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Human Resource Planning (HRP)


Human Resource Planning (HRP) is a strategic process in an organization that involves identifying current and future human resource needs. This process aims to ensure that the organization has the right number of employees with the appropriate skills to meet its operational objectives. HRP also includes forecasting labor demand, analyzing existing labor supply, and balancing projected labor demand and supply.


Human Resource Planning (HRP): /ˈhjuːmən rɪˈsɔːrs ˈplænɪŋ/ (H-R-P: /eɪch ɑːr piː/)

Key Takeaways

  1. Predicting Future Needs: HRP is all about anticipating future organizational needs. It helps managers forecast the future manpower requirements of the organization, minimizing discrepancies between labor supply and demand, and allowing for appropriate action to meet those needs.
  2. Ensuring Optimal Use of Human Resources: Another key takeaway about HRP is that it supports the effective and optimal utilization of human resources. By analyzing current human resources, assessing future demands, and preparing for the fulfilment of those demands, HRP ensures that the workforce is used in the most efficient and productive way possible.
  3. Strategic Approach to HR: HRP is a strategic process that aids in forming and executing organizational goals. By aligning HR management decisions with the overall strategy of the organization, it facilitates organizational growth and sustains a competitive advantage. It also helps communicate the vision and directions of the organization to the employees, fostering a sense of unity and purpose.


Human Resource Planning (HRP) is vital in any organization as it ensures that the right personnel with the needed skills are available at the right time to perform the necessary job functions. It strategically focuses on anticipating and managing the human resource needs of an organization, in line with its goals and objectives. HRP helps in managing both present and future human resource requirements, succession planning, budgeting, and minimizing potential business risks pertaining to staffing. Effective HRP also results in reduced turnover and increased operational efficiency, thereby leading to overall cost minimization and improved productivity.


Human Resource Planning (HRP) is a strategic process that bridges the gap between the present workforce and the future human resources needs of an organization. The purpose of HRP is to ensure that a business is optimally staffed. This planning process is used by businesses to match the right people with the right jobs at the right time. By overseeing recruitment, retention, and redeployment of staff, HRP assists organizations in meeting their goals and objectives. It ensures businesses have the necessary staff levels with the correct skill sets to execute the operations efficiently and successfully, which in turn significantly mitigates potential business risks related to human resources.HRP not only focuses on identifying the requisite human resources needed, but also invests in employee development and performance. It is instrumental in identifying skill gaps, encouraging the training, development & upskilling of existing employees for future roles and managing a succession plan for key positions, thus ensuring business continuity. Furthermore, it also aids in budget planning by projecting costs related to staff recruitment, salaries, benefits, training, etc. Therefore, Human Resource Planning serves as a critical tool in managing organizational changes, forecasting future manpower needs, and enabling businesses to strategically plan and remain competitive.


1. Microsoft Corporation: Microsoft is known for its strategic human resource planning. From hiring talented employees, grooming them through training, continuously assessing their performance, to retaining them with rewarding incentives and benefits, Microsoft puts significant effort in HRP. They anticipated future needs in the fast-changing tech industry and created a program called LEAP Engineering Acceleration Program to attract, train, and retain top tech talents.2. IBM: IBM uses HR planning to analyze the need for future employees and the availability of such employees in the market. They then train existing employees or hire new ones as needed. IBM’s ‘Workforce Management Initiative’ significantly improved its HR planning process, with the system effectively projecting future labor needs and analyzing gaps in skills among their employees.3. McDonald’s: McDonald’s is using human resource planning in the most resourceful way. To ensure they have enough staff to cover each shift, they use HRP in planning and recruiting. McDonald’s also uses HRP to foresee any fluctuation in demand for their products. For instance, during holiday seasons, McD predicts a surge in customer volume and proactively hires temporary workers to ensure customer satisfaction. This kind of forward-thinking HR planning keeps their service efficient and their customers happy.

Frequently Asked Questions(FAQ)

What is Human Resource Planning (HRP)?

Human Resource Planning is a strategic and proactive process that identifies current and future human resources needs for an organization to achieve its goals. It involves forecasting labour demand, analyzing present labour supply, and balancing projected labour demand and supply.

Why is Human Resource Planning (HRP) important for a business?

HRP is crucial for a business as it helps to avoid sudden talent shortages and surpluses. It allows strategic hiring, develops the existing workforce effectively, anticipates the impact of technology to avoid redundancy, controls the staffing costs, and ensures compliance with legal requirements.

How does Human Resource Planning (HRP) align with a company’s strategic plan?

HRP aligns with a company’s strategic plan by ensuring that the organization has the right people, with the right skills, at the right time. This allows a company to meet its current objectives and prepare for future goals.

What are the key steps involved in Human Resource Planning (HRP)?

The key steps involve: 1) analyzing organizational objectives, 2) inventory of current human resources, 3) forecasting demand for labor, 4) estimating the balance of supply and demand, and 5) developing an action plan to address identified gaps.

What are the benefits of effective Human Resource Planning (HRP)?

Effective HRP can result in cost savings, increased productivity, better employee retention, improved succession planning, and better organizational culture. It can also help companies anticipate changes in the business environment and adjust workforce requirements accordingly.

How often should the Human Resource Planning (HRP) process be reviewed?

The frequency of HRP review can vary, but it’s generally good practice to revisit your human resource plan at least once a year. However, if the organization goes through a significant change, such as a merger or restructuring, the HRP process should be reviewed and revised accordingly.

Who is responsible for Human Resource Planning (HRP) within an organization?

Typically, the Human Resources (HR) department oversees the HRP process. However, it’s most effective when there’s collaborative input from other departments or top management as they provide valuable insights into the skills and personnel required to achieve an organization’s goals.

How does technology impact Human Resource Planning (HRP)?

Technology plays an increasingly significant role in HRP. From applicant tracking systems to AI-powered analytics for workforce planning, technology can streamline and enhance the accuracy of the HRP process. It also impacts HRP by changing the skills and roles that an organization may need in the future.

Related Finance Terms

  • Succession Planning
  • Workforce Forecasting
  • Recruitment Strategy
  • Talent Management
  • Organizational Development

Sources for More Information

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