Factors Affecting Human Resource Planning (HRP)
There are various factors, both internal and external, which affect HR planning.
These factors are as follows:
1. Type of Organization
HR planning depends on the type of business. Two things can help you figure out what kind of organisation it is: the type of business it is and how its owners are set up. The organization’s production and operations process is based on its type of business, which in turn affects the number of workers, supervisors, and managers.
In a manufacturing company, for instance, this ratio is likely to be different from that in a service company. Depending on how they are owned, organisations can be divided into two groups: those that make decisions on their own and those that let other entities affect their decisions.
When it comes to HR planning, companies that make their own decisions have a lot of freedom. When it comes to HR planning, organisations that are influenced by other entities have a hard time because those entities have rules about how HR planning should be done. Examples of this include public sector organisations, subsidiaries of multinational corporations, and so on.
Methods that an organisation uses to plan
Methods used by an organisation for planning human resources are related to how it plans for the whole organisation. When it comes to overall planning, different organisations use different methods. There are two ways to look at these approaches: a proactive or reactive approach and a formal or informal approach. In a proactive approach, an organisation thinks ahead about what will happen in the future and bases its strategic decisions on that thought.
Decisions about strategy are made in a reactive way, in response to changes in the environment. An organisation gathers data for the planning process, and some of that data is also used for HR planning. This means that HR planning can be either proactive or reactive.
In the same way, if a company does formal, all-encompassing planning for the year, HR planning will probably be the same. In contrast, if an organisation does its overall planning in a loose, disorganised way, HR planning will also be disorganised, and only a few HR issues will be taken into account.
Plan for the Organization
The organization’s strategy has a big impact on HR planning, since HR planning comes from the organization’s strategy. There are three strategic options for an organisation: stability, growth, and retrenchment. In a stability strategy, the goal is to grow slowly by making the facilities that are already there more productive. In this case, HR planning is more focused on developing current employees and making only a few changes to the staff.
In a growth strategy, the focus is on making more investments, which means hiring more people. Because of this, the company needs thorough HR plans. With a retrenchment strategy, the goal is to lower the amount of business that you do by either scaling back your operations or selling some of your businesses. So, HR planning focuses on cutting down on the number of employees.
Growth Cycle of an Organization
Organizations go through a clear growth cycle that includes birth and infancy, adulthood, maturity, and old age. At each stage of the growth cycle, an organisation has different goals and focuses on different areas of strategy. As a result, HR planning changes too. During the early stages of an organization’s life, its main goals are survival and growth. The strategic focus is on gathering resources, including people, and figuring out what products and markets to target. The HR planning focus is also on gathering people.
At adulthood, the goals of an organisation are to increase both the amount of business it does and the quality of its products by creating niches and differentiating them. Its strategic focus is on growing its market share, coming up with new products, and getting the benefits of its past and present work. Its human resources planning is aimed at improving the skills of individuals, groups, and the organisation as a whole.
At this stage, an organization’s goals are to keep the business stable and help a good cause. The focus of strategy is on keeping the organization’s position stable, and the goal of HR planning is to keep things going the same way they were in the previous stage. In old age, the goal of an organisation is to stay alive. The strategic focus is on getting rid of products or businesses that aren’t profitable, and the HR planning focus is on reducing the size of the workforce.
This is how most organisations grow and change over time. There is no set amount of time to finish each stage. This depends on how an organisation is run. Tata Steel, which was founded in 1907, is still going strong, while many other companies that were founded around the same time have long since gone out of business.
How Uncertain the Environment Is
The environment is dynamic and always changing. The level of environmental uncertainty is based on how fast this change is happening. If things change quickly, there is a lot of uncertainty in the environment, and the assumptions that are used to make an HR plan might not work.
So, HR plans for what to do in case something goes wrong need to be made. This makes sure that there are other HR plans available in case one doesn’t work in the new situation. If there isn’t much uncertainty in the work environment, one HR plan is enough.
Horizon of Time
Planning for HR is affected by how long the plans will last. The more time that has passed, the less certain things are about HR formulation. This is because accurately predicting the future environment is hard, and sometimes even impossible, if the environment changes in strange ways.
As a result, HR plans for the far future are no longer useful. Of course, because of this, most companies make HR plans for five years and short-term HR plans every year. Long-term HR plans are used to make short-term HR plans in this case. To keep their long-term HR plans flexible, many companies make an HR plan every year and change their long-term HR plans every year.
Kind of Information and How Good It Is
This is because HR plans are made from information, so the type and quality of information used affects how well HR plans work. HR planning works if the right kind of high-quality information is available at the right time. In the other case, it doesn’t work very well.
How the human resources market works
The human resource market is made up of skilled and qualified people that businesses can hire to fill open positions. The way the human resource market works affects the number of people who are available with the right skills and abilities. When it comes to the availability of human resources in India, there is a paradox.
On the one hand, there are a lot of people who are qualified to work based on their education. However, because most schools aren’t very good, only a very small percentage of these people can get jobs. This fact must be kept in mind when evaluating the supply of human resources.
Hiring outside help for HRM tasks
Some HRM tasks that are more administrative might be outsourced instead of being done by HRM employees. As more HRM tasks are outsourced, the work of HR planning decreases. When a company outsources HRM tasks, it may be able to focus on more important HR issues during HR planning.