Blog

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:

1. Future Personnel Needs
2. Part of Strategic Planning
3. Creating Highly Talented Personnel
4. International Strategies
5. Foundation for Personnel Functions
6. Increasing Investments in Human Resources
7. Resistance to Change
8. Uniting the Viewpoint of Line and Staff Managers
9. Succession Planning
10. Other Benefits

Future Personnel Needs

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.

Part of Strategic 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.

Creating Highly Talented Personnel

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.

International Strategies

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.

Foundation for Personnel Functions

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.

Increasing Investments in Human Resources

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.

Resistance to Change

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.

Uniting the Viewpoint of Line and Staff Managers

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.

Succession Planning

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.

Other Benefits

These are other benefits of human resource planning:

1. HRP helps in judging the effectiveness of manpower policies and programs of management.
   
2. It develops awareness of the effective utilization of human resources for the overall development of the organization.
   
3. It facilitates the selection and training of employees with adequate knowledge, experience, and aptitudes so as to carry on and achieve the organizational objectives.
   
4. 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