Human resource planning (HRP) is an "information decision making process designed to ensure that enough competent people with appropriate skills are available to perform jobs where and when they will be needed" (Kohl). It is a vital function that includes and supports the corporate strategy, and then deploys the necessary human capital where it is called for in the organization by the strategy.
HRP includes the activities like Recruiting, performance appraisal, training and development. Recruiting can be done in planned in two ways- outsourcing or internal recruitment. Internal recruitment can be taken through direct placements from outside or through performance appraisal of exiting staff. Performance appraisals stresses on the skills that will be required for employees to move into higher level positions via promotion, where as training and development efforts need to be designed to provide these skills. 'However HRP during the 1960s and 1970s was about getting the right people at the right time. But in 1980s and 1990s HRP was about managing downsizing and redundancy. But at the beginning of the 21st century HRP appears to be more and more orientated towards dealing with the skill shortages faced by large organizations.' (James)
Corporate strategic plans can only be achieved when the organization is staffed with the right kind and number human resources at the right time to offer the necessary skills, knowledge, abilities according to the planned task. Successful planning and handling of Human resource needs can become a competitive advantage or disadvantage to the organization. Having excessive or too few employees create problems for organizations.
In general organizations don't tend to keep human resources on bench for three reasons. Human resources are costly; Productive work cannot be performed with unplanned resources; finally non utilization of productive resources results in poor economy, (who other wise would have been engaged in more productive work). On the other side, shortage of Human resource is also not a desirable Practice. For example, a supermarket store during the promotional scheme day requires more sales people than the other days. But when the necessity is wrongly estimated or neglected, it may also result in loss of employee efficiency due to heavy customer service demand. Customers that are waiting in long lines may turn away from the store taking their business elsewhere. Such problems can be reduced or eliminated through effective human resource planning. Also during the cases of divestment practice of unprofitable factories, HRP provides the exact guidelines on whether to divert the staff to the existing factory or to retrench them completely.
As Rothwell (1995) suggests, 'Apart from isolated examples, there has been little research evidence of increased use or of its success. Being inadequate and not matching with other planning systems and lack of structured supporting system results in the failure of human resource planning efforts. There are different perceptions on the purpose of HRP; others have noted: Some perceive it as manpower planning primarily in terms of budgeting to control labor costs; and to other it is a management development technique; and for some other organizations it is a process of HR back ups and replacements for current employees; and also it is perceived as human resources informational system