Human resources planning (HRP) is the process whereby businesses identify their future human resources (HR) needs to support daily operations and achieve their strategic goals. Businesses face a number of issues that are changing the nature of the workplace and making HRP essential. These issues include skills shortages in certain professions, such as health care and information technology; an aging workforce; a struggling economy; increased competition; and compliance with a variety of federal and state regulations.
HRP takes place at both the macro and micro levels. At the macro level, HRP focuses on aligning human resources administration with the organization’s mission and overall strategic plan. Often called HR strategic planning or organizational design and development, macro HRP examines employee management policies and procedures and their effect on human resources management. Objectives may affect employee recruitment, performance evaluation, compensation and benefits, employment law compliance, labor relations and workplace safety.
Macro-level HRP drives micro-level HRP, which develops and implements the tactics needed to help the organization achieve its strategic objectives. Micro HRP tactics ensure that the business has the appropriate number of employees with the appropriate mix of knowledge, skills and abilities in the proper areas or departments.
Micro-level HRP uses three basic tools – demand forecasting, manpower supply analysis and manpower planning. Demand forecasting uses historical and current operations' data to identify future needs. It involves analyzing the current workforce to identify potential shortages and surpluses in various job categories. Manpower supply analysis involves scanning the current labor market to determine the workforce available and analyzing any gaps between the kind of workforce needed with what is available. Manpower planning uses this information to set priorities and develop plans for employee recruitment, retention and development, and workforce reductions, if necessary.
The competency-based management model is used to develop mirco-level HRP tactics that match employee skills and knowledge to the organization’s mission and strategic objectives, The goal is to ensure that employees have the mix of experience, skills and education to increase productivity over time and contain costs. Competency-based management matches the people with the right skills to the right jobs and then further develops their skills to build employee commitment to the business. In comparing macro- with micro-level HRP, a macro strategic goal would be to improve employee performance; a micro tactic for this goal would be to identify gaps between requirements and current skills, and then plan and implement training or skills-development programs to bridge those gaps.