Steps in the Human Resource Planning Process

by Alfred Sarkissian; Updated September 26, 2017
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Designing the Management System

A crosscutting issue in human resource planning is to ensure that a proper system is in place to handle the process. The overall aim of this system is to manage human resources in line with organizational goals. The system covers human resource plans, policies, procedures and best practices. For example, it should track emerging human resource management trends -- such as outsourcing certain non-core functions, adopting flexible work practices and the increased use of information technology -- and, if appropriate, implement them.

Environmental Analysis

The first step in the human resource planning process is to understand the context of human resource management. Human resource mangers should understand both internal and external environments. Data on external environments includes the general status of the economy, industry, technology and competition; labor market regulations and trends; unemployment rate; skills available; and the age and gender distribution of the labor force. Internal data required include short- and long-term organizational plans and strategies and the current status of the organization’s human resources.

Forecasting Human Resource Demand

The aim of forecasting is to determine the number and type of employees needed in the future. Forecasting should consider the past and the present requirements as well as future organizational directions. Bottom-up forecasting is one of the methods used to estimate future human resource needs by gathering human resource needs of various organizational units.

Analyzing Supply

Organizations can hire personnel from internal and external sources. The skill inventories method is one of the techniques used to keep track of internal supply. Skill inventories are manual or computerized systems that keep records of employee experience, education and special skills. A forecast of the supply of employees projected to join the organization from outside sources, given current recruitment activities, is also necessary.

Reconciliation and Planning

The final step in human resource planning is developing action plans based on the gathered data, analysis and available alternatives. The key issue is that the plans should be acceptable to both top management and employees. Plans should be prioritized and their key players and barriers to success identified. Some of these plans include employee utilization plan, appraisal plan, training and management development plan and human resource supply plan.

About the Author

Alfred Sarkissian holds a master’s degree in industrial management. With experience in business and public policy, he has covered intellectual property rights, industrial policy and technology policy for various publications.

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