Human Resource Planning: Employee Demand & Supply

It is a systematic process of evaluating the human resource needs of an organization and thereafter making the appropriate human resource allocation based on their skills and competence as required by the firm (Stone, 2009). It is the development of a plan aimed at matching the size and skills of the available workforce to the needs of an organization (BNET Business Dictionary, n.d). Human resource planning is concerned with demand and supply of employees. The human resource office makes forecasts of the needs of the firm and allocates the right number of employees to perform the right task at the right time. Human resource planning evaluates the personnel requirement of the company against the qualified personnel available for the company. It enables the firm to recruit, retain, and allocate personnel optimally in order to meet the objectives of the firm and to respond appropriately to the external changes of the firm.

Steps in human resource planning

The first step in human resource planning involves the taking stock of the available skills of the existing workforce (BNET Business Dictionary, n.d). This enables the firm to identify any existing gaps in skills which could impair the firm’s productivity. The future needs of the firm in terms of the number and the type of employees are considered here. In doing this one must not only consider the present but also the past requirements of the firm. The future requirement of the company is also critical in deciding the human resource demand of the company. All this is made possible by performing an analysis of the human resource requirements of various units of the organization. A lengthy past experience is an asset in forecasting the future human capital requirement of the firm. It enhances ones accuracy and since it is based on the firms past growth, one can be able to accurately predict the future demand of human resource. For example based on ones past experience, one might forecast a vibrant future for the firm that would call for additional human capital. Thus it can be reliably concluded that a firm’s performance history and an individual’s experience in that particular industry can be relied upon to provide a guideline into the future demand of the human resource.

The second step involves taking stock of the firm’s human resource supply. This is made a reality by taking an inventory of the firm’s human capital resource (BNET Business Dictionary, n.d). The human resource department considers the available size of workforce alongside their skills against the firm’s human resource needs and identifies the gaps in supply of both labor and skill. For example, if the company is currently run by 20 employees but the current operational requirements demand 30 workers, then there is a shortage in supply of 10 workers. However, this must take into consideration other underlying human resource factors such as the rate of turnover of employees. In addition, one must be able to identify the gap in skills so as to determine the type of skills to be sourced out. The inventory of existing skills must first be put into the equation as one tries to evaluate the additional skills required by the firm (Anon, 2006).

The last step in human resource planning is the development of a comprehensive action plan (BNET Business Dictionary, n.d). This helps to chart out the way forward in integration of new human resource into the firm. It involves preparation of budgets for the future workforce, compensations and training of the existing workforce up to the intended standards. One should also bear in mind the type of people they want to hire and the time lines for hiring new staff. The type and date of job advertisement and the day of the interview for the new staff should be included in this stage. These plans should be reconciled in a manner that makes them acceptable to both the employees and management.

Benefits of HRP for organizations

Human resource planning enables a firm to match its organizational goals and objectives with the human resource need (Stone, 2009). For a firm to achieve a certain level of performance, it requires a certain level of skill and human resource input. A cost minimizing and benefit maximizing approach of human resource planning will involve acquisition and use of skills and human resource that optimizes the intended output of the firm. If a firm has excess supply of labor, it will often find itself faced with the problem of diminishing marginal returns for each additional unit of labor. Thus it needs to perform a review of its policies regarding human resource which include retrenchment, permanent employment, and outsourcing of labor. Similarly a firm with a huge amount of unskilled labor will experience problems in implementing new technologies and adopting new management standards.

Human resource planning also ensures effectiveness and efficiency in allocation of the available labor (Stone, 2009). This comes with a host of benefits arising in savings in labor costs. Savings in wages are realized since the labor is optimally allocated to perform their specific task based on the need analysis. As a result, the appropriate number of employees are employed which is a significant boost to efficiency in production. Similarly, a high level of productivity is assured since the right number of employees with the right skills is employed at the right time which helps the firm to optimize its output. A high marginal productivity per each unit of labor is achieved leading to better performance of the firm. In addition, the firm is able to tap and retain talented employees. Retention of employees ensures that the morale and motivation of employees remains high, disruption of production minimized and cost of recruitment and training of new staff brought to the minimum.

Human resource is also important in that it guarantees the availability of the right pool of capital with right knowledge and skills in the future which makes it possible to bring stability of production in the future (Anon, 2006). This also helps to assure the firm of a predictable performance in the future thus becoming an important strategic tool of organizational planning.

Formulating a HRP plan for the New School of Business – University College

In formulating a working human resource plan for the New School of Business-University College, an internal analysis of the human resource requirement in the college is essential. This will be performed by taking stock of the existing number of lecturers and the skills they possess. These are to be measured against the student population and the number of student in each specialty to determine the lecturer student ratio. This exercise will help in identifying any existing gaps in skills and personnel. For example, a comprehensive analysis of gaps in skills and personnel in each department ought to be undertaken to identify any cases of understaffing or overstaffing. This is because some of the personnel in overstaffed areas can easily be reallocated to other departments where there is understaffing without necessarily recruiting new staff. This helps to bring efficiency and effectiveness in delivery of service to the student through the knowledge of past and the present staffing needs of the college which helps to make a forecast of the future personnel requirement of the college.

The next step in formulating the plan would involve evaluation of the number of available lecturers alongside their skills. This is measured against the human resource requirements of the firm. Gaps in supply of both labor and skills are identified in the process and taken note of. The exercise helps in forecasting the future needs of the lecturers given the current student population and the rate of growth of the students’ numbers. Here it is also vital to consider the rate of turnover of lecturers so as to increase accuracy of the recruitment of new staff into the college.

An action plan has to be developed to chart the way forward in bringing new personnel on board. This involves setting a comprehensive time frame for recruitment, training, and integration of the new lecturers into the organization. The process also involves budgeting of the future needs of the new workforce including cost of training and compensation. Existing personnel also need some budgetary allocations for retraining purpose so as to uplift their quality standards to the expected level. The planning should be inclusive of the type, cost, and content of advertisement for the positions alongside the intended date of the interviews.

In planning, the expected future position of the college must be taken into consideration for one to efficiently perform the allocation of the personnel. For example, if the college is hoping to experience a major expansion in the recent future, then the staff to be recruited must be commensurate with the size of expansion so as not to compromise with the quality standards. This means that best management practices must be maintained along the expansionary objective. These include Total Quality Management (TQM) and other key performance and quality evaluation measures. Use of technology can also influence the human resource planning since expansion of capacity does not necessarily call for significant increase in personnel. Use of the current state of art technology such as virtualization in education reduces the need for large amount of human resource deployment in lecturing and management.

Estimating the internal supply of academic staff in each department

To estimate the internal supply of staff in each department we can use either quantitative or qualitative approaches (Stone, 2009). One of the qualitative approaches used the skill inventory approach which profiles the academic staff in form of age, skills and qualifications, experience, the level of job, their pay and their level of performance. It helps to track shortages and surpluses in human resource thus helping to strike a balance between the supply and demand of academic staff subject to the college’s management objectives. This profiling of the basic information helps the human resource manager to identify the right academic staff for the right job, identify gaps in skills and to evaluate sustainable recruitment, criteria for selection and training needs of the academic staff.

Detailed skill inventories kept by the human resource department also assist the human resource office to single out those employees with high potential, requisite skills, and the relevant experience as demanded by a certain position in the college (Stone, 2009). This ensures that the level and type of training offered to each specific member of staff is tailor made to suite the staff’s personal needs. The skills inventory provides an effective tool of filling vacant positions in the institutions through internal promotions. This helps to motivate the existing members of the academic staff by ensuring that they are not left out during recruitment of higher positions.

Replacement charts can also be use to estimate the internal supply needs of each department (Stone, 2009). This method uses the skill inventories by producing a summary of the information in pictorial form. Using these pictorial forms the human resource manager can easily identify the present holders of specific positions and potential replacements for the available positions within the institutions. If well designed and regularly updated, replacement charts can aid the departmental heads and human resource management in identifying potential organizational bottlenecks in planning for successions.

Predicting the number of academic staff that will be needed

Just like estimation of the supply, predication of the future demand of the academic staff can be done both qualitatively and quantitatively. Quantitatively, one can for example use the trend projection analysis to carry out the prediction (Stone, 2009). Based on the past and present trends, one can be able to predict how many personnel each department will requite in future. An increasing demand for a certain course can for example be an indicator of an increased demand for it by the labor market and vice versa. Such an upward trend in organizational demand for the course prompts students to lean towards the specialty leading to an increased enrollment in the department. If the trends in the market show a prolonged demand for the course, then more personnel will be required in the department in future. The trend projection approach assumes a continuum of trends from the past into the future. This is a quick and relatively affordable method since most of the departments retain historical data which can be analyzed to make future projections.

For qualitative projection, one can seek the expert opinion to analyze the future human resource needs of the various departments (Stone, 2009). This can be performed by the head of department in each organizational unit. Based on this familiarity with the human resource needs of his/her department, he can make a future projection of the number of academic staff that will be required in his department. This would be based on his evaluation of performance of his staff and the ease of getting promotions and development of their careers. The expert opinion can thus be said to be a faster, simpler, and affordable approach of making projections.

The Delphi technique is another approach that can be used to make future predication of human resource needs (Stone, 2009). In this technique, the departmental heads of the college are anonymously requested by the human resource manager to make their independent prediction of the future academic staff requirements. The human resource department analyzes the results and then sends them back to the departmental, heads for revision of their estimates alongside other additional questions confidentially. This continues until some form of consensus is achieved which is now adopted by the human resource department.

The Delphi technique aims at incorporating expert opinions while ensuring objectivity. This is particular useful in academic institutions where estimation of the human resource needs by departments is difficult due to he frequent changes experienced in the respective departments. These changes often arise from changes in tastes and preferences of the students and changes in organizational demand of professionals in the labor market. It can also be practical where some departments are located in remote locations or where some departmental heads wish to remain anonymous.

Stakeholders involved in human resource planning

The major stakeholders involved in human resource planning in the college are the academic staff, the departmental heads in the college, the human resource management, the students, employers in the job market and the college management. The interest of the academic staff is to meet their lecturing obligations so as to earn their wage. As a result, the human resource management must ensure the personal interest of the staff does not conflict with the objectives of the institutions. It also ensures that quality service is offered to the students who are their customers.

On the other hand the departmental heads and the human resource manager’s main interest is to see to it that the academic staff executes their mandate professionally and prudently. They also ensure that the service offered to the student is satisfactory. They are also interested in ensuring that a suitable working environment is maintained at the work place in order for the academic staff to efficiently execute their duties. The human resource managers are also interested in maintaining the quality standards in service delivery.

The students on their part are interested in getting the best services in terms of skills from the institutions. They expect to get quality services that will ensure they are marketable in the job market. Employers in the job market complete the chain. Their core interest is to get the right professional skills from the institution. Their expectation is that the students are being nurtured with relevant skills in preparation for the entry into the job market. The employee helps in developing the courses offered by the college.

HRM problems expected to arise in this merger

Stiff competition from other players in the education industry is likely to pose a potential problem in the merger. Competition for students for example might result to an increase in the institution’s operational cost as it strives to improve its management and academic standards in order to attract students and to boost its competitive leverage in the industry. This problem can be solved by boosting the customer care relations to ensure quality service is offered to the students. This would also be vital in ensuring that prompt response to customer inquiries is offered. The academic staffs members are forced to undergo frequent in house trainings such as pedagogy classes to boost quality of learning. This is time consuming and strenuous to the human resource management. The training process can be eased by incorporating information technology in training of staff.

There is also competition for skilled professionals which is also likely to impair the recruitment process by the college. Turn over of employees due to poaching by other institutions might cause frequent disruptions thus impacting negatively on the service delivery. Replacement of new employees is likely to increase the cost of operations and also de-motivate the existing staff besides causing a strain to the human resource management and the departmental heads that train and orient the new staff. The problem of poaching can be solved by competitively compensating the staff members which reduces staff departures. Creating a good working environment for the employees is also important as it increases demand by job seekers. Job promotions, recognition, and implementation of a performance based reward system also motivate the staff and increase the rate of retention.


Anon. (2006) Human resource planning steps in your business plan, More Business, [Online]. Khera Communications, Inc. Web.

BNET Business Dictionary. Business Definition for: Human Resource Planning, BNET, [Online]. CBS Interactive Inc. Web.

Stone, R. (2009) Human resource planning in Human Resource Management, 6th edn, Wiley, Australia.

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