UNIT 2 _ TM

Developing HR planning process (using MS-Excel and quantitative tools).

Evaluation of factors affecting HRP,

“HRP is the process by which an organization ensures that it has

right number and kind of people , at the right place , at the right
time, capable of effectively and efficiently completing those task
that will help the organization achieve its overall objectives”.

Meaning
HRP is the process of forecasting an organization’s future
demand for , and supply of , the right type of people in the right
number.
oIt is only after this that the HRM department can initiate
recruitment and selection process.
oHRP is the subsystem in the total organizational planning.
oHRP facilitates the realization of the companies objectives by
providing the right type and right number of personnel.
 IMPORTANCE OF HRP
• Future Personnel Needs
• Part Of Strategic Planning
• Creating Highly Talented Personnel
• International Strategies
• Foundation For Personnel Functions
• Increasing Investment in Human Resources
• Resistance to Change and Move
• Unite the Perspectives of Line and Staff Managers
• Other Benefits
HRP PROCESS
 HRP Process
It involves:
1. Organizational objectives and policies
2. HR needs forecast
3. HR supply forecast
4. HR programming
5. HRP implementation
6. Control and evaluation of program

4
 Organizational objectives and Policies
o HR plan must be derived from organizational objectives.
o Organizational objectives are defined by top management
and the role of HRP is to sub serve the overall objectives by
ensuring availability and utilization of Human resources.
o For instance specific policies need to be formulated
Are vacancies to be filled by promotion
from within hiring from outside?
How to downsize the organization to make it more
competitive?

5
 HR Demand Forecast
• It is the process of estimating the future quantity and quality
of people required
• The basis of the forecast must be the annual budget and
long term corporate plan translated into activity levels for
each functions and department.
• It can help
1. Quantify the job necessary for producing a given number of
goods or offering a given amount of services.
2. Determines what staff mix is desirable in future
3. Prevents shortages of people.

6
 Forecasting Techniques/ Quantitative tools

1.Managerila judgment
2. Ratio Trend Analysis
3. Regression Analysis
4. Work Study Techniques
5. Delphi Techniques
6.Flow Models
7. Others
 Forecasting Technique
• Managerial judgment
• In this manager sit together discuss and arrive at
figure which would be the future demand for the
labor
• The technique may involve a bottom up or a top
down approach
• Ratio trend analysis
• This is the quickest forecasting technique it involves
studying past ratios and forecasting future ratios

8
 Forecasting Technique
• Delphi Technique
• It is a method of forecasting personnel needs .
• It is solicits estimates of personnel needs from a group of
experts usually managers .
• The HRP experts acts as intermediaries, summarize the
various responses and reports the findings back to the
experts
• Work study technique
• It can be used when it is possible to apply work
measurement to calculate the length of operations and
the amount of labor required
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 HR Supply Forecast
 This is the next logical step for the management to determine
whether it will be able to procure the required number of
people and sources for such procurement. This information is
provided by supply forecasting .
• The supply analysis covers
 Existing human resources
 Internal sources of supply
 External sources of supply

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 HR Programming
• Once an organizations personnel demand and supply are
forecast, the two must be reconciled or balanced in order
that vacancies can be filled by the right employees at the
right time

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 HR Plan Implementation
• Implementation requires converting an HR plan into action .
• A series of actions programs are initiated as a part of HR plan
implementation. Some such programs are:
 Recruitment selection and placement
 Training and development
 Retaining and redeployment
 Retention plan
 Succession plan

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 Evaluation and Control

 It represents fifth and final phase in HRP process.

 HR plan should include budgets , targets and standards.
 It should also clarify responsibility for implementation and
control, and establish reporting procedures which will enable
achievements to be monitored against the plan.

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 Limiting Factors
Manpower planning is not always successful, there are some constraints :
Accuracy of forecast:
 Inaccuracy increases when departmental forecasts are merely
prepared without critical review
Identity crisis:
 Many human resource specialists and the managers do not
understand the whole manpower planning process , so there is
generally an identity crisis.
Support of top Management:
 In the absence of top management support and commitment , it
would not be possible to ensure the necessary resources, cooperation
and support for the success of manpower planning.
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 Resource Planning Template Excel
• You can download the Excel Resource Planning Template and Enter the
Data in the Data Sheet.Resource
• Allocation Template Excel Microsoft Spreadsheet is easy to use and
manage your team resource.
• You can resource utilization template excel is one of the useful resource
planning tools excel for resource planning in Excel.
• You can go to Reports Tab to see the Resource Bandwidth by each month.
• Download the Project Resource Planning Template in Excel Format
• Click on the Resource Report button in the Details sheet
• Click on the ‘Data Entry’ button in the Report Sheet to Enter New Records
• You can change the default format of the template using the built-in tool
in Excel
• This Template will work on Excel 2007, 2010,2013,2016.
• This templates also compatible with Mac with Office 2011 or 2016.
Fields in Project Resource Planning Template Data sheet
• We have captured minimum required fields in the Resource Data Sheet. You can
add more dimensions if required.
• ID: Resource Activity Serial Number

• Resource Name: Name of the Resource

• Project Name: Name of the Project allocated

• Activity: Activity Description assigned to the Resource

• Start Date: Date to start working on the task

• End Date: Due Date to complete the task

• Hours/Day: Hours required per day to complete the activity.

 Project Resource Planning Template Report

• Report in Resource Planner Excel and Heat Map in Project

Resource Planning Template helps to understand the
bandwidth used and available for each resource of your team.

• You can select month and year from the drop-down list and
select the required items. This will automatically populate the
sum of hours by person per each day of the month.
Resource Name in the Left side is the list of name of your team
Month and Year Data Bars: This bar chart represents the overall
bandwidth utilization of your team members for the entire
month
White Color represents No Hours allocated on the date, i.e;
Resource is completely Free
Light Orange Pink Color represents fewer hours utilized
Dark Pink Color represents More hours utilized
Starbucks: Serving Up Human Resources Planning Derived from Mission and
Strategy
Starbucks, the world’s largest coffee chain, recorded $21.3 billion in sales for
2016, ranking it at 131 on the 2017 Fortune 500.
The company projects that it will reach $35 billion in sales by 2021 by opening
12,000 stores over the next five years, the majority of them in China.

How do you plan human resources with such a massive growth goal? For
Starbucks, their approach remains the same no matter where stores are located.
Their human resource planning flows from its organizational strategy and its
brand.

People are Starbucks’ primary resource, as their mission clearly states: "Our
mission: to inspire and nurture the human spirit – one person, one cup, and one
neighborhood at a time."
An important aspect of Starbucks’ human resource planning is its selection
process, which uses specific interview techniques to determine if potential
employees are ‘on brand’ and evaluate their skill sets.
The company identifies capable company leaders and hires them using a program
called "New Partner Orientation and Immersion."

This human resources planning approach has led to the lowest employee turnover
rate among quick-service restaurants. While most quick-serve restaurants range
between 150 to 400 percent turnover, Starbucks’ rate is 65 percent.

The company is always on the lookout for new employee perks and focuses
energy on employee training, which includes an elaborate online portal that offers
an instruction program imparting the necessary job knowledge.
 HR planning process (using MS-Excel and quantitative
tools).
Basic process of Human Resource Planning (HRP) is not only to compare present
human resources to future needs but also to identify skill and competency gaps.
Competency gap analysis helps to develop required competency in line with the
organisational mission, vision and strategic objectives.

HRP provides strategic basis for taking HR decisions, anticipating change. Of-late
HRP has
become an important enterprise-wide strategic function not only to achieve goals
and objectives but also to sustain present level in organisations. Globally, skili
shortages, competency gap, redundancies, downsizing, rightsizing are the major
issues in today's organisations.

The biggest problem for manpower or human resource redundancy lies with
inadequate Human .Resource Planning (HRP). To achieve any goal, manpower
requirement needs to be assessed, located and harnessed. HRP is not mere
assessment of number of men required. An organization also has to categorize men
as per their knowledge and skills and so also to ensure their b"alanced allocation.
• Workforce planning tools are instruments that help analyze
current capabilities and future needs for the employee
population.
• These tools are data-driven instruments that help identify the
gap between current capabilities of the workforce and its
future needs. In addition, they help you come up with ways to
fill this gap.
• five strategic workforce planning tools are :
• Strategic workforce planning map
• 9-Box grid
• HR dashboarding
• Compensation and benefits analysis
• Scenario planning
1. Strategic workforce planning map
• The first workforce planning tool is the workforce map. It shows how workforce planning
activities align with the bigger picture, like the organizational strategy. The beauty of
workforce planning is that it offers tools to add value to the latter.
• The model below shows this very clearly. You don’t start with strategic workforce planning
(SWP, which is step 3). No, strategic workforce planning is the result of organizational
strategy (step 2).
• The board of directors sets a strategy for the organization. This strategy is not made up – it is
derived from three key factors:
• What’s happening in the market? E.g. trends in demand and supply.
• What products and/or services are we already producing?
• What is the competition doing? You don’t want to just copy your competition. No, you want
to outsmart them through process, product or business model innovation.
• These factors influence the strategy that the board sets. This forms the beginning point of
strategic workforce planning as it helps us determine where the organization wants to go in
the next 3-5 years. This is the target.
• The next step is to identify where we are now. This is step 3 in the model: the quality and the
quantity of the workforce. An excellent tool to do this is the performance-potential matrix
that we will talk about next.
• Based on these insights, the HR strategy is created. This strategy is executed in all the
different functional HR areas, like recruitment, performance management, rewards &
promotions, etc.
• 2. 9-Box grid
• The performance-potential matrix, also called 9-box grid or HR3P matrix,
maps employees’ performance and potential in one model.
• As you can see, the matrix maps employees in different
categories, ranging from “talent risk”, which are low potential
and low performance, all the way to “consistent stars”, who
are high potential and high performance.

• This is just one of the models (source) out there that visualize
performance and potential. An advantage of the model is that
it’s easy to understand.

• However, this is also a disadvantage because this lower

complexity has a reduced usability. Take the following matrix
as an example. This is not a 3×3 9-box grid, but a 4×4.
• This model divides potential and performance in four categories. Using these categories,
employees can be managed very effectively. Let me give you an example.
• Phase 1: Yellow. When new employees join the company, they don’t perform optimally yet
but have a lot of growth potential. They fall in the left bottom corner of the model.
• Effective talent management policies are training and coaching, performance based pay
(PBP) to increase productivity and a growth in base salary to retain them (they are your
future stars).
• Phase 2: Dark green. After working for a year or two, these employees perform well and are
still bursting with potential. In this case, they are in the right bottom corner of the model. In
order to capitalize on their potential, they need more learning and development, challenging
assignments that help them grow and a salary growth to retain them.
• Phase 3: Light green. After a few promotions, these employees may start to hit their ceiling.
They are at full potential but are performing excellently. You want to further develop the
competencies they need for their roles and focus on performance based pay so they stay
focuses. You don’t want to grow their salary much further as that may become a burden
over time.
• Phase 4: Red. In the final phase, these employees may become disengaged and performance
may lower (left top corner).In this case, a development plan to get their performance back
on track is the best solution. Salary shouldn’t increase for these people as you don’t
necessarily want to retain them.
• To create such a four-by-four, you need to assess people on their performance and potential.
The performance-potential matrix is thus a great strategic workforce planning tool, not only
to assess talent but also to manage it.
3. HR Dash boarding

• A third workforce planning tool that a lot of companies are

actively investing in, is the HR dashboard. The HR dashboard
is a very effective instrument to show current workforce
capabilities.
• On a conceptual level, the dashboard is filled with
information from different source systems, like a payroll
system, applicant tracking system, and other Human
Resources Information Systems. Based on this data, metrics
are calculated and displayed.
• The model below shows this process. Systems are extracted,
data is transferred and loaded into a data lake or data
warehouse. Reporting software uses this data to report on it.
• Not all organizations have fully automated this process.
If there’s no data warehouse present, data can be
extracted from different systems and aggregated
manually. This is slower, manual reporting.
• However, the goal is always the same: to create an
overview of the current status of the workforce. This can
be in terms of a workforce dashboard, diversity map,
performance dashboard, etc.
• On a more practical level, check out our dedicated
article about
what an HR dashboard is and it most important metrics .
This article has multiple templates and metrics that can
be used in a dashboard. An example of an interactive
dashboard is included below.
• 4. Compensation & benefit analysis
• it does provide a number of great opportunities for data analysis. For two
reasons.
• First of all, compensation and benefit data is highly structured and accurate.
Secondly, it is directly related to a financial outcome and thus bottom line
performance.
• The simplest analysis has two elements:Set an internal pay benchmark and group
people in (severly) overpaid and (severly) underpaid categories
• Retrieve performance data and categorize people in over performing or
underperforming
• You want your over performing people to be overpaid and your underperforming
people to be underpaid. If there’s a difference in the two you either run the risk
of losing top performers because of underpay or not losing bad performers
because of overpay. The latter is referred to as the golden cage.
• This data can be enriched by labor market statistics. You can use payment
benchmarks from outside your organization to adjust for internal payment
discrepancies.
• Use job market information to control for external demand and projected
demand for certain jobs. These kind of numbers are available for any industry and
• 5. Scenario planning
• Scenario planning is the ultimate workforce planning tool. It helps to anticipate
multiple possible futures so that you won’t be caught off-guard. In the words of
futurist Peter Schwartz: “if you haven’t thought about it, you’re unlikely to see
it in time”.
• In scenario planning, you imagine different potential futures that have a severe
impact on your business and that you will be unlikely to see coming. These
scenarios can involve technological innovation, new legislation, natural
disasters, changes in attitudes of the general public, etc.
• By thinking about these scenarios, analyzing them and describing how they will
make an impact on day to day business, you can develop a strategy for unlikely
but impactful events.
• One of the early pioneers in this approach was Shell. According to Schwartz´s
book the art of the long view, Shell used scenario planning to develop
strategies for dealing with the 1973 energy crisis, the 1979 oil price shock, the
fall of the Soviet Union, and the increasing pressure on companies to address
environmental issues.
• If you think about the figure that we started with, scenario planning is really
about imagining the future – or imagining multiple possible futures. For a full
overview of how to do a scenario planning exercise, check appendix A in
• How does scenario planning work as a workforce planning
tool?
• First of all, you want to analyze the focal issue of concern for
the workforce. This is the issue that the planning exercise
centers on.
• Secondly, you want to identify driving forces of change.
These can be external and internal. Examples are the specific
demographic driver, environmental drivers, sociopolitical
drivers, market drivers, and so on. The challenge is to make
these drivers as specific as possible. For example, don’t use
‘global warming’ as a driver but define it as the increasing of
drought periods in California (or any specific region).
• Thirdly, you want to rank these specific driving forces on their importance and
uncertainty. Importance refers to the impact the driver will make on the workforce.
Uncertainty refers to the uncertainty of your estimation. This step is required to
select the most relevant and divergent conditions.
• Next, the two most uncertain and important driving forces are selected and two
polar opposites are selected. These are mapped on a 2×2 grid.
• This creates four distinctly different and impactful workforce challenges. For each
of these scenarios, a name and story are created related to how they will play out
and impact the workforce. In the final step, strategies are created to resolve these
challenges.
• This exercise is not something you do in half an hour. It usually takes a team at least
half a day up to a few days, depending on the level of complexity. However, it can
be a very useful one!
• You have now had a description of 5 essential workforce planning tools. They are
essential tools for any HR professional working in a larger organization. Most of
these tools are described in much more detail in our HR analytics course. If you
want to learn more about it and also practically apply them to real employee data,
check the course page!
4. Compensation & benefit analysis
• It does provide a number of great opportunities for data analysis. For two reasons.
First of all, compensation and benefit data is highly structured and accurate.
Secondly, it is directly related to a financial outcome and thus bottom line
performance.
• The simplest analysis has two elements:
• Set an internal pay benchmark and group people in (severely) overpaid and
(severely) underpaid categories
• Retrieve performance data and categorize people in over performing or
underperforming
• You want your over performing people to be overpaid and your underperforming
people to be underpaid. If there’s a difference in the two you either run the risk of
losing top performers because of underpay or not losing bad performers because
of overpay. The latter is referred to as the golden cage.
• This data can be enriched by labor market statistics. You can use payment
benchmarks from outside your organization to adjust for internal payment
discrepancies.
• You can also use job market information to control for external demand and
projected demand for certain jobs. These kind of numbers are available for any
industry and can be very beneficial in anticipating and adjusting to future
workforce needs.
• 5. Scenario planning
• Scenario planning is the ultimate workforce planning tool. It helps to anticipate
multiple possible futures so that you won’t be caught off-guard. In the words of
futurist Peter Schwartz: “if you haven’t thought about it, you’re unlikely to see it in
time”.
• In scenario planning, you imagine different potential futures that have a severe
impact on your business and that you will be unlikely to see coming. These
scenarios can involve technological innovation, new legislation, natural disasters,
changes in attitudes of the general public, etc.
• By thinking about these scenarios, analyzing them and describing how they will
make an impact on day to day business, you can develop a strategy for unlikely but
impactful events.
• One of the early pioneers in this approach was Shell. According to Schwartz´s book
the art of the long view, Shell used scenario planning to develop strategies for
dealing with the 1973 energy crisis, the 1979 oil price shock, the fall of the Soviet
Union, and the increasing pressure on companies to address environmental issues.
• If you think about the figure that we started with, scenario planning is really about
imagining the future – or imagining multiple possible futures. For a full overview of
how to do a scenario planning exercise, check appendix A in this document. I
included a summarized version below.
• How does scenario planning work as a workforce planning tool?
• First of all, you want to analyze the focal issue of concern for the workforce.
This is the issue that the planning exercise centers on.
• Secondly, you want to identify driving forces of change. These can be external
and internal. Examples are the specific demographic driver, environmental
drivers, sociopolitical drivers, market drivers, and so on. The challenge is to
make these drivers as specific as possible. For example, don’t use ‘global
warming’ as a driver but define it as the increasing of drought periods in
California (or any specific region).
• Thirdly, you want to rank these specific driving forces on their importance and
uncertainty. Importance refers to the impact the driver will make on the
workforce. Uncertainty refers to the uncertainty of your estimation. This step is
required to select the most relevant and divergent conditions.
• Next, the two most uncertain and important driving forces are selected and
two polar opposites are selected. These are mapped on a 2×2 grid.
• This creates four distinctly different and impactful workforce challenges. For
each of these scenarios, a name and story are created related to how they will
play out and impact the workforce. In the final step, strategies are created to
resolve these challenges.