Definition of Human Resource Planning

Human resource planning is essential to managing the flow of talent.

A human resource (HR) department carries on a number of different functions, all of which are related to a company's employees. This can include recruiting talent, hiring workers, finding candidates for promotions and keeping tabs on future potential hires. The department's role in securing employees for a company is called human resource planning.

Definition

According to R. Wayne Mondy's in "Human Resource Management," human resource planning is the systematic process of matching the internal and external supply of candidates with job openings that a company anticipates over a certain period of time. Put simply, human resource planning is keeping an up-to-date compilation of candidates inside and outside the company for future positions.

Forecasting

In order to carry out human resources planning effectively, HR managers and specialists must have the ability to forecast accurately, otherwise they will not know what jobs will open and who will be best to fill them. Obviously not every qualified candidate can be hired immediately, but HR workers must be able to organize employees and future job openings to keep tabs on top talent, especially in a competitive marketplace in which their skills will likely be in demand. There are two main components of human resource planning forecasting: requirements forecast and availability forecast.

Requirements Forecast

Requirements forecasting is the process of human resource planning in which an HR specialist determines the number, skill and location of employees a business will likely need in the future to meet its goals.

Availability Forecast

Availability forecasting is the process of determining whether a company will be able to secure the employees with the skills it needs to meet its goals, and what sources the organization will draw upon for these workers.

Forecasting in Practice

Once a company knows the number and type of workers it needs, and how likely it is to be able to hire them, it can proactively work to secure candidates for future job openings. If demand is roughly equal to supply, a company does not need to take any action. If supply exceeds demand, an organization may want to consider downsizing, restricting hiring or instituting early retirement. (If it does not take action, it will spend heavily to retain too much talent, or involuntarily lose valuable workers by not compensating them.) Conversely, if there is a tight supply of talent, a company should step up its recruitment and selection process to attract the brightest in the field away from competitors.

Since the market is always in flux and company plans change, HR planning and forecasting must be a constant process, keeping up to date with internal changes (promotions, retirements) and external forces, such as a surplus of workers due to high unemployment.

References

• "Human Resource Management"; R. Wayne Mondy; 2008.