IMPORTANCE OF HUMAN RESOURCE PLANNING

Many organizations fail to recognize the importance of effective Human Resource planning.  Human Resource planning serves as an input to many HR function and activities. Thus failing to do an effective Human Resource planning results in poor performance of whole HR function.  Importance of HR planning can be emphasized from the following points. 

Determining the Number to be Employed:

Human Resource Planning is about determining the number of employees along with the knowledge and skills required to achieve organizational objectives.  Without Human Resource Planning organization have no or little idea about how many people to recruit, how many people to train, whom to promote, how to grouped employees and how to pay them.  Therefore Human Resource Planning is important for organization because it provides useful input into many managerial decisions such as recruitment and selection, training and development, compensation management and careers development.

Importance of Human Resource Planning by Tahir 2012

Retention of Talented Staff:

If organization has more people than required than it has to downsize or reduce the number of employees which effect the motivation and commitment level of remaining staff. Similarly if organization has less people than required, it also increases the burden on the existing staff and thus reduces their commitment. Such situation can result in loss of talented staff. If organization has a proper Human Resource planning system in place, it results in better management and retention of talented staff by guiding organization about adequate number of staff along with right knowledge and skills. 

Managing an Effective Downsizing:

Without proper Human Resource planning organization have no idea of how many people it required. In such situation organization downsize without planning which sometimes results in loss of more talented staff and retention of less talented one. With a good Human Resource planning system in place organization can downsize more effectively; that is to downsize only those employees who are under performing and retaining good performers.

Input to Management Development Program:

Human Resource planning identifies the number and type of managers that an organization requires in future. It also helps organization to identify potential candidates who can be selected for management development. Without proper Human Resource planning, organization might end up with shortage of good managers and leaders thus affecting the performance and direction of whole organization.

Input to Career Management:

Poor career management of employees results in lack of motivation and increased turnover rate.  A good Human Resource planning system increase employee’s motivation and reduce turnover rate by helping organization to better manage employee’s career. Human Resource planning system provides useful input in to career management by identifying whom to promote and how to fill different positions from internal labor market.

Input to Strategic Decision:

A good Human Resource planning system provides useful input in to strategic decisions by guiding organization which opportunities to exploit. For example if an organization has a very good internal labor market of International managers then organization can move into different international markets because it has right managers who can support such International expansion strategy. On the other hand if organization has a poor Human Resource planning system, it can result in making wrong strategic decisions for example British Airways who once tried to increase its operations but suffer big losses because of non-availability of talented staff and managers to support such strategy.