present during the individual or group layoff announcement to ensure everything is handled properly.

Planning throughout a layoff process is not only prudent for the company, it ensures the employees have the maximum notice possible, access to unemployment benefits and a genuine ability to move forward with their lives while seeking new work. They should also understand why the layoffs happened so their is no lame on their shoulders. Sometimes, business just goes in the wrong direction. Communicating this difficult message effectively requires an excellent human resources team that really understands the process.

Productivity and Employee Wellness

Productivity in the workplace is measured by managers and department heads but human resource planning can influence productivity through employee wellness programs and initiatives that create a healthy and happy workplace where individuals have the energy and positive attitudes required to succeed.

Every workplace is different but human resources departments plan to ensure employees have the minimum number of breaks required by law. Additionally, they can introduce incentive programs, health programs, gym membership discounts and general wellness programs to create a healthy and productive workplace. Even the layout of furniture, introduction of plants to an office and change in the lighting can have a major impact on employee wellness. Measuring productivity before and after the implementation of each program can demonstrate increases in output. Building a healthy workplace also cuts down on sick days and improves the long term capabilities of each employee. The human resource planning behind wellness and productivity programs can increase the bottom line in the long run while improving morale in the workplace.

HR acts as a communication tool with employees as well. They can survey employees while ensuring that no repercussions will be executed for undesirable answers. The ability to collect honest employee feedback functions as a key identifier for weak points in the business. The human resources department can essentially uncover hidden issues that employees are not comfortable resolving otherwise. The survey process can have a major positive impact on driving a more successful business.

In addition to basic wellness and creating a positive work-space, human resources is responsible for addressing mental health. They are a neutral resource and field reports of harassment and workplace misconduct. This outlet is important for developing a safe place of work for everyone. If a trend of harassment or misconduct develops, the department is responsible for planning a course of action to resolve the issue. If they have done the planning necessary to build an employee handbook with policies that each employee has learned and signed in a contract, taking action is easy to justify from a legal and logical point of view. In order to manage conflict and practice conflict resolution however, advanced planning must take place to define clear boundaries and draw an actionable road map to effectively handle those situations.

Legal Planning

The overarching purpose of human resources is to create a system of checks and balances in the workplace. The HR department is supposed to represent the interests of every employee equally. That means the CEO is beholden to the same set of standards as the interns from a human resources perspective. In order to hold everyone accountable for their behavior, the department must train everyone and make clear guidelines. This sets a legal precedent within the company with the intentions of making it a safe and comfortable place to work. The major aspect of legal planning involves the employee handbook and company policy. While these documents often seem like something to rush through during the hiring process, they are very important and set can act as a legal contract between the company and the employee. They protect the company from legal ramifications when the company follows protocol and reprimands violators and they also protect the employee from harassment and mistreatment at work.

Risk Management

In the larger sense of things, human resource management serves to manage and mitigate risk. The planning processes create a safe working environment that meets regulatory standards while building a healthy environment. This allows employees the opportunity to flourish in an equal opportunity workplace. It also limits legal liability for the company which does far more than protect just the company. A large suit has the potential to shut a company down and remove the jobs for everyone including those who are not involved. The risk management through HR ensures the company can withstand accusations because it followed a strict human resources procedure and it protects the workers as much as the company itself.

  • Lucid Chart: 4 Steps to Strategic Human Resource Planning
  • Smartsheet: Human Resource Planning Guide
  • Tech Funnel: Human resource planning tools and techniques

Zach Lazzari is a freelance writer with extensive experience in startups and digital advertising. He has a diverse background with a strong presence in the digital marketing world. Zach has developed and sold multiple successful web properties and manages marketing for multiple clients in the outdoor industry. He has published business content in Angling Trade Magazine and writes white papers and case studies for multiple corporate partners.

Related Articles

Why is orientation important to the employees, six main functions of a human resource department, the roles of unions or hr in the workplace, does the hr department handle the workers' comp claims within a company, how to deal with ambiguity in the workplace, labor union vs. human resource management functions, what are the functions of human resource managers, the effect of human resources planning on organizational productivity, what do hr generalists do, most popular.

  • 1 Why Is Orientation Important to the Employees?
  • 2 Six Main Functions of a Human Resource Department
  • 3 The Roles of Unions or HR in the Workplace
  • 4 Does the HR Department Handle the Workers' Comp Claims Within a Company?

Importance of Human Resource Planning

importance of human resource planning in business

Everything you need to know about the importance of human resource planning. Human resource planning is very important as it helps in determining the future human resource needs of the organization.

The effectiveness of human resource planning process decides the adequacy of available manpower in the organization. An unsuccessful human resource planning leads to either shortage or surplus of workforce in the organization and brings serious disaster.

The importance of human resource planning can be studied under the following heads:- 1. Key to Managerial Functions 2. Efficient Utilization 3. Motivation 4. Better Industrial Relations 5. Higher Productivity.

Importance of Human Resource Planning or Manpower Planning

Importance of human resource planning – key to managerial functions, efficient utilization, motivation, better industrial relations and higher productivity.

We are acquainted with the objectives, approaches, forecasting, and techniques of HR planning. Obviously the importance of HR planning is manifold. It serves as a key to managerial functions, efficient utiliza­tion of men, identifying and motivating them, promoting industrial relations, and boosting productivity.

ADVERTISEMENTS:

i. Key to Managerial Functions :

Planning, organizing, leading, directing, and controlling (POLDC) are the five managerial functions that need HR for their execution. Human resources help in the accomplishment of all these managerial activities effectively and efficiently. Therefore, staffing becomes a key to all managerial functions.

ii. Efficient Utilization :

With the emergence of the concept of the global village, handling HR efficiently has become an impor­tant function in the industry. Large organizations need huge HR to execute their job effectively. As such, the staffing function has emerged as a critical organization process.

iii. Motivation :

Irrespective of their levels, organizational citizens need motivation. The staffing function, in addition to putting the right men on the right job, also comprises various motivational programmes. It is essential to launch financial and non-financial motivational schemes, including incentive plans. Therefore, all types of incentive plans become an integral part of staffing function to satisfy both intrinsic and extrinsic motivation.

iv. Better Industrial Relations :

Stability, smooth running, and growth of a concern depend on the quality of interpersonal relations; especially on the relation between the management and unions. Members from the unions and asso­ciations form a collective bargaining forum. A strong relation between them helps taking decisions collectively. Furthermore, human relations can become even stronger through effective control, clear communication, and effective supervision and leadership.

v. Higher Productivity :

Productivity levels increase with the efficient utilization of resources in the best possible manner. Productivity is enhanced by minimizing wastage of time, money, efforts, and energies. Alternatively, cost reduction, value engineering, method study and work measurement, and other techniques help to enhance productivity. Human resource and its related activities/systems such as performance appraisal, / training and development, remuneration, further settle on productivity.

Importance of Human Resource Planning – 10 Benefits to the Organization

Human Resource Planning is an important and highly specialized activity.

If this activity is taken up professionally by the human resource team it can offer numerous benefits to the organization which are as follows:

1. It is wise for the managers to anticipate the workforce requirements with precision rather than getting burdened with unrequited workforce.

2. Planning prevents the business from falling into the trap of ill-equipped departments with workforce which is a common concern among all industries.

3. It Works proactively as the expansion in the workforce market is not always in conjunction with the workforce requirement of the organization in terms of professional experience, talent needs, skills, etc.

4. Organizations in growth phase may face the challenge of meeting the need for critical set of skills, competencies and talent to meet their strategic objectives so they can stand well-prepared to meet the HR needs if they have planned well.

5. Considering the organizational goals, HR Planning allows the identification, selection and development of required talent or competency within the organization.

6. Planning Provides organization with competent Personnel.

7. It Enables organization to optimally use manpower.

8. Human resource planning enables a company to plan its expansion and diversification.

9. Human Resource Planning contributes towards management succession and development.

10. It helps in planning physical facilities.

It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the organization with a comprehensive HR assessment and planning to meet its future requirements in the most cost-effective and timely manner.

1. Human resource planning is a continuous process – Human Resource Planning is a continuous process by which management ensures that it has the right personnel, who are capable of completing those tasks that help the organization, reach its objectives.

2. Human resource planning links people to company’s mission, vision, goals and objectives – Rigorous Human Resource Planning links people management to the organization’s mission, vision, goals and objectives, as well as its strategic plan and budgetary resources.

3. Human resource planning is forward looking process – Human resource planning is a forward-looking function. It occupies a pivotal place in successful human resource management programme. It ensures that people are available to extend their willing hands towards the development endeavours of an organization.

4. Human Resource Planning is Value Addition in Competition and Economic Downturn – In the times of great economic turbulence, the importance of human resource planning is more apparent than ever. A short-sighted lay-off, intended to temporarily reduce overhead, can result in much heavier long-term costs. We may regret letting people go when we are spending time and money to hire and train new staff. Plus, we lose profits when we lose experienced, knowledgeable and talented employees.

Increasing environmental instability, demographic shifts, changes in technology, and heightened international competition are changing the need for and the nature of human resource planning in several organizations in India and across the world.

In addition, organizations are realising that in order to adequately address human resource concerns, they must develop long-term as well as short term solutions. As human resource planners involve themselves in more programmes to serve the needs of the business, and even influence the direction of the business, they face new increased responsibilities and challenges.

Importance of Human Resource Planning – With Reasons Why Human Resource Planning is Essential

Human resource planning is very important as it helps in determining the future human resource needs of the organization. The effectiveness of human resource planning process decides the adequacy of available manpower in the organization. An unsuccessful human resource planning leads to either shortage or surplus of workforce in the organization and brings serious disaster.

The importance of human resource planning are as follows:

a. Human resource planning helps in finding out surplus and shortage of manpower in the organization. Hence it creates reservoir of talents;

b. It leads to systematic employee development and prepares people for future;

c. It is useful in finding out the deficiencies in existing manpower and providing corrective training;

d. It is helpful in overall planning process of the organization;

e. It facilitates the expansion or contraction of scale of operations;

f. It helps in preparing appropriate human resource budget for each department or division, which helps in controlling manpower costs; and

g. It plays a major role in succession planning for the key personnel in the organization.

When man is considered as a resource, it is understood, he has some potential characteristics, which can be used to organizational needs in the path of fulfilling the organizational, social and national goals. Manpower or Human resource can be considered as the total knowledge, skills, creative abilities, talents and aptitudes of an organization’s work force, as well as the values, attitudes and benefits of an individual involved.

Among the resources used for production i.e. materials, machines, methods, money and manpower, the most important M is manpower resource. When considered as a resource, it is valuable asset of the organization. Hence, planning for manpower is as important as planning for other resources.

Manpower planning or Human Resource Planning is synonymous. It is forecasting future manpower requirement to cater the needs of the organization. It involves of making an inventory of present manpower resources and assess the extent to which these resources are employed optimally. It consists of projecting future manpower requirements and developing manpower plans for the implementation of the projections.

If Human resource planning is used properly, it helps in maximum utilization of human resources, reduces excess labor turnover and high absenteeism; improves productivity and excels the organization in achieving the purpose for which it is established. A bad manpower plan may induce dissatisfaction in labor and lead to higher labor turnover, reduces productivity.

Human resource planning is essential because of the following reasons:

i. It provides the required personnel with necessary qualification, skills, knowledge, work experience and aptitude.

ii. To replace the employees who retire, who leave the organization for some reason or the other and to promote/transfer people, proper manpower planning will help the manager.

iii. It helps in estimating the labor turnover and making a forecast and provides adequate supply of labour force in time.

iv. Manpower planning helps the manager to estimate the human resource required for business expansion programs.

v. Human resource planning helps in planning for training needs due to challenging changes in industrial environment, technology etc.

vi. It helps in identifying areas of surplus or shortage of personnel and making the necessary modifications.

Importance of Human Resource Planning – 7 Ways in Which Human Resource Planning is an Important Tool of Human Resource Management

Human resource planning is a two-phased process by which management can project future human resource requirements and develop human resource plans. It helps in proper recruitment and selection so that right types of people are available to occupy various positions in the organisation.

It also facilitates designing of training programs for the employees to develop the required skills in them. Thus, human resource planning plays an important role in the effective management of personnel.

Systematic human resource planning provides lead time for the acquisition and training of employees to meet future requirements. It is all the more crucial because the lead time for procuring personnel is a time consuming process and in certain cases, one may not always get the requisite type of personnel needed for the jobs.

Non-availability of suitable human resource may result in postponement or delays in executing new projects and expansion programs, which ultimately lead to lower efficiency and productivity. To overcome this, an organisation must plan out its human resource requirements well in advance so that it could compete effectively with its competitors in the market.

Human resource planning is an important tool of Human Resource Management as it helps in the following ways:

1. Human resource planning results in reduced labour costs as it helps the management to anticipate shortages and/or surpluses of human resource and correct these imbalances before they become unmanageable and expensive.

2. It serves as a basis for planning employee development that is designed to make optimum use of workers’ skills within the organisation.

3. It enables identification of the gaps of the existing personnel so that corrective training could be imparted. Thus, the training program becomes more effective.

4. It leads to improvement in the overall business planning process.

5. It helps in formulating managerial succession plan as a part of the replacement planning process which is necessitated when job-change plans for managers are formulated. Besides, this exercise would provide enough lead time for identifying and developing managers to move up the corporate ladder.

6. It leads to a greater awareness of the importance of sound human resource management throughout the organisation.

7. It serves as a tool to evaluate the effect of alternative human resource actions and policies.

Importance of Human Resource Planning – In Indian Organisations

For industrial organizations in India, the issue of manpower planning has special significance. Advance planning and action for a resource is required when it cannot be acquired or divested quickly according to the requirement of the business and/or when it can be acquired but cannot be used in the organization without further development over a period of time. There are several reasons why human resource acquisition or reduction in our country cannot be done at will.

The foremost reason being the difficulty in estimating the actual requirements of manpower in the company based on company business projection. The question arises how to estimate the demand for manpower in a company? How much can one rely on such estimation? Though Indian economy has made considerable progress in developing database and statistical information about industrial activities, yet very few organizations are aware of this and even fewer organizations have expertise in using it.

One of the critical differences between a developed economy and a developing economy is that in a developed economy the documentation process of economic activities is also quite developed. And, most people have good access to this publicly available information on economy.

Moreover, the problem related to statistical information on economy in general and company specific manpower information in particular get compounded further by the widespread apprehension among industrial organizations for loss of company secret. Some of these concerns are possibly valid but much of it are overreactions.

Mostly these reactions are due to unawareness of public good that may come from sharing of information with public agencies. All the same, the apprehensions are very much there. A lot of work needs to be done to allay these fears before an industry specific database can be built for estimation of manpower demand or supply.

The second issue is the general response of the local population in terms of choice of career to market signal on economic opportunity and career. Poor communication infrastructure and low mobility of workforce are two characteristics which give our labour markets certain levels of rigidities. In the Indian economy, it is quite common to find a low wage sector operating side by side with a high wage sector for many years without much exchange of manpower or market-based correction of the wage rates.

Example – Illiterate workers working as regular peon in a government office at block level versus similarly skilled rural labour in agricultural household. The annual income of a regular government employee is more than double that of a rural unorganized labour.

The labour market adjustment process is too slow to make much difference in the wage rates of workers in organized and unorganized sectors. It is this kind of market inertia which may make it very risky for business organizations to rely on the external market for their required manpower.

The nature of academic training facility of the country does not make the load lighter either. Aca­demic institutes in general and technical institutes in particular have developed and grown along es­tablished lines. Very few institutes show interest to keep up with the changing demands of the industry and innovate into new areas or new ways of delivering educational programmes.

The lack of academic material and inadequate communication between academic institutes and industry makes all the more difficult to have academic programmes in emerging areas. Most academic programmes developed along traditional lines because these were the areas where documented knowledge were available.

With, this state of academic training facilities and the response patterns of the general population, the industry has no choice but to rely for most of its manpower requirements on in-house facility. Development of expertise is a slow process and development of skill through on the job experience is even slower. Most in-house learning processes follow a conservative route along established lines because of high cost of managerial time and apprehension of trainees’ mistakes.

Trainees or newly hired employees are rarely given the opportunity for experimentation or jobs that require reflection. The result is that most on job learning processes are slow and require careful advance planning for appropriate job placement and managerial guidance. Naturally, the supply of manpower from internal learning system is a long drawn process.

Apart from the slow learning process, progressive loss of interest in learning by the learners and/or because of poor facilities for learning are other factors which take heavy toll on the number of learners who survive a learning process. There is always a possibility that in a batch of say 10 learners all of them would not pass out with flying colours at the end of a long learning programme.

This attrition rate is higher when the duration of the programme is long and the content of the programme requires a lot of hard work and self-initiative. The attrition also depends on the quality of the facilities provided to the learners. A simple statistic from national educational programme at high school level will show how the natural attrition of the learners reduces the potential number of candidates at the end of a long-learning programme.

At the all India level, during 2006-2007 the dropout rate of students who passed out from fifth standard education was 25.4%. The corresponding rate of those who passed out eight standard was 46% and those who passed out the tenth standard was 60% (Ministry of Human Resource Devel­opment 2009).

This means that if we took a sample of 100 students who started their first standard education today, then at the end of their five years of education we would end up with just 75 students, at the end eighth standard we would get just 56 students, and at the end of tenth standard we would be left with just 40 students in the class.

The rest 60 students were dropped dead either because they lost interest or because the learning programme content was too tough for them to understand. At the national level quite a high dropout of school level learners could be attributed to poor learning facility both in school and/or at home. This is why dropout rates are so high in rural schools than those in urban centres.

Now imagine a batch of fresh graduate managers going through an organizational learning and developmental programme of say 10-year long. Do you think all of the freshly recruited managers would pass out with flying colours at the end of say 10 years of internal experience-based developmental programme? Most likely they will not.

Some will dropout because they are getting better offer in other organization. Some will fail because they do not fit with the internal human infrastructure of the company well. Some will lose interest to acquire expertise because the company does not have that many chairs at higher level.

The dropout rate for company managers is likely to be much more than the dropout rates of the school-going children. First, a freshly recruited manager may get lots of other opportunities knocking on his/her door every other day disturbing his/her concentration to acquire new skills and expertise. His/her family organization may place lot of additional demands on his/her time.

Second, because the number of positions in higher levels comes down as one moves up in the hierarchy, unless an organization grows very fast the organizational hierarchy may not be able to accommodate all the freshly recruited managers in higher levels. In other words, because the capacity for developmental opportunity in an organization comes down as one moves up in the hierarchy, there is likely to be purposeful rationing process for allocation of opportunities.

Most Indian business organizations operate in a single country. They compete with many other organizations in the same product as well as factor markets. Naturally, their growth could not be very high to accommodate all the learners with newer positions continuously. This means such organiza­tions may find that dropout rates of their freshly recruited managers are pretty high.

An Indian organization which is expecting to develop all its senior managers through in-house development process must plan its internal developmental programme well in advance and with sufficiently large pool of candidates.

Another related issue in manpower planning is the requirement of manpower reduction. With the Indian economy getting integrated with the world market, much of the advantage of inward-oriented economy that provided a lot of insulation to the Indian organizations from the ups and downs of the world market may go away. And, many organizations may have to live with frequent highs and lows of their businesses.

Manpower planning is a hard job, but for Indian business organizations perhaps it is harder to reduce manpower. Due to lack of employee mobility any business driven manpower reduction attempt is not taken kindly by either the employee union or the government.

This means before hiring an employee, a company has to assume and ensure that there will be enough job for that employee for the rest of his/her career. A company may not be able to close its plant even when its ecological niche has shrunk in size and does not support its continued sustenance or growth.

Inadequate manpower acquisition and development may jeopardize a company business expan­sion plan in future yet excessive zeal in manpower acquisition and development without considering the long-term business prospect may make it sink fast in hard times.

Importance of Human Resource Planning: 10 Important Points

1. Estimating future demand for human resources – HRP determines the future requirement of personnel on the pace of development, expansion and diversification of business. It also deals with surplus and deficit workforce of the organization.

2. Bridging the gap – HRP plays an important role in bridging the gap between the demand and supply of workforce in an organization.

3. Enhancing workforce – HRP advocates for training and development of workforce to cater to the future demand for workforce.

4. Coping with changes – HRP facilitates to cope with changes. As the changes are inevitable, HRP focuses on change in nature of workforce, technological change, organizational change, demographic changes, legality and ethicality in dealing with workforce.

5. Determining the cost of human resources – Out flow of money is involved in every process of HRM. HRP takes into account the money spent on every activity of HRM and facilitates cost control and cost reduction.

6. Cost of hiring and training – HRP minimizes the cost of hiring and procurement. It is simple to understand that money unspent is money saved.

7. Diversification and expansion of business – Diversification and expansion of business results in demand for workforces. HRP determines the qualitative and quantitative workforce requirement for an organization.

8. Management development programmes – HRP decides upon the need for management development programmes and facilitates to conduct the same more effectively and efficiently.

9. Optimal utilization of human resources – Effective Human Resource Planning will help ascertain the adequate workforce and facilitate to use them optimally. It also prevents disguised unemployment and overloading, leading to job stress.

10. Essential for strategic planning – Strategic plans are the long-term plans of the organization. In the absence of HRP, strategic planning will become ineffective.

Related Articles:

  • Definitions of Human Resource Planning
  • Need for Human Resource Planning
  • Barriers to Human Resource Planning
  • Importance of Human Resource Management

We use cookies

Privacy overview.

Human Resource Planning: Meaning, Objectives & Importance

Meaning of human resource planning.

Human Resource Planning is a process used by organizations for the management of human resources working in an organization. This is a technique that helps in maintaining the appropriate number of employees in a business organization. Human resource planning aims at removing the gap between the current human resource capacity of business and their prospected capacity. It aims at full utilization of employees working in the organization to achieve desired goals timely.

Human resource planning helps the organization in analyzing the optimum number of human resources and also recognizes the sources from which these human resources can be obtained. Shortage or excess of employees in any organization will adversely affect the productivity of any organization and human resource planning helps in avoiding this situation. It aims at matching the right person at the right job at the right time to achieve the maximum output.

Human resource planning is one of the important managerial functions required by every organization to remain profitable and productive. It mainly involves four important roles: Analyzing the current supply of employees, forecasting future demand of employees, removing the gap of current supply and future demand of employees by acquiring them in the right number, and focusing on business goals. Importance of Human Resource Planning in the Business organization can be well understood by the following points

Objectives of Human Resource Planning

Objectives of Human Resource Planning

Assess Future Manpower Needs

Human resource planning helps the organization in identifying future manpower requirements for organizations. In view of organizational objectives to be achieved in the future, this process analyses the precise manpower required for the functioning of the organization. This process ensures the right number of peoples at the right time in an organization to derive requisite output.

Identify Manpower Gap

Identification of the gap between the manpower supply and manpower demand is a must for every organization. Human resource planning helps in finding out the surplus or deficit of employees in an organization. Accordingly, it makes a plan to overcome these gaps. In case of the deficit its plans for hiring new employees and in case of the surplus it reduces the number of employees by retirement, termination, layoff, etc.

Determination Of Training And Development Needs

Human resources planning aims at providing various training to all employees as per the requirement of market needs. These training and development programmes are meant for both new and existing employees. It focuses on updating and improving skills of manpower to derive the requisite productivity from them. This way it aims at the advancement of employees and serves the high skilled employees need of an organization. 

Ensures Optimum Use Of Manpower

Human resource planning process helps in the full utilization of human resources. The right man at the right place is a must to achieve high productivity and efficiency. This process aims at providing job to individuals according to his knowledge, skills, and experience. Job positions are properly analyzed before deputing persons and it is checked whether a person is capable of delivering roles or not. This way Human resources planning ensures fuller utilization of human resources within the organization.

Meet Expansion And Diversification Needs

Expansion and diversification are activities that every organization needs to follow as they achieve progress over time. Human resource planning supports the organization in its various expansion, diversification, and modernization programs. It formulates plans for meeting the employee requirements as per the expansion plan. This ensures that skilled and knowledgeable people are available at the right time that is able to face the challenging job roles.

Estimates Human Resource Cost

Human resource planning controls the cost of human resources of an organization. It facilitates the preparation of the budget for meeting these expenses by estimating the cost of each and every human resource working in the organization. Formulation of appropriate budgets will ensure timely payment to employees and also avoids a shortage of funds.

Monitors Human Resource Performance

It monitors and controls the performance of employees from time to time. Human resource planning measures the actual performance of manpower with planned performance. If any deviations are found in performance it aims at removing them by taking appropriate corrective measures. It ensures whether human resources are performing as their defined roles and responsibilities. This way it helps in the achievement of organizational goals and objectives timely.

Importance of Human Resource Planning

Importance of Human Resource Planning

Acquiring Right Employee

Human resource planning aims at hiring the personnel according to the requirements of the job. It aims at matching the right person with the right job. Jobs are provided to individuals according to their qualifications and skills. It involves proper analyzing of employee’s qualities and skills before hiring them for a particular job role.

Improves Employee’s Efficiency

Improving the efficiency of its employees is a great challenge before every business. Human resource planning helps businesses in analyzing the output of people working with it and suggests ways of improving their efficiency. It ensures that manpower is efficiently utilized and keeps a check on whether all employees are properly delivering their roles.

Development of Personnel

Human resource planning involves imparting education and training to all employees working within the organization. As per the market requirements, it improves the skills of employees by organizing various training and development programs. It identifies the skills of various personnel and provides them training accordingly as per the requirement. 

Increase Employee Satisfaction

The satisfaction of employees is important for retaining the employees in the organization. Human resource planning helps businesses in working for the welfare of their employees. It aims at providing better working conditions, fair salaries and wages, and several other amenities. By focuses on the welfare of employees Human resources planning increase the satisfaction level and productivity of employees.

Analyse Future Manpower Needs

Human resource planning helps in meeting the future manpower requirements of the organization. It analyses the present manpower capacity and forecast the future requirement and then aims at meeting the gap between the two. Business through this process acquires and maintains the right number of personnel according to the requirement of time. 

Control Employee’s Turnover

Employee turnover has a great impact on the profitability of the business. Every business aims to control and minimize their overall cost incurred on its employees. Human resource planning focuses on maintaining the accurate number of personnel in every organization as per requirement. Any excess or shortage of employees is all fulfilled through proper analysis and planning. This way it controls all expenses required for hiring and maintaining new personnel.

Long Term Growth

Human resource planning has a great impact on the growth and survival of every organization. It improves the efficiency and profitability of a business by efficiently utilizing all human resources. This technique focuses on organization goals by keeping a check on the roles and duties of all persons working within the organization. It performs analysis from time to time within the organization and takes corrective measures in order to improve any deficiency. Therefore proper planning of human resources helps in increasing productivity and made the timely achievement of goals possible.

Related posts:

  • Advantages and Disadvantages of Human Resource Accounting
  • Training: Importance, Methods, Types, Meaning
  • Process of Human Resource Planning
  • Objectives of Human Resource Management
  • Importance of Human Resource Accounting
  • Importance and Functions of Human Resource Development

Add CommerceMates to your Homescreen!

importance of human resource planning in business

importance of human resource planning in business

An Error has Occurred

We apologize for any inconvenience. You can contact Paycom Customer Service at 1-800-580-4505. Your support ID is: 13379371496900608628

Talent Sourcing

What is the Importance of Human Resource Planning?

Published on June 9th, 2023

blog-banner

Human resource planning plays a crucial role in the success of any organization. It involves strategically aligning the workforce with the organization's goals and objectives, ensuring the right people with the right skills are in the right positions at the right time. In this blog post, we will explore the importance of human resource planning and how it contributes to organizational success.

1. Anticipating and Adapting to Change:

In today's rapidly evolving business environment, organizations face constant change. Human resource planning enables organizations to anticipate and adapt to these changes effectively. By forecasting future workforce needs and analyzing current skill sets, organizations can proactively address skill gaps, technological advancements, industry trends, and regulatory changes. This allows them to stay ahead of the curve and remain competitive in the market.

2. Strategic Workforce Alignment:

Human resource planning ensures that the organization's workforce is aligned with its strategic goals and objectives. It helps HR professionals understand the skills and competencies needed to drive success in various roles. By aligning the workforce with the organization's strategy, HR planning enables better resource allocation, improved decision-making, and enhanced overall performance.

3. Efficient Talent Acquisition:

An effective human resource planning process facilitates efficient talent acquisition. By identifying future workforce needs and skill requirements, organizations can streamline their recruitment efforts. They can attract and hire candidates with the right qualifications, experience, and cultural fit. This not only saves time and resources but also increases the likelihood of bringing in top talent that can contribute to organizational success.

4. Optimal Resource Utilization:

Human resource planning enables organizations to optimize resource utilization. By analyzing the existing workforce, HR professionals can identify areas of surplus or shortage in skills and talent. This helps in making informed decisions regarding workforce restructuring, reassignments, or training and development initiatives. As a result, organizations can make the most efficient use of their human capital, reducing costs and maximizing productivity.

5. Succession Planning and Leadership Development:

One critical aspect of human resource planning is succession planning . By identifying key positions within the organization and developing a talent pipeline, organizations can ensure a smooth transition when leadership or critical roles become vacant. Succession planning helps in developing future leaders and retaining institutional knowledge, fostering organizational continuity and stability.

6. Employee Engagement and Retention:

Human resource planning contributes to employee engagement and retention. When employees see a clear path for growth and development within the organization, they are more likely to be engaged and motivated. By identifying opportunities for training, career advancement, and skill enhancement, HR planning helps in creating a positive work environment that fosters employee loyalty and reduces turnover.

7. Cost Savings:

Effective human resource planning can result in cost savings for organizations. By anticipating future workforce needs and skill requirements, organizations can avoid last-minute hiring or external recruitment, which can be expensive and time-consuming. Additionally, by identifying areas of surplus in the workforce, organizations can reassign employees internally rather than recruiting externally, reducing recruitment and onboarding costs.

Why HireQuotient?

HireQuotient is an innovative HR-tech platform that revolutionizes the recruitment process by offering a comprehensive suite of tools designed to simplify human resource planning. These tools are specifically developed to assist organizations in finding and hiring the right talent. Let's take a closer look at the different features provided by HireQuotient:

  • EasySource: HireQuotient's EasySource is a cutting-edge talent sourcing platform that automates the candidate search process, enabling efficient human resource planning. By leveraging advanced technologies such as ChatGPT and Generative AI, recruiters can effortlessly connect with potential candidates who meet the desired criteria. EasySource streamlines the sourcing process, making it easier to identify and engage with qualified candidates.
  • EasyAssess: To streamline the screening process and aid in human resource planning, HireQuotient offers EasyAssess, a skills-based assessment platform . Recruiters can customize assessments tailored specifically for non-technical roles. EasyAssess allows recruiters to effectively evaluate candidates, providing comprehensive, data-driven reports with candidate results. These reports empower recruiters to make informed decisions during the selection process, enhancing human resource planning strategies.
  • EasyInterview: HireQuotient's EasyInterview is a convenient one-way video interview platform that saves valuable time and enhances human resource planning. Recruiters can eliminate the hassle of scheduling interviews by utilizing EasyInterview. Candidates are presented with pre-recorded interview questions and can record their responses at their convenience. Recruiters have the flexibility to review these video interviews at their own pace, ensuring efficient use of time during the interview process. HireQuotient's suite of tools offers a seamless and streamlined recruitment experience, contributing to effective human resource planning. By leveraging advanced technologies, recruiters can enhance their sourcing efforts, accurately assess candidates' skills, and simplify the interview process. With HireQuotient, organizations can optimize their human resource planning strategies, save time, and make more informed hiring decisions.

Conclusion:

Human resource planning is a vital process that enables organizations to align their workforce with their strategic objectives, anticipate and adapt to change, optimize resource utilization, and foster employee engagement and retention. By investing in a comprehensive human resource planning process, organizations can gain a competitive edge, enhance their overall performance, and achieve long-term success.

author

Radhika Sarraf

Radhika Sarraf is a content specialist and a woman of many passions who currently works at HireQuotient, a leading recruitment SaaS company. She is a versatile writer with experience in creating compelling articles, blogs, social media posts, and marketing collaterals.

Scroll Image

Hire the best without stress

hq-logo

Spending too much time hiring the right candidates?

Try our best-in-class recruitment automation tool. Source, screen, engage and hire top talent effortlessly.

Stay On Top Of Everything In HR

Human Resource Planning: Definition, Importance, Objectives, Process & Prerequisites

importance of human resource planning in business

In this article we will discuss about human resource planning. Learn about:-

1. Introduction to Human Resource Planning 2. Meaning of Human Resource Planning 3. Definition 4. Need and Importance

5. Objectives 6. Organisation 7. Factors Affecting 8. Human Resource Planning at Different Levels 9. Quantitative and Qualitative Dimensions 10. Prerequisites and Other Details.

  • Introduction to Human Resource Planning
  • Meaning of Human Resource Planning
  • Definition of Human Resource Planning
  • Need and Importance of Human Resource Planning
  • Objectives of Human Resource Planning
  • Organisation of Human Resource Planning
  • Factors Affecting Human Resource Planning
  • Human Resource Planning at Different Levels
  • Quantitative and Qualitative Dimensions of Human Resource Planning
  • Prerequisites of Human Resource Planning
  • Relationship of Human Resource Planning with Other Personnel Processes
  • Cost-Contribution Analysis in Human Resource Planning
  • Responsibility of Human Resource Planning
  • Integration of Strategic Planning and Human Resource Planning
  • Human Resource Planning and Environmental Scanning
  • Human Resource Planning – Mapping an Organisation’s Human Capital Architecture
  • Edgar Schein’s Human Resource Planning and Development System
  • Human Resource Planning – Benefits
  • Problems of Human Resource Planning
  • Recent Implications of Human Resource Planning
  • Recent Trends of Human Resource Planning

Human Resource Planning – Introduction :

Human resources undoubtedly play the most important part in the functioning of an organization. The term ‘resource’ or ‘hu­man resource’ signifies potentials, abilities, capacities, and skills, which can be developed through continuous interaction in an organizational setting.

ADVERTISEMENTS:

The interactions, interrelationships, and activities performed all contribute in some way or other to the development of human potential. Organizational productivity, growth of companies, and economic development are to a large extent contingent upon the effective utilization of human capa­cities.

Hence, it is essential for an organization to take steps for effective utilization of these resources. In the various stages in the growth of an organization, effective planning of human resources plays a key role. Matching the requirements of the job with the individual is important at all stages, including the recruitment procedures, in this endeavour.

When organizations contemplate diversification or expansion, or when employees have to be promoted, human resource planning plays an import­ant role. Further, the organizational plans, goals, and strategies also require effective human resource planning.

Human Resource Planning – Meaning :

E.W. Vetter viewed human resource planning as “a process by which an organisation should move from its current manpower position to its desired manpower position. Through planning, management strives to have the right number and right kind of people at the right places at the right time, doing things which result in both the organisation and the individual receiving maximum long-run benefit.”

According to Leon C. Megginson human resource planning is “an integrated approach to performing the planning aspects of the personnel function in order to have a sufficient supply of adequately developed and motivated people to perform the duties and tasks required to meet organisational objectives and satisfy the individual needs and goals of organisational members.”

Human resource planning may be viewed as foreseeing the human resource requirements of an organisation and the future supply of human resources and- (i) making necessary adjustments between these two and organisational plans; and (ii) foreseeing the possibility of developing the supply of human resources in order to match it with requirements by introducing necessary changes in the functions of human resource management. In this definition, human resource means skill, knowledge, values, ability, commitment, motivation, etc., in addition to the number/of employees.

Human resource planning (HRP) is the first step in the HRM process. HRP is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.

HRP translates the organization’s objectives and plans into the number of workers needed to meet those objectives. The actual HRM process starts with the estimation of the number and kind of people required by the organization for the coming period.

HRP is also known by other names such as ‘Manpower Planning’, ‘Employment Planning’, ‘Labour Planning’, ‘Personnel Planning’, etc. HRP is a sub-system in the total organizational planning. In other words, HRP is derived from the organizational planning just like production planning, sales planning, material planning, etc.

Human Resource Planning – Definition :

The organisation’s objectives and strategies for the future determine future requirement of human resources. It only means that the number and mix of human resources are reaction to the overall organisational strategy. If the intent is to get closer to people possessing requisite qualifications, the organisation should act quickly.

Human Resource Planning or Manpower Planning (HRP) is the process of systematically reviewing HR requirements to ensure that the required number of employees with the required skills is available when they are needed. Getting the right number of qualified people into the right job is the crux of the problem here.

In actual practice, this is not easy. Due to constant changes in labour market conditions, qualified people possessing relevant qualifications are not readily available. The organisation needs to go that extra mile, dig up every source of information and exploit every opportunity that comes its way in order to identify talent.

HRP is simply not a process of matching the supply of people (existing employees and those to be hired or searched for) with openings the organisation expects over a given timeframe. It goes a step further in order to reach out to right kind of people at right time, spending time, resources and energies. Without careful planning, advance thinking and prompt actions, it is next to impossible to get competent and talented people into the organisation.

Human resource planning is the responsibility of both the line and the staff manager. The line manager is responsible for estimating manpower requirements. For this purpose, he provides the necessary information on the basis of the estimates of the operating levels. The staff manager provides the supplementary information in the form of records and estimates.

Human Resource Planning – Need and Importance :

The following points highlight the need and importance of HRP in the organizations:

I. Assessing Future Personnel Needs:

Whether it is surplus labour or labour shortage, it gives a picture of defective planning or absence of planning in an organization. A number of organizations, especially public sector units (PSUs) in India are facing the problem of surplus labour.

It is the result of surplus labour that the companies later on offer schemes like Voluntary Retirement Scheme (VRS) to eliminate surplus staff. Thus, it is better to plan well about employees in advance. Through HRP, one can ensure the employment of proper number and type of personnel.

II. Foundation for Other HRM Functions:

HRP is the first step in all HRM functions. So, HRP provides the essential information needed for the other HRM functions like recruitment, selection, training and development, promotion, etc.

III. Coping with Change:

Changes in the business environment like competition, technology, government guidelines, global market, etc. bring changes in the nature of the job. This means changes in the demand of personnel, content of job, qualification and experience needed. HRP helps the organization in adjusting to new changes.

IV. Investment Perspective:

As a result of change in the mindset of management, investment in human resources is viewed as a better concept in the long run success of the enterprise. Human assets can increase in value as opposed to physical assets. Thus, HRP is considered important for the proper planning of future employees.

V. Expansion and Diversification Plans:

During the expansion and diversification drives, more employees at various levels are needed. Through proper HRP, an organization comes to know about the exact requirement of personnel in future plans.

VI. Employee Turnover:

Every organization suffers from the small turnover of labour, sometime or the other. This is high among young graduates in the private sector. This necessitates again doing manpower planning for further recruiting and hiring.

VII. Conformity with Government Guidelines:

In order to protect the weaker sections of the society, the Indian Government has prescribed some norms for organizations to follow. For example, reservations for SC/ST, BC, physically handicapped, ex-servicemen, etc. in the jobs. While planning for fresh candidates, HR manager takes into consideration all the Government guidelines.

VIII. International Expansion Strategies:

International expansion strategies of an organization depend upon HRP. Under International Human Resource Manage­ment (IHRM), HRP becomes more challenging. An organization may want to fill the foreign subsidiary’s key positions from its home country employees or from host-country or from a third country. All this demands very effective HRP.

IX. Having Highly Talented Manpower Inventory:

Due to changing business environment, jobs have become more challenging and there is an increasing need for dynamic and ambitious employees to fill the positions. Efficient HRP is needed for attracting and retaining well qualified, highly skilled and talented employees.

Human Resource Planning – Objectives :

The main objectives of HRP are:

(i) Proper assessment of human resources needs in future.

(ii) Anticipation of deficient or surplus manpower and taking the corrective action.

(iii) To create a highly talented workforce in the organization.

(iv) To protect the weaker sections of the society.

(v) To manage the challenges in the organization due to modernization, restructuring and re-engineering.

(vi) To facilitate the realization of the organization’s objectives by providing right number and types of personnel.

(vii) To reduce the costs associated with personnel by proper planning.

(viii) To determine the future skill requirements of the organization.

(ix) To plan careers for individual employee.

(x) Providing a better view of HR dimensions to top management.

(xi) Determining the training and development needs of employees.

Human Resource Planning – Organisation :

Every line manager is responsible for planning manpower of the respective department and the top management is responsible for the planning of resources for the entire organisation. The personnel department supplies relevant information and data to all the line managers and helps those regarding interdepartmental transfers, promotions, demotions etc. Personnel department also helps in using the techniques and forecasting the manpower.

Personnel department forecasts internal mobility surplus or deficit of human resources for the entire organisation, prepares action plans regarding redeployment, redundancy, employment, development and internal mobility and submits plans to the management at the top which either by its own or by appointing a committee reviews departmental plans and overall plans, make necessary adjustments and finalises the plans. Personnel department in its turn prepares modified plans for the departments based on finalised overall plan and communicates them to respective heads of department.

Personnel department may co-ordinate the control activity of human resource plan and it has to send coordinated reports to the management at the top for actual review, control and monitor the human resource system. The management at the top may appoint a committee consisting of heads of department and external identification of deviations, reasons thereof and steps to be taken to correct the deviations. The committee further helps the management in executing the programmes of corrections.

Human Resource Plan – Factors :

Several factors affect HRP. These factors can be classified into external factors and internal factors.

External Factors :

i. Government Policies – Policies of the government like labour policy, industrial relations policy, policy towards reserving certain jobs for different communities and sons-of the soil, etc. affect the HRP.

ii. Level of Economic Development – Level of economic development determines the level of HRD in the country and thereby the supply of human resources in the future in the country.

iii. Business Environment – External business environmental factors influence the volume and mix of production and thereby the future demand for human resources.

iv. Level of Technology – Level of technology determines the kind of human resources required.

v. International Factors – International factors like the demand for resources and supply of human resources in various countries.

vi. Outsourcing – Availability of outsourcing facilities with required skills and knowledge of people reduces the dependency on HRP and vice-versa.

Internal Factors :

i. Company policies and strategies – Company policies and strategies relating to expansion, diversification, alliances, etc. determines the human resource demand in terms of quality and quantity.

ii. Human resource policies – Human resources policies of the company regarding quality of human resource, compensation level, quality of work-life, etc., influences human resource plan.

iii. Job analysis – Fundamentally, human resource plan is based on job analysis. Job description and job specification determines the kind of employees required.

iv. Time horizons – Companies with stable competitive environment can plan for the long run whereas the firms with unstable competitive environment can plan for only short- term range.

v. Type and quality of information – Any planning process needs qualitative and accurate information. This is more so with human resource plan; strategic, organisational and specific information.

vi. Company’s production operations policy – Company’s policy regarding how much to produce and how much to buy from outside to prepare a final product influence the number and kind of people required.

vii. Trade unions – Influence of trade unions regarding number of working hours per week, recruitment sources, etc., affect the HRP.

Human Resource Planning at Different Levels:

Different institutions make HRP at different levels for their own purposes, of which national level, industry level, unit level, departmental level and job level are important.

i. National level – Generally, government at the centre plan for human resources at the national level. It forecasts the demand for and supply of human resource, for the entire nation.

ii. Sector level – Manpower requirements for a particular sector like agricultural sector, industrial sector or tertiary sector are projected based on the government policy, projected output/operations, etc.

iii. Industry level – Manpower needs of a particular industry like cement, textiles, chemical are predicted taking into account the output/operational level of that particular industry.

iv. Unit level – This covers the estimation of human resource needs of an organisation or company based on its corporate/business plan.

v. Departmental level – This covers the manpower needs of a particular department in a company.

vi. Job level – Manpower needs of a particular job family within department like Mechanical Engineer is forecast at this level.

vii. Information technology – The impact of information technology on business activities, human resource requirement and human resource plan is significant. It requires multi skilled expe rts, preferably less in number.

Human Resource Planning – Quantitative and Qualitative Dimensions :

Human resources have a dual role to play in the economic development of a country. On one hand they are the consumers of the products and services produced by the organizations while on the other hand they are one of the factors of production.

Along with capital and other factors of production, human resources can lead to increase in production and economic development. The rate of growth of human resources is determined by two aspects quantitative and qualitative.

Variables Determining the Quantity of Human Resources:

1. Population Policy:

Some population policies operate by influencing the factors responsible for growth such as fertility, marriage and mortality. These are known as population influencing policies. Another category of policies known as responsive policies are implemented to adjust to observed population trends with the help of programmes like health, nutrition, education, housing, etc. The aim of population policies is to achieve an optimum population for enhancing the country’s development.

2. Population Structure:

The structure or composition of the population is determined by two factors, sex composition and age composition.

(i) Sex Composition:

Sex ratio is the ratio of males to females in the population. It is the basic measure of the sex composition of the population of any area. Higher the number of females, higher will be the population growth rate in future.

(ii) Age Composition:

It is the distribution of population by age groups. Age composition is the result of past trends in fertility and mortality. The supply of labour depends on age composition as economically active population falls in range of 15-65 age groups.

3. Migration:

Net migration is another factor which causes changes in the population. Age and sex composition determine the natural growth in population, but for calculating the overall changes in population it is important to consider net migration also.

Net migration = total immigrants – total emigrants

A positive net migration will lead to a rise in population growth rate while negative net migration will reduce the growth rate of population. Migration can be both inter­regional and international.

4. Labour Force Participation:

The population of any country consists of workers and non-workers. The workers are the people, usually in age group of 15-65, who participate in economically productive activities by their mental or physical presence.

These include:

i. Employers,

ii. Employees,

iii. Self-employed persons, and

iv. Those engaged in family enterprises without pay.

The others in the population are the non-workers such as students, infants, elderly, beggars, retired people, inmates of jail or mental institutions, unemployed, etc. They do not contribute to any productive economic activity. It is the changes in the working population which affect the growth of human resources. The number of people who are unemployed but available for work also impacts the availability of labour.

Qualitative Aspects of Human Resource Planning:

The quantitative dimensions help to ascertain human resources in numbers while the productive power of human resources is assessed by the qualitative dimensions. For example, there may be hundreds of applicants for 20 vacancies, but out of these only a few may meet the quality standards required for the job.

Factors which determine the quality of human resources are:

1. Education and Training:

The quantity and quality of education and training received by human resources impacts their knowledge and skills. Education and training are important for the upliftment of both individual and society. It can be of two types, formal and informal.

Formal education is imparted through schools and colleges while informal education and training takes place through on-the-job training methods. Formal education stresses the transfer of theoretical knowledge, while informal education emphasizes on practical application of knowledge.

2. Health and Nutrition:

Health and nutrition along with education are vital for Human Resource Development. Health and nutrition impact the quality of life, productivity of labour and the average life expectancy.

Health status is determined by:

(i) Purchasing power of people.

(ii) Public sanitation, climate and availability of medical facilities.

(iii) People’s understanding and knowledge of health, hygiene and nutrition.

3. Equality of Opportunity:

Not all segments of people comprising human resources get equal employment opportunities. There is bound to be some discrimination.

The most common forms of discrimination are:

(i) Social discrimination – Discrimination on basis of gender, religion or social standing.

(ii) Economic discrimination – Discrimination based on financial positions or possession of wealth by the sections of workforce.

(iii) Regional discrimination – These are in form of discrimination between rural and urban population or between people belonging to different regions/ states.

Discrimination affects the quality and productivity of the human resources belonging to different sections of the population. The privileged classes get access to best education, nutrition and health facilities while underprivileged are deprived of their right share in the development process. For the overall, well rounded development of the country’s human resources, effective policies need to be implemented to deal with the problem of discrimination.

Human Resource Planning – Prerequisites :

i. There should be a proper linkage between HR plan and organizational plan.

ii. Top management support is essential.

iii. Proper balance should be kept between the qualitative and quantitative approaches to HRP.

iv. Involvement of operating managers is necessary.

v. Proper alignment between short-term HR plans and long-term HR plans should be there.

vi. HR plan should have in-built flexibility in order to adopt environmental uncertainties.

vii. Time period of HR plan should be appropriate to needs and circumstances of the organization.

Human Resource Planning – Relationship with Other Personnel Processes:

From a systems view, human resource planning is interrelated with many of the organization’s other endeavors in personnel management. The strongest relationship exists between human resource planning and selection. In fact, all selection efforts really are an integral part of the whole human resource planning process.

Organizations that have either stable or increasing human resource needs must go into the external labour market and hire employees even though they generally follow a promotion-from within policy.

In addition, human resource planning is related to both performance appraisal and training and development. Performance appraisals can pinpoint the skills that will be required for employees to move into higher-level positions via promotion, while training and development efforts may then be designed to provide these skills.

To meet organizational goals, human resource planning seeks to ensure that the organization’s demand for individuals at any particular time will be just met by available human resources. This view assumes that “stockpiling” employees at levels greater than needed and being understaffed are both undesirable.

This assumption represents a major difference between planning for human resources and planning for non-human resources. Although it is generally unacceptable to stockpile or build inventories of human resources, organizations may find it necessary or desirable to build up raw materials or finished-goods inventories.

It is unacceptable to hold human resource inventories for three reasons. First, human resources are costly and it may be difficult to justify the expense of excess personnel. There are sounder and more cost-effective options available to personnel planners in business firms. Second, excess people are not engaged in productive work, and are likely to be bored and frustrated by the lack of anything constructive to do.

Such boredom and frustration can create problems because excess people may make unnecessary work for productive people and may even inhibit the firm’s total productive efforts.

Third, since human resources, particularly skilled and professional people, may be in short supply, taking productive workers out of the economy’s labour pool may be considered socially unacceptable.

It is equally undesirable for an organization to operate with too few employees. As with “stockpiled” employees, individuals may feel frustrated, but in this case because of overwork rather than a lack of productive activity. This situation may also be dysfunctional to an organization’s goals.

Consider, for example, a department store during the holiday season with a shortage of sales personnel. In addition to the frustrations experienced by employees, such understaffing may also result in loss of employee efficiency.

Customers may respond to long lines and excessive waiting by taking their business elsewhere, with resultant loss of sales by the organization. Having too many or too few employees may create numerous problems for organizations-problems that can be reduced or eliminated through effective human resource planning.

Human Resource Planning – Cost Contribution Analysis :

Cost-contribution analysis of human resources is most important in HRP with a view to plan for more effective human resource system. The human resource components necessary to maximise employee contribution to the job and the organisation, and minimise the cost, should be determined in advance with the help of human resource accounting techniques.

The optimum human resource system should be planned and determined as the human resources system is the control system in the organisation because it emphasises the human contribution which critically influences the organisational effectiveness. Planning the human resource system includes determining the type of human resource components like creative and innovative skills and abilities, dynamism, leadership qualities, commitment, identification with the organisation, etc., considering the measures to acquire those human resources through recruitment, training and development and adjusting the components.

Similarly, cost of human resource should be streamlined and it should be taken as investment on human resources and not as mere cost. These items include remuneration cost (Pay, allowances, fringe benefits, other indirect costs), recruitment cost (cost of job design, advertising cost, cost for conducting tests, interview, reference checks, medical examination and induction), training costs, etc.

Human Resource Accounting (HRA) envisages capitalisation of all expenses like cost of recruitment, training etc. One of the systems of HRA i.e., replacement cost of human asset is an important tool for the formulation of manpower budget and plan for human resources.

Human Resource Planning – Responsibility :

Human resource planning is the responsibility of the personnel department. In this task, it is aided by the industrial engineering department, the top management and the team of directors of different departments. It is mostly a staffing or personnel function.

The overall responsibility lies with the Board of Directors because, as the manpower planning scheme of Hindustan Lever indicates, “these members are in a position to direct the future course of business, set appropriate goals for the management concerned in the formulation of personnel policies.”

The personnel department’s responsibility is “to recommend relevant personnel policies in respect of manpower planning, devise methods of procedure, and determine the quantitative aspects of manpower planning.”

The responsibilities of the personnel department in regard to manpower planning have been stated by Geisler in the following words:

(i) To assist, counsel and pressurise the operating management to plan and establish objectives;

(ii) To collect and summarise data in total organisation terms and to ensure consistency with long- range objectives and other elements of the total business plan;

(iii) To monitor and measure performance against the plan and keep the top management informed about it; and

(iv) To provide the research necessary for effective manpower and organisational planning.

Integration of Strategic Planning and Human Resource Planning:

Human resource planning like production planning, financial planning and marketing planning, should be a unified, comprehensive and integrated part of the total corporation. Human resource manager provides inputs like key HR areas, HR environmental constraints and internal HR capabilities and HR capability constraints to the corporate strategists. The corporate strategists in turn communicate their needs and constraints to the HR manager. The corporate strategic plan and HR plan thus incorporates both HR and other functional plans.

Corporations formulate plans to fit four time spans:

i. Strategic plans that establish company’s vision, mission and major long-range objectives. The time span for strategic plans is usually considered to be five or more years.

ii. Intermediate – range plans covering about a three year period. These are more specific plans in support of strategic plan.

iii. Operating plans cover about one year. Plans are prepared month by month in sufficient detail for profit, human resources, budget and cost control.

iv. Activity plans are the day-by-day and week-by-week plans. These plans may not be documented presents the link between strategic plan and human resource plan.

Strategic Plan Vis-a-Vis Human Resource Plan- Corporate — Level Plan :

Top management formulates corporate-level plan based on corporate philosophy, policy, vision and mission. The HRM role is to raise the broad and policy issues relating to human resources. The HR issues are related to employment policy, HRD policies, remuneration policies, etc. The HR department prepares HR strategies, objectives and policies consistent with company strategy.

I. Intermediate – Level Plan :

Large-scale and diversified companies organise Strategic Business Units (SBU) for the related activities. SBUs prepare intermediate plans and implement them. HR managers prepare specific plans for acquiring future managers, key personnel and total number of employees in support of company requirements over the next three years.

II. Operation Plan :

Operation plans are prepared at the lowest business profit centre level. These plans are supported by the HR plans relating to recruitment of skilled personnel, developing compensation structure, designing new jobs, developing leadership, improving work-life, etc.

III. Short-Term Activities Plan:

Day-to-day business plans are formulated by the lowest level strategists. Day-to-day HR plans relating to handling employee benefits, grievances, disciplinary cases, accident reports, etc., are formulated by the HR managers.

Human Resource Planning and Environmental Scanning :

Environment influences human resource management as well as business. Environmental scanning helps to know the nature and degree of environmental influence on human resource plan as well as business plan.

Managers have to scan the following environmental factors in particular:

i. Social factors including cultural factors, religious factors, child-care, educational programmes and priorities.

ii. Technological developments including information technology, people soft, automation and robotics.

iii. Economic factors including international, national and regional factors.

iv. Political factors including legal issues, laws and administrative factors.

v. Demographic factors including gender, age and literacy.

vi. Industry growth trends, competitive trends, new products, new processes, services and innovations.

The environmental scanning will help the managers to foresee the possible changes and make the adjustments in order to prevent the possible negative effects and get ready for the positive effects.

In addition to scanning the external environmental factors, organisations like Infosys, Satyam, Volvo and Southwest Airlines scan internal environmental factors. Organisational cultures, employees’ cultures affect the human resource plan as well as other areas of HRM. Organisations conduct cultural audits to know the impact of attitudes, values and activities of employees. As observed by Sears, employee positive attitude has direct and positive impact on customer satisfaction and revenue.

Most of the companies benchmark their standing and progress against each other as environmental scanning and HR planning are aimed at competitive advantage. Benchmarking is identifying the best HR practices like training and compensation in the industry, compare them with those of the firm and take steps to improve the practices to match with those of the best practices in the industry.

Target for benchmarking need not be a competitor, but the best in the industry, or companies in other industries. ‘Human Capital Benchmarking Report’ published by the Saratoga Institute provides information of 900 companies’ practices. Companies can use this source as well as the survey report of ‘Business Today’, published every year in addition to various research reports on pay structure, return on investment per employee, turnover rates, cost per hire, etc.

Human Resource Planning – Mapping an Organisation’s Human Capital Architecture :

The linkage between strategy and HR should focus on the development of core competencies. Some of the MNCs like Sony, Starbucks, Domino’s Pizza and South-West Airlines revolutionised their companies by developing core competencies.

These competencies helped these companies to have leverage by learning faster than others. Core competency is a portfolio of employee skills. Different skills of employees can be grouped based on ‘Strategic value’ they create and their distinctiveness to the organisation.

They are as follows:

i. Core Knowledge Workers:

This group of employees possesses firm-specific skills which are linked to the company’s strategy like R&D skills for pharmaceutical company and teaching skills for university employees. Companies invest in training of these employees, provide them with freedom and autonomy and offer higher salaries.

ii. Traditional Job-Based Employees:

This group of employees possesses skills that are important to the organisation, but are not critical/unique (like accountants, finance, marketing personnel). Companies invest less in developing these employees, but provide short-term financial benefits.

iii. Contract Labour:

This category of employees possesses skills, which are of less strategic value (like clerks, receptionists, drivers, security, etc.). This category of employees is normally hired from external agencies on contact basis. Organisations do not invest in training these employees and the employment relations are transactional.

iv. Alliance/Partners:

This group of employees has unique skills, but not directly related to organisation’s core function like lawyers, auditors and consultants. Companies do not employ them on regular basis, given their tangible link to the strategy but establish long- term alliances and partnerships with them.

HR managers make decisions with regard to whom to employ internally, whom to contract externally and the type of the employment relationship to be maintained. HR manager also considers the cost-benefit approach of internal employment vs. external contract in HRP.

v. Ensuring Fit and Flexibility :

Alignment between strategic planning and programmes, policies and practices of HR is vital and need to achieve two types of fit viz., external fit and internal fit.

A. External Fit:

External fit brings alignment between the business objectives/goals and major HR initiatives/practices. Growth strategy of the company is to be aligned with recruiting people with creative and innovative skills, providing freedom to them and investing on training for developing such skills. Low cost strategy is to be aligned with employing performance/productivity oriented employees.

B. Internal Fit:

Internal fit brings alignment among various HR policies and practices in order to establish configuration that is mutually reinforcing. Efficiency and creativity come from integrated effort of job design, HR Plan, recruitment and selection, training, performance management, compensation and motivation. Therefore, there should be integration among all HR functions. In addition, management should follow either individual approach or team approach for all HR functions.

Successful external and internal strategy and HRM alignment helps the organisation to increase organisational capability and competitive advantage.

vi. Cohort Analysis :

It is an analysis of risk factors of groups in which a group having one or more similar characteristics is closely monitored over time simultaneously with another group. It is one type of clinical study design and should be compared with a cross-sectional study. Cohort studies are largely about the life histories of segments of populations, and the individual people who constitute these segments. This method is used where case study approach is not feasible, creates too many statistical problems, or generally produces unreliable results. This is also called follow up study.

Cohort analysis helps to separate growth metrics from engagement metrics and helps to measure growth and identify growth problems.

Edgar Schein’s Human Resource Planning and Development System:

In his article entitled Increasing Organizational Effectiveness through Better Human Resource Planning and Development, Edgar Schein suggests that the process of HR planning and developing staff must take into account two important sets of needs – the needs of the company, and the needs and desires of the individual employees.

In the new millennium with companies showing less concern about employee career development, it’s useful to pay attention to the idea that when both employee and corporate needs are taken into account, the results, for both parties are much superior to the situation where only one set is considered.

Schein’s approach integrates HR planning and employee development.

This approach contains the following components:

1. Strategic business planning

2. Job/Role planning

3. Manpower planning and Human Resource Inventorying.

In addition staffing processes also form a part of the model

4. Job analysis

5. Recruitment and selection

6. Induction/socialization and initial training

7. Job design and job assignment

8. Development planning

9. Inventorying of development plans

10. Follow-up of development activities

11. Career development processes and a good deal more.

When doing an internal scan for purposes of human resource planning the questions that should be addressed.

When evaluating an organization’s current human resource capabilities for the purposes of human resource planning, the following questions and issues need to be addressed:

1. Are there any key forces affecting the organization’s operations (collective agreements, staffing issues, cultural issues, work/life balance, demographics, technology requirements, budget issues, expectation of clients)?

2. What knowledge, skills, abilities and capabilities does the organization have?

3. What is the company’s current internal environment? What elements support the company’s strategic direction? What elements deter the organization from reaching its goals?

4. How has the organization changed its organizational structure? How is it likely to change in the future?

5. How has the organization changed with respect to the type and amount of work it does and how is it likely to change in the future?

6. How has the organization changed regarding the use of technology and how will it change in the future?

7. How has the company changed with respect to the way people are recruited?

8. What is the public’s (or customers’) perceptions of the quality of the organization’s products, programmes, and/or services? What is being done well? What can be done better?

9. Are current programmes, processes or services contributing to the achievement of specific organizational goals?

When doing an external scan of the environment for purposes of human resources planning (HR planning), we should look for:

In order to do human resource planning, we need to have a sense of both the current external environment, and anticipate things that may happen in the future in the labour market place. We do this via an external scan or environmental scan that can address the following issues and questions.

1. How is the current external environment? What elements of the current environment are relevant to the company? Which are likely to inhibit the company from arriving its goals?

2. What are the company’s specific issues and implications of these issues? What key forces in this environment need to be addressed and which ones are less critical?

3. What is the impact of local trends on the company (demographic, economic, political, intergovernmental, cultural, technology, etc.)?

4. Are there comparable operations that provide a similar service? How might that change? How would that affect the company?

5. Where does the work of the company come from? How might that change and how would it affect the organization?

6. How might the external environment differ in the future? What forces at work might change the external environment? What implications will this have for the organization?

7. What kinds of trends or forces affect similar work in other jurisdictions?

8. What kinds of trends or forces affect the company’s partners/stakeholders and customers?

Human Resource Planning – Benefits :

Human Resource Planning (HRP) anticipates not only the required kind and number of employees but also determines the action plan for all the functions of personnel management.

The major benefits of human resource planning are:

i. It checks the corporate plan of the organisation.

ii. HRP offsets uncertainties and changes to the maximum extent possible and enables the organisation to have right men at right time and in right place.

iii. It provides scope for advancement and development of employees through training, development, etc.

iv. It helps to anticipate the cost of salary enhancement, better benefits, etc.

v. It helps to anticipate the cost of salary, benefits and all the cost of human resources facilitating the formulation of budgets in an organisation.

vi. To foresee the need for redundancy and plan to check it or to provide alternative employment in consultation with trade unions, other organisations and government through remodeling organisational, industrial and economic plans.

vii. To foresee the changes in values, aptitude and attitude of human resources and to change the techniques of interpersonal, management, etc.

viii. To plan for physical facilities, working conditions and the volume of fringe benefits like canteen, schools, hospitals, conveyance, child care centres, quarters, company stores, etc.

ix. It gives an idea of type of tests to be used and interview techniques in selection based on the level of skills, qualifications, intelligence, values, etc., of future human resource.

x. It causes the development of various sources of human resources to meet the organisational needs.

xi. It helps to take steps to improve human resource contributions in the form of increased productivity, sales, turnover, etc.

xii. It facilitates the control of all the functions, operations, contribution and cost of human resources.

Human Resource Planning – Problems:

Though HRP is beneficial to the organisation, employees and trade unions, some problems crop up in the process of HRP.

Important among them are:

1. Resistance by Employers and Employees:

Many employers resist HRP as they think that it increases the cost of manpower as trade unions demand for employees based on the plan, more facilities and benefits including training and development. Further, employers feel that HRP is not necessary as candidates are/will be available as and when required in India due to unemployment situation. Employers’ version may be true about unskilled and clerical staff but it is not true in the case of all other categories as there is shortage for certain categories of human resources.

Trade unions and employees also resist HRP as they view that it increases the workload of employees and prepares programme for securing the human resources mostly from outside. The other reason for their resistance is that HRP aims at controlling the employees through productivity maximisation, etc.

2. Uncertainties:

Uncertainties are quite prominent in human resource practices in India due to absenteeism, seasonal employment, labour turnover, etc. Further, the uncertainties in industrial scene like technological change, marketing conditions also cause uncertainties in human resource management. The uncertainties make the HRP less reliable.

3. Inadequacies of Information System:

Information system regarding human resources has not yet fully developed in Indian industries due to low status given to personnel department and less importance attached to HRP. Further, reliable data and information about the economy, other industries, labour market, trends in human resources, etc., are not available.

Human Resource Planning – Recent Implications :

Most of the organisations, employed human resources without proper HR plans before 1990s. This was more acute in the public sector whose objective was creation of employment opportunities. The absence of human resources planning before 1990s led to the following implications in Indian companies.

(i) Overstaffing – Most of the organisations are found to be overstaffed compared to their counterparts in other countries.

(ii) VRSI Golden-handshake – The absence of human resources planning led to overstaffing. Consequently, most of the organisations announced VRS/Golden-handshake programmes in order to reduce the consequences of overstaffing.

(iii) Delayering and Downsizings Most of the organisations de-layered their organisations and announced downsizing programmes to rectify the consequences of overstaffing.

Human Resource Planning – Recent Trends :

Unfortunately, the human resource planning efforts of organizations have often been inadequate by failing to emphasize the truly systematized approach geared toward meeting overall objectives.

As Lopez and others have observed:

Some organizations have perceived manpower planning primarily in terms of budgeting to control labour costs; others have viewed it as a management development technique; still others see it as a table of back-ups and replacements for current employees; and finally, others have viewed it as a means of establishing a human resource information system and a personnel inventory.

Since each of these approaches is necessarily limited in scope, the state of the art in human resource planning has limped along quite slowly.

Toward More Sophisticated Human Resource Planning:

In recent years, both personnel practitioners and researchers emphasized some of the basic facets of personnel decision making (1) taking systems and contingency approaches, and (2) developing more sophisticated human resource forecasting and planning models. For example, the growth of equal employment opportunity regulations in recent years has increased the awareness of human resource planners of the effects of external changes on personnel systems.

The observations are in order regarding these more sophisticated approaches. First, more complex planning systems have generally been used in larger firms. Large organizations generally must undertake complex human resource planning and can afford the higher costs of such approaches.

Second, although a wide range of human resource models have been developed, some of these models have ignored so many “real life” personnel variables that they have had virtually no practical application. On the positive side, there have been numerous quantitative models that have been very useful to organizations.

There are a number of reasons for the recent increase in the use of more sophisticated human resource planning models. For example, organizations simply have been growing larger and more complex, requiring more sophisticated approaches. This has been especially true in those organizations in which interdependencies have increased.

The invention and development of the computer has made possible the analysis of complex human resource problems that would previously have been so time-consuming as to be cost prohibitive or virtually impossible to deal with by manual computations.

“The manpower mix in organizations had gradually come to focus around highly skilled managerial and technical talent.” Such personnel have at times been in short supply, and more of a lead time has been required for their training and development.

Once an integrated, well-thought-out human resource planning programme has been initiated, managers tend to appreciate its benefits and work together with the firm’s human resource specialists in developing viable programmes-“they are more willing to plan in this area, if only they are shown how to begin,”

Problems with Sophistication in Human Resource Planning:

Despite these reasons for the growth of more sophisticated human resource planning, such approaches face a number of problems:

1. There is an inherent mathematical complexity associated with efforts to model human resource systems.

2. Always there is a lack of certainty surrounding human resource needs in the future, coupled with the existence of an acquisition lead time for meeting those needs. Even if an organization’s human resource planning experts were completely uncertain about the number of operation researchers that would be needed at a point in future, the organization would face no problems if it could at that future time instantaneously obtain any number of such personnel to meet its objectives.

However, lead times are needed to recruit and train new personnel and to train and promote existing employees for new positions or assignments. Acquisition lead times have become more of a problem in recent years because of the needs for highly skilled managerial and professional personnel.

Since this trend is expected to continue in future years, the problem of acquisition lead times creates forecasting difficulties for most organizations.

Finally, human resource plans must be updated more frequently in firms (or in any of their subsystems) in which greater uncertainty exists. As one observer has observed-

“Increasing instability and the greater uncertainties associated with certain job requirements (e.g., research and development or marketing) indicate a requirement for more up-to-date information on emerging needs. This manpower data is increasingly subject to change, and organizational needs dictate timely information with appropriate systems support”.

Related Articles:

  • Human Resource Planning Process (with steps)
  • Features of Human Resource Planning
  • Definition of Human Resource Management

Human Resource Planning: Importance, Need And Types

Sunita joined a small IT firm’s HR department three months before the pandemic hit. She witnessed front and center just…

Importance Of Human Resource Planning

Sunita joined a small IT firm’s HR department three months before the pandemic hit. She witnessed front and center just how much the organization struggled to shift everything online compared with its industry peers. After the initial wave of lockdowns was over, the leadership did an audit and found they lacked preparedness in several areas for unforeseen circumstances. They had a need for human resource planning.

The various types of human resource planning are all about aligning an organization’s long-term people management strategy with its strategic objectives. These objectives may be to grow in market share, enter new markets, improve customer service levels or product quality, make improvements in workflow and personnel well-being and introduce innovative products and services. It’s difficult to achieve these objectives without the right talent, and that’s where the importance of human resource planning comes in.

The Need For Human Resource Planning

Types of hr planning, importance of human resource planning .

An understanding of human resource planning objectives is needed to execute the organization’s business strategy. HR planning makes sure your organization is able to leverage its human resources for growth. This will result not only in financial success but also in product and customer service excellence. 

Its purpose is to allocate the workforce toward the most productive areas in terms of organizational goals and objectives and optimize utilization. Here are some steps to take to get started:

  • Human resource planning objectives can only be met once you understand the organization’s aims and needs for growth. 
  • When the organizational objectives and strategic goals are clear, the planning process begins by evaluating the current state of the workforce. 
  • HR planners identify those competencies that will be required for success. This analysis allows planners to identify issues, make the right hires and solve problems before they become serious. 

Planning methods vary according to an organization’s culture and strategy. Each has its own need for human resource planning .

There are several types of human resource planning that organizations may engage in. They’re not mutually exclusive. Here’s a closer look:

Talent Management

Workforce planning, change management.

These human resource planning objectives account for the various needs organizations might have from their HR policy. Several types of human resource planning are required to ensure that the future workforce and its capabilities are compatible with the business strategy.

Importance Of Human Resource Planning

When we take stock of the types of human resource planning , the importance of human resource planning also becomes clear. Here is a recap of the value organizations can gain by investing in their HR process:

  • It allows organizations to create an appropriate working environment  
  • It helps organizations account for changing industry trends before they become pressing issues, allowing them to adapt well in time  
  • There’s a need for human resource planning to create a blueprint for growth for the entire organization
  • An HR plan balances the human needs of an organization alongside the growth needs
  • A well-articulated plan can help create an environment of inclusivity and diversity 

The i mportance of human resource planning can be misunderstood by managers. But it’s a core function that needs due attention and thought. Keeping human resource planning objectives in mind will help an organization grow in a balanced and harmonious way, which allows for growth of employees.

Human resources are essential to creating teams that work well together. Another way to boost productivity with better teamwork is Harappa’s Lead With Empathy pathway. This leadership course will help you build better team culture, create and build trust and boost team outcomes. It’ll teach different leadership styles and conflict resolution. Most importantly, it’ll help build empathy. Become a better leader today! 

  • Agile Workplace
  • Competitive Advantage Strategy Guide
  • Productivity
  • Profitability
  • M&A HR Timesaver Kit

HR C-Suite - Connect Workforce Strategies for Business Results

  • Workforce Strategies Consulting
  • Sign Up: Free Newsletter

Select Page

Importance of Human Resource Planning in Organizational Success

Posted by Sampurna Majumder | Strategic Planning , Trending | 1

Importance of Human Resource Planning in Organizational Success

HR planning forms an integral part of any organization and it ensures that an organization succeeds in achieving all its targets. The following post explores the significance of HR planning in organizational success.

Introduction

Just as planning is important in our daily lives’, planning forms an integral part of an organization. An organization’s success lies to a great extent to the skill, creativity and dedication of its employees. Here comes the importance of Human Resource Planning. Surprisingly, many organizations tend to overlook this aspect of HR and some are even not completely aware of it. Organizations that overlook this aspect of planning, have less chances of surviving in the long run; needless to say that a proper HR planning can help in dealing with a lot many issues in an effective way.

HR Planning – Definition

HR planning is a part of the larger gamut of Human Resources, and it is defined as the systematic analysis of HR needs that ensures that correct number of employees with the necessary skills are available when they are required. While preparing the planning programme, practitioners should bear in mind the objectives that they need to achieve. This is precisely the reason for seeking employment by most jobseekers. If these requirements are neglected by authorities it can lead to unnecessary poor performances and other industrial issues.

Becoming a HR Professional

Now, as a task, planning is not easy. It requires a lot of concentrated efforts to come with such a programme that would help ease your work. Competent HR professionals put in a lot of effort in order to launch an efficient HR planning programme. In order to become a HR professional formal training is mandatory. Several courses related to HR are taught in educational institutes across the globe. Among all major courses, MBA in HR is the most popular. As a course, MBA in HR is offered in several institutes. An extensive course in HR provides the required curriculum and training that empowers a candidate to excel in this field.

Significance of HR Planning

Planning is a process that has to be commenced from somewhere and completed for a particular purpose. It involves gathering information that ensures managers are able to make sound decisions. The obtained information is also utilized in order to achieve it’s the goals. If HR planning is applied properly, it can help in answering the four important questions:

  • What is the strength of the organization?
  • As far as skill sets are required what kind of employees does the organization have?
  • How should the organization function in order to be able to utilize all its resources properly?
  • How can the company retain its employees?

Effective HR planning helps the organization work smoothly and also achieves success in the present times. HR professionals working towards developing HR planning for an organization, assists the organization to manage its staff strategically. Apart from that HR planning can also ensure a proper career planning for employees and help them in achieving their goals. It will also ensure augmentation and eventually make the organization a better place to work in. The major steps involved in HR planning include the following:

  • Forecasting
  • HR Resource Plan
  • Actioning of Plan
  • Monitoring and Control

From forecasting to Actioning of planning requires a lot of concentrated effort. The HR department of any organization has an enormous task – that of keeping pace with all the changes and ensure that the organization has the right kind of employees at the right time.

Ineffective HR Planning

On the other hand, poor HR planning or the absence of the same in an organization can result in huge loss or financial crisis. It may take a long time for vacancies to be filled. Needless to say it hampers work and has an adverse effect on the organization in the long run.

One of the most important reasons as to why HR planning should be implemented and effectively managed is the costs that are involved. Since budget forms an integral part of any business organization, proper planning can ensure provision costs related to HR.

HR planning must be taken seriously and it should involve creating a path for advancement for both—the organization and the employee.

Need to implement strategic planning in a hurry? Check out our HR Strategic Planning Timesaver Kit TM  here!

  • Latest Posts

importance of human resource planning in business

Sampurna Majumder

Latest posts by sampurna majumder ( see all ).

  • Importance of Human Resource Planning in Organizational Success - January 13, 2023

About The Author

Sampurna Majumder

A follower of the latest trends in education in India, Sampurna Majumder has been lending her expertise to several websites by writing articles and blog posts on the current educational trends in India such as these. She is a passionate writer and a blogger. The above post provides an insight into the significance of HR planning and also courses in HR, especially MBA in HR.

Related Posts

Wiifm to join your organization.

July 23, 2023

How To Choose The Best Staff For Your Small Business

April 30, 2013

Bridging the Gap: HR Strategies for Profitability and Productivity

Bridging the Gap: HR Strategies for Profitability and Productivity

January 4, 2024

Get Off The Couch: Employee Surveys

September 8, 2019

Human Resource

I really appreciate you for sharing all the useful information with us.

importance of human resource planning in business

Find Unique Resources in Our Bookstore

Mastering Strategic Workforce Planning in a Post-Pandemic World

Featured Categories

  • Career Management
  • Competitive
  • Crisis Management
  • Digital Readiness
  • Economic Crisis
  • Employee Engagement
  • Faith Based Leader
  • Great Resignation
  • Healthcare Shifts
  • Healthy Workplace
  • HR Analytics
  • Organizational Effectiveness
  • Remote workforce
  • ROAR Academy Topics
  • Shaping Culture
  • Small Business
  • Strategic Mindset
  • Strategic Planning
  • Strategic Workforce Planning
  • The Navigator
  • Tresha Moreland
  • Workforce Development
  • Workforce Shifts
  • Workforce Shortage

workforce transformation

Sign up and get this FREE guide!

1) HR and Leadership strategy thought articles delivered to your inbox once a week;

2) Access to white papers and special reports as they become available;

3) Access to tools and resources;

4) Discount information from our partners. 

You have successfully registered!

staffany logo

Understanding the Importance of Human Resource Planning

Staffany malaysia.

  • February 6, 2023

Home » HR Management » Understanding the Importance of Human Resource Planning

Human Resource Planning (HRP) is a vital aspect of business operations that involves forecasting future personnel needs and developing strategies to meet them. It includes determining the number and types of employees needed, identifying skill gaps, and creating a plan to attract, retain, and set the necessary talents.

By effectively implementing HRP, businesses can manage their staff efficiently and adapt to changes in the economy, legislation, or technology. To effectively manage your business’s staffing, it’s essential to understand the importance of HRP and develop strategies to meet your personnel needs.

What Is Human Resource Planning?

What Is Human Resource Planning

Human Resource Planning (HRP) is a vital process for any business that aims to align its workforce with its strategic objectives. It involves forecasting future personnel needs, identifying potential skill gaps, and developing strategies to address them. By effectively implementing HRP, businesses can ensure they have the right number and types of employees with the necessary skills to meet current and future demands. This human resource management also involves creating a plan to attract, retain and set the necessary talents.

One of the key components of hr planning is forecasting the number and types of employees needed in the future. This step involves analysing current and projected business needs, as well as considering external factors such as changes in the economy, legislation, or technology. Once the forecast is complete, businesses can develop strategies to meet those needs, such as recruiting new employees , training existing staff, or outsourcing specific tasks. This allows businesses to proactively address workforce shortages and skill gaps, and position themselves for long-term success.

Read more: The Importance of Relationship Management with Customers

Why Human Resource Planning Matters?

What Human Resource Planning Brings to the Business

Human Resource Planning brings many benefits to businesses. In this section, we will explore some of the specific benefits that HRP brings to your business.

1. Improved Efficiency

Effective human resource planning helps improve efficiency and is essential for any business that wants to achieve operational excellence. By forecasting future personnel needs and developing strategies to meet them, businesses can ensure they have the right number and types of employees with the necessary skills to meet current and future demands. This leads to increased productivity, better performance and reduced costs.

2. Better Talent Retention

Human resource planning helps your business with employee retention adn employee turnover rate as well. B y identifying skill gaps and developing strategies to fill them, businesses can provide their employees with the necessary skills to advance in their careers. This not only helps to reduce turnover but also improves employee satisfaction and engagement. This can help a business to build a talented and motivated workforce that can drive long-term success.

3. Increased Flexibility

Human resource planning can be a powerful tool for increasing the flexibility and competitiveness of your business. By forecasting future human resource needs and developing strategies to meet them, your business can ensure it has the right talents with the necessary skills to adapt to changes in the market, such as new technologies or changes in consumer preferences.

This allows a business to stay agile and responsive to market shifts, giving it a significant advantage over competitors who lack the same level of foresight and strategic manpower planning. 

4. Better Financial Planning

Human resource planning can help your business make better financial decisions. You can better predict and plan for human resource budget, such as salaries and benefits for existing employees and hiring costs for attracting new talents. This allows for more informed financial strategic planning and decision making , as the business can more accurately project and allocate resources for staffing needs.

Read more:   Understanding Employee Management System and Its Benefits

5. Improved Employee Development

Lastly, human resource planning enables a business to identify potential skill gaps among its current employees and provide opportunities for professional development and growth. By providing your human resources with training, mentoring, and other opportunities for skill-building, a business can not only improve employee satisfaction and retention but also increase the overall skill level of its workforce. This can lead to increased productivity and improved performance, driving the growth and success of the business. 

6. Compliance and Risk Management

Effective human resource planning ensures compliance with legal and regulatory requirements related to employment practices, diversity and inclusion, compensation, and employee benefits. It also mitigates risks associated with workforce gaps, skill shortages, or sudden changes in labor market conditions.

7. Organizational Agility

By having a well-planned and adaptable workforce, organizations can respond effectively to changing market conditions, industry disruptions, or growth opportunities. Human resource planning allows organizations to anticipate and address talent gaps, ensuring the availability of the right skills and competencies at the right time.

Overall, human resource planning plays a critical role in aligning the organization’s workforce with its strategic goals, optimizing talent utilization, fostering employee development and engagement, and ensuring long-term organizational success.

Read more:  Understanding Manpower Planning and Its Importance in F&B

Ultimate Scheduling Solution

The Steps of Human Resource Planning Process

Basic Steps in Human Resource Planning

Implementing human resource planning involves several steps, from forecasting personnel needs, developing strategies to meet those needs, implementing, and monitoring those strategies. Let’s elaborate:

1. Forecasting Personnel Needs

First, as a human resource planners, you should forecast personnel needs by analysing current and projected business needs, taking into account external factors such as changes in the economy, legislation, or technology. This will help you determine the number and types of employees you will need in the future.

2. Developing Strategies

Once the forecast is complete, you can develop strategies to meet those needs. This can include recruiting new employees, training existing staff, or outsourcing specific tasks. It’s essential to consider the organisation’s overall goals and objectives when developing strategies to ensure that they align with the overall mission and vision of the company.

3. Job Analysis and Job Design

Conducting a detailed job analysis to understand the specific tasks, responsibilities, and qualifications required for each job role within the organization. This information helps in determining the skills and competencies needed for future hires or existing employees to perform effectively. Job design involves structuring and organizing job roles to optimize productivity and align with the organization’s objectives.

4. Implementing and Monitoring

The next step is to implement the strategies developed in the previous step. During the implementation, it’s important to track the progress of these strategies to ensure that they are achieving the desired results. This can include monitoring the recruitment process, employee retention, and performance metrics.

5. Reviewing and Updating

HRP is an ongoing process, and it is vital to review and update strategies as needed. This step may involve adjusting strategies to meet changing business needs or recruiting and retention strategies to address changes in the job market.

Read more:  A Comprehensive Guide on Shift Work Schedule Management in the F&B Industry

With effective HR Planning in place, your business can reduce turnover and improve employee satisfaction which ultimately leads to reduced costs associated with the recruitment and training of new staff. Overall, HRP is a critical process for any business looking to promote employee development, improve performance, and drive long-term success.

Manage your resources effectively with StaffAny. As a workforce management solution, StaffAny’s smart timesheets tool can help your business manage cost control with our time clock sidekick that automates rounding, early clock-in prevention, and auto clock-out to help control your budgeted costs.

With StaffAny, staff can see their own work history and improve their performance. Never has the reconciliation of work hours & staff work been made so simple. The transparency of our employee timesheets allows fast rectification of unmatched timesheets. To ensure accuracy, overtime calculations, work performance, and any anomalies are automated and flagged out for your attention.

Aside from helping with human resource planning,  your business can improve communication between staff – where they can view their own timesheets, improving trust and eliminating payslip discrepancies. Find out how StaffAny can help with your human resource planning, get in touch with us via whatsapp or start your free trial now!

StaffAny Malaysia

Like this article?

Related article.

how to deal with food crisis

How to Deal with a Food Crisis in the F&B Industry?

packaging design process

Exploring the 5 Key Elements of Product Design

The Ultimate Guide to the Packaging Design Process

Leave a comment

importance of human resource planning in business

Track employee attendance with ease. Automate schedules, timeclocks, timesheets and rostering, all in one platform, so you can focus on running your business.

Why StaffAny

Calculate your savings with StaffAny

StaffAny Singapore

StaffAny Indonesia

Onsite Timeclock

Smart Timesheets

Leave Application

Real Time Reports

Connected Workforce

Case Studies

Partner List

Sign up to be a Partner

  • Terms of Service
  • Privacy Policy

Bright Logo

Applicant Tracking System

Speak to us via WhatsApp!

Terms of Service       |      Privacy Policy

© StaffAny 2023

importance of human resource planning in business

  • United States (English)
  • Australia (English)
  • Belgium (English)
  • Canada (English)
  • Denmark (English)
  • Deutschland (Deutsch)
  • España (Español)
  • Finland (English)
  • France (Français)
  • Hong Kong (English)
  • Indonesia (English)
  • Ireland (English)
  • Italia (Italiano)
  • Luxembourg (English)
  • Malaysia (English)
  • México (Español)
  • Nederland (Nederlands)
  • New Zealand (English)
  • Norway (English)
  • Österreich (Deutsch)
  • Schweiz (Deutsch)
  • Singapore (English)
  • South Africa (English)
  • Sweden (English)
  • Taiwan (English)
  • Thailand (English)
  • United Kingdom (English)

Why HR Leaders Must Get More Strategic About Payroll

Payroll has the potential to provide valuable insights for strategic decision-making, creating a big impact on business outcomes and significantly influencing the success of an organization.

importance of human resource planning in business

In this article, we discuss:

  • Why HR leaders must implement strategic payroll practices to drive business outcomes
  • The role of automation in elevating payroll as a strategic partner
  • Why payroll is more than a transactional function and can provide valuable insights for decision-making

Faced with a rapidly changing business landscape, the C-suite increasingly looks to HR leaders to create a robust talent strategy that fuels the broader business strategy. That’s a positive trend in helping HR achieve the strategic partner status it deserves. But for HR leaders to continue to elevate their strategic presence, operational HR functions must also evolve—specifically, payroll. 

Payroll operations is a business-critical function, but its back-office nature fosters the notion that running payroll is as simple as hitting a button. In reality, payroll is more than a transactional function. It has the potential to provide valuable insights for strategic decision-making and, ultimately, impact business outcomes.

HR leaders who recognize the importance of payroll as a strategic function can unlock the full potential of their role as a strategic partner, enabling their organizations to stay ahead amid a dynamic marketplace.

Payroll’s Potential: It’s All About the Data

Payroll is like a car engine—it may not be the most glamorous part, but it’s essential for everything else to function. It also impacts employees at a personal level and plays a big role in the overall employee experience. 

If payroll isn’t delivered accurately, on time, and in compliance, that can directly affect an employee’s ability to put gas in their car or purchase food. In the workplace, employees’ ability to quickly manage benefits and get answers related to their pay can make all the difference in fostering an engaged and empowered workforce.

But can payroll make the all-the-difference impact that drives business outcomes? Yes, and it does so in the same way it impacts the employee experience: through payroll data.

Stacey Harris, chief research officer and managing partner of Sapient Insights Group, shared that insight on a Workday-sponsored episode of HR, We Have a Problem , a podcast miniseries hosted by Teri Zipper, chief executive officer of Sapient Insights Group. 

“Time and time again, our data shows that rolling data throughout the organization—to more than just the executives, to more than just the HR business partners—but to all levels within the organization at some point and providing guidance on how that data should be read is . . . just like any other sort of metric, [and] allows you to make some adjustments to what you’re doing, to how you’re working with your employees,” Harris says.

For example, payroll data provides details on labor costs and tax liabilities by location, offering insights to make smart business decisions and run a compliant payroll process. From a workforce planning perspective, payroll data showing more overtime costs in one office location versus another can prompt leaders to assess workforce gaps and talent management approaches.

For payroll to serve as a strategic HR function, automation should be done with a focus to help payroll professionals deliver forward-looking metrics.

How Automation Elevates Payroll’s Strategic Potential

Payroll plays an important role in helping to ensure organizations operate ethically and within government regulations. However, this requires tactical work, which can involve calculating payroll taxes, data entry, or conducting audits and leave little time for professionals to focus on strategic work. 

Although technology has helped payroll processes become more streamlined, companies still aren’t achieving enough efficiencies. According to Deloitte’s most recent “Global Payroll Benchmarking Survey” report, more than 25% of survey respondents indicated that their payroll staff spends the most time each month on running payroll that is largely manual.

So, what can make the difference for payroll teams to be viewed as strategic versus just getting the job done? It’s driving efficiency with a focus on creating business impact.

First, HR leaders should assess payroll’s workload: “You have to take a step back and say, ‘I need to either get help so I can figure out how to do this more efficiently, or get help so I can outsource some of these elements and figure out what that cost is and how that will save me,’” Harris says.

While automation has helped streamline and simplify parts of the payroll process, it should do more than drive efficient record-keeping and tax filings. For payroll to serve as a strategic HR function, automation should help payroll professionals deliver forward-looking metrics. 

“[For] the organizations that were viewed as strategic, what they were doing differently from a reporting perspective was going beyond compliance reports and providing other information,” says Teri Zipper, chief executive officer of Sapient Insights Group. 

Take, for instance, overtime insights from payroll data. Tracking overtime is important to comply with labor laws and budgeting, but it can also alert company leaders to root causes and forecast future costs. Are employees working overtime because there’s a staff shortage? Or are staff working overtime due to the incentive of increased extra pay, possibly signaling a lack of efficiency?

“That’s when you start to realize that’s a forward-looking metric for workforce planning that most organizations overlook,” Harris says. “That’s the piece where, when you’re being strategic, you have to not just look behind you at what you need from a workforce planning perspective, but also ahead of you.”

Most organizations don’t connect the dots to the payroll data and workforce planning or employee experience until employees voice frustration, Harris adds. 

“And that’s not when you want to be making those decisions,” Harris says.

Utilizing Data-Driven Insights for Better Decision-Making

In times of uncertainty, HR leaders can leverage data-driven insights from payroll services to make better decisions. By analyzing payroll data, HR can gain valuable insights into employee performance, productivity, and engagement.

These insights can inform strategic workforce planning and help organizations navigate challenging times with agility and resilience. With the right payroll technology and analytics tools, HR leaders can harness the power of data to drive informed decision-making and optimize the use of their workforce for improved business outcomes.

Learn more about elevating payroll as a strategic HR function through the Workday on-demand webinar “Mastering Outcomes: a New Leadership Model for Strategic HR and Payroll.”

Two Workday leaders share why organizations need to rethink their global payroll strategy and explain what organizations need in order to make the shift.

importance of human resource planning in business

Companies can thrive when they maximize their available HR data and resources. Read this whitepaper to learn about strategic HR and how organizations can implement it for greater business success.

Read Whitepaper

In this webinar, a panel of HR strategy experts explain how to raise core HR and payroll practices to a strategic level and achieve actionable business results.

Watch Webinar

More Reading

Two colleagues working on a tablet together in an office conference room

Why CFOs Must Focus on Closing the AI Trust Gap

Finance leaders should work to improve trust around AI to help improve adoption of the technology and enable digital transformation to achieve greater productivity, Workday CFO Zane Rowe said at the most recent World Economic Forum in Davos.

importance of human resource planning in business

Workday’s Global Payroll Strategy: A Connected HR and Payroll Experience

Our global payroll strategy combines Workday technology with an expansive partner ecosystem to provide customers with the solutions that best support their evolving needs.

importance of human resource planning in business

Bolster Your Talent Strategy With a Flexible Workforce: 3 Crucial Tips

Closing the talent gap is a persistent issue for organizations, exacerbated by rapid technological advancements. Addressing it requires a flexible talent strategy that includes utilizing the contingent workforce and promoting internal talent mobility.

  • Growth and Jobs at Davos 2024: What to know
  • How using genAI to fuse creativity and technology could reshape the way we work

1. Generative AI boosts productivity, unevenly

In 2024, most chief economists surveyed by the Forum believe generative AI will increase productivity and innovation in high-income countries. But for low-income countries, just over a third think this will be the case.

Productivity boosts are expected in knowledge-heavy industries, including IT and digital communications, financial and professional services, medical and healthcare services, retail, manufacturing, engineering and construction, energy and logistics.

These potential benefits are in "sharp contrast with concerns about the risks of automation, job displacement and degradation", says the report.

Almost three-quarters (73%) of chief economists surveyed "do not foresee a net positive impact on employment in low-income economies".

importance of human resource planning in business

2. Digital jobs keep growing

By 2030, the number of global digital jobs is expected to rise to around 92 million. These are generally higher-paid roles, according to the Forum's white paper, The Rise of Digital Jobs .

Digital jobs could help to balance skill shortages in higher-income countries, while boosting opportunities for younger workers in lower-income countries: "If managed well, global digital jobs present an opportunity to utilize talent around the world, widening the talent pool available to employers and providing economic growth pathways to countries across the income spectrum."

3. Unemployment levels could rise

The labour market showed resilience in 2023, with employment remaining high, said Gilbert Fossoun Houngbo, Director-General of the International Labour Organization (ILO), in the Davos session ' What to Expect From Labour Markets '.

But he said ILO projections in early January suggested the global unemployment rate could rise from 5.1% to 5.2% in 2024, with an extra two million workers expected to be looking for jobs.

In the US, the jobs market remained stronger than expected for the first month of the year, with more than 350,000 new jobs added. The unemployment rate for January was 3.7%, close to a 50-year low, according to The Guardian .

Houngbo said ILO data shows inequalities persist between low- and high-income countries, while young people are 3.5 times more at risk of being unemployed than the rest of the adult population and "many workers are struggling to pay bills, which is very worrisome".

The impact of AI on jobs was not going to be "an employment apocalypse", but that reskilling, upskilling and lifelong learning would be key to managing the transition to augmentation, he stressed.

4. More pop-up offices

LinkedIn has seen a drop in the number of fully remote job postings, from a peak of 20% in April 2022, to just 8% in December 2023, said co-founder Allen Blue, speaking in a Davos session ' The Role of the Office is Still TBC ' .

But employee interest in taking remote or hybrid jobs remains high, at around 46% of applications.

"The office is going to be in competition with working from home ... that’s a good thing for the office," he said, as management would need to innovate and create a workplace environment that "emphasizes dynamic human interaction".

Young people taking their first job want human connection, so they're more interested in hybrid than remote roles.

Martin Kocher, Austria's Federal Minister of Labour and Economy, said that some Austrian villages are actually paying for pop-up community office spaces, because people don’t want to work from home, and they can make use of other amenities close by.

He predicted the development of more pop-up office spaces away from company headquarters.

Have you read?

  • Davos 2024: 6 innovative ideas on reskilling, upskilling and building a future-ready workforce
  • From hierarchy to partnership: rethinking the employee/employer relationship in 2024

5. Skills will become even more important

With 23% of jobs expected to change in the next five years, according to the Future of Jobs Report, millions of people will need to move between declining and growing jobs.

Coursera CEO, Jeff Maggioncalda and Denis Machuel, CEO of Adecco Group AG, joined the Davos session ' The Race to Reskill ' to discuss the transferability of skills, and the potential of AI to help with personalized learning and productivity, which also levels the playing field for job opportunities globally.

But the key is in learning how to use AI and digital technologies, as Code.org Founder and CEO, Hadi Partovi, pointed out in the session ' Education Meets AI '.

When people think about job losses due to AI, he said, the risk isn't people losing their jobs to AI: "It's losing their job to somebody else who knows how to use AI. That is going to be a much greater displacement.

"It's not that the worker gets replaced by just a robot or a machine in most cases, especially for desk jobs, it's that some better or more educated worker can do that job because they can be twice as productive or three times as productive.

“The imperative is to teach how AI tools work to every citizen, and especially to our young people."

6. More women enter the workforce

In 2020, the World Bank found that potential gains from closing economic gender gaps could unlock a “gender dividend” of $172 trillion for the global economy.

But the Forum’s Global Gender Gap Report 2023 found that the Economic Participation and Opportunity gap has only closed by just over 60%.

Several sessions at Davos looked at how inclusion could benefit the economy , particularly by helping mothers return to the workforce, which could close skills gaps.

“There are 606 million women of working age in the world who are not working because of their unpaid care responsibilities, compared to 40 million men," Reshma Saujani, Founder and CEO of Moms First, explained in a session on the ‘ Workforce Behind the Workforce ’.

“At Moms First, we're working with over 130 companies in every sector, who are saying, ‘I don't have enough workers’. We are working with them to redesign their childcare packages and increase their subsidies.

“Childcare pays for itself. When you offer childcare to employees, you get higher worker productivity and lower rates of attrition, and greater rates of retention. We have to look at care as an economic issue that world leaders must actually do something about.”

IMAGES

  1. 10 Importance of Human Resource Planning

    importance of human resource planning in business

  2. 22 Great Importance Of Human Resource Planning

    importance of human resource planning in business

  3. What is Human Resource Planning Process? Business Jargons

    importance of human resource planning in business

  4. Human Resource Planning

    importance of human resource planning in business

  5. Why Human Resource Planning is Important

    importance of human resource planning in business

  6. 7 Steps of Human Resources Planning

    importance of human resource planning in business

VIDEO

  1. Human Resource Planning

  2. Human Resource Planning

  3. Human Resource Management

  4. Human Resource Management

COMMENTS

  1. 10 Importance of Human Resource Planning

    Following are the importance of human resource planning: Future Personnel Needs Part of Strategic Planning Creating Highly Talented Personnel International Strategies Foundation for Personnel Functions Increasing Investments in Human Resources Resistance to Change Uniting the Viewpoint of Line and Staff Managers Succession Planning Other Benefits

  2. 8 Key Benefits of Implementing a Human Resource Planning

    Human resource planning is a crucial process for businesses as it helps align the company's workforce with its strategic goals and objectives. Implementing it can provide significant benefits to businesses as mentioned below. 1.

  3. Why Is Human Resources Important? 8 Top Reasons

    HR is responsible for maintaining a productive and harmonious work environment and supporting the organization's overall goals by effectively managing its human capital. What is Human Resources Management (HRM)? While HR and Human Resource Management (HRM) are often used interchangeably, there is a slight difference between the two.

  4. Human Resource Planning (HRP) Meaning, Process, and Examples

    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...

  5. Why Is Human Resource Planning Essential For Businesses?

    Talentedge EXPLORE COURSES Why Is Human Resource Planning Essential For Businesses? Of all the resources in an organization, it is the human workforce that is considered most valuable. Only people can come up with innovative ideas to improve efficiency. Men are required to operate machinery.

  6. Human Resource Planning: Definition, Steps and Tools

    Image description Ensuring the productivity and longevity of a business means planning for the future and anticipating human resource changes. Human resource planning allows businesses to determine the talent that they currently have and the talent they likely need in the future.

  7. Human Resource Planning: Importance, Need And Types

    The importance of human resource planning is that it helps build a pool of talent capable of meeting business objectives, increasing its competitiveness. The focus is on developing talent to ensure the business is successful in the long term.

  8. The new possible: How HR can help build the organization of the future

    To usher in the organization of the future, chief human-resources officers (CHROs) and other leaders should do nothing less than reimagine the basic tenets of organization. Emerging models are creative, adaptable, and antifragile. 1 Corporate purpose fuels bold business moves. "Labor" becomes "talent.".

  9. Human Resource Planning (HRP): A Step-By-Step Guide

    Human resource planning, or HRP, stands out as a strategic and methodical process designed to ensure that your organization fully leverages its human capital. It is not a one-time event but rather a continuous journey toward operational excellence and strategic alignment. At its core, HRP aims to establish a seamless alignment between your ...

  10. Human Resource Planning: Definition, Objectives, And Steps

    Human resource planning (or HRP for short) is the ongoing process of systematically planning ahead to optimize and maximize your business's most valuable asset — high-quality employees.

  11. Strategic Human Resource Management (2024 Guide)

    Why Strategic Human Resources Is Important 5 Steps to Strategic Human Resources Bottom Line Frequently Asked Questions (FAQs) Strategic human resource management (SHRM) is a process...

  12. Why HR Is Key To Executive Success: How The Human Resources ...

    Here are five key reasons why HR is essential to organizational success and how leveraging its full potential can impact your business in a positive way. 1. Attracting And Retaining Top Talent ...

  13. Human Resource Planning: Meaning, Importance And Key Steps

    You can use the following steps in your human resource planning to develop effective business strategies: 1. Analysing the business objectives of your company. By analysing your company's business objectives, you would be able to determine the type and amount of work you require to do. For instance, you require to set and achieve work goals in ...

  14. Why Is Human Resource Planning Important?

    HR planning, which is also known as workforce planning, helps organizations recruit, retain, and optimize the deployment of people they require to meet strategic business objectives and respond to changes in the market and the general environment.

  15. Human Resource Planning (HRP): Definition, Importance & Process

    Human Resource Planning Process. In any Human Resource Planning model there are three key elements which the management should adhere to: Forecasting recruitment needs: There are a number of ways in forecasting your business needs, to know the exact number of employees required to run the business. Factors to be considered are the economical ...

  16. Critical Importance of Human Resource Planning

    The human resources department has an important function within most businesses. Any business that relies on multiple employees to function stands to benefit from human resource planning.

  17. Importance of Human Resource Planning

    The importance of human resource planning can be studied under the following heads:- 1. Key to Managerial Functions 2. Efficient Utilization 3. Motivation 4. Better Industrial Relations 5. Higher Productivity. Importance of Human Resource Planning or Manpower Planning

  18. Human Resource Planning: Meaning, Objectives & Importance

    It mainly involves four important roles: Analyzing the current supply of employees, forecasting future demand of employees, removing the gap of current supply and future demand of employees by acquiring them in the right number, and focusing on business goals. Importance of Human Resource Planning in the Business organization can be well ...

  19. What Is Human Resources (HR)? Functions, Roles and Common Skills

    Human resources (HR) is a vital piece of any organization. The work HR does lays the foundation for companies to recruit, onboard, develop, advance and ultimately retain employees. From payroll processing to succession planning and more, read how HR works and the areas it covers.

  20. What is the Importance of Human Resource Planning?

    By identifying opportunities for training, career advancement, and skill enhancement, HR planning helps in creating a positive work environment that fosters employee loyalty and reduces turnover.

  21. Human Resource Planning: Definition, Importance, Objectives, Process

    Article shared by: In this article we will discuss about human resource planning. Learn about:- 1. Introduction to Human Resource Planning 2. Meaning of Human Resource Planning 3. Definition 4. Need and Importance 5. Objectives 6. Organisation 7. Factors Affecting 8. Human Resource Planning at Different Levels 9.

  22. Human Resource Planning: Importance, Need And Types

    Several types of human resource planning are required to ensure that the future workforce and its capabilities are compatible with the business strategy. Importance Of Human Resource Planning. When we take stock of the types of human resource planning, the importance of human resource planning also becomes clear. Here is a recap of the value ...

  23. Importance of Human Resource Planning in Organizational Success

    Effective HR planning helps the organization work smoothly and also achieves success in the present times. HR professionals working towards developing HR planning for an organization, assists the organization to manage its staff strategically.

  24. The Importance of Human Resource Planning in Business

    Human Resource Planning (HRP) is a vital process for any business that aims to align its workforce with its strategic objectives.

  25. Why HR Leaders Must Get More Strategic About Payroll

    It has the potential to provide valuable insights for strategic decision-making and, ultimately, impact business outcomes. HR leaders who recognize the importance of payroll as a strategic function can unlock the full potential of their role as a strategic partner, enabling their organizations to stay ahead amid a dynamic marketplace.

  26. 6 work and workplace trends to watch in 2024

    Digital jobs could help to balance skill shortages in higher-income countries, while boosting opportunities for younger workers in lower-income countries: "If managed well, global digital jobs present an opportunity to utilize talent around the world, widening the talent pool available to employers and providing economic growth pathways to countries across the income spectrum."

  27. Facts About Business Administration Bachelor's Degrees

    Human Resources Specialist. Median Annual Salary: $64,240 Projected Job Growth (2022-2032): +6% Job Description: Human resources specialists handle the people-related aspects of organizations ...