Estimated Time: 6 hours (4 to 5 weeks)

Lesson Outcomes:
At the end of this lesson, you should be able to:

1. discussed the role of the human resource in strategic

planning;

2. determined the different kinds of human resource planning

and the important elements in strategic HR planning; and

3. explained the advantages in using the elements of human

resource planning.

In today’s dynamic business environment, the ability to effectively plan and manage
human resources is crucial for any organization aiming to achieve its strategic objectives. This
module has been specifically designed for college students pursuing an entrepreneurial
course, with the goal of equipping you with the knowledge and skills necessary to align human
resource strategies with broader business goals.
The strategic management of human resources has become a cornerstone of business
success. Human Resource Strategic Planning (HRSP) is not just about hiring the right people;
it’s about aligning your workforce with the strategic goals of your organization to drive long-
term growth and sustainability. You will be expected to make critical decisions regarding the
management of your workforce. This module will introduce you to the principles and practices
of strategic HR planning, covering key topics such as workforce forecasting, talent
management, succession planning, and the alignment of HR strategies with organizational
objectives. You will also explore how strategic HR planning can drive organizational
performance and competitive advantage.
Throughout this module, you will explore real-world examples and case studies that
illustrate the critical role of HR strategy in achieving business success. You will also engage in
interactive exercises that will help you apply strategic HR concepts to your own entrepreneurial
ventures.
By the end of this module, you will have the tools and insights necessary to craft HR
strategies that not only meet the immediate needs of your business but also contribute to its
long-term vision. Whether you are launching a startup or managing a growing enterprise, this
course will empower you to make strategic HR decisions that enhance your business's overall
performance.
 Module II- Strategic Human Resource Planning

LESSON INFORMATION SHEET #1-3

Strat
e gic

Human Resource Planning

Strategic HR planning predicts the future HR needs of the organization after analyzing
the organization's current human resources, the external labour market and the future HR
environment that the organization will be operating in.
Human Resource Planning (HRP)
Human Resource Planning (HRP) is the process of systematically reviewing human
resource requirements to ensure that the number of employees matches the required skills. It
is the process of matching the internal and external supplies of people with job openings
anticipated in the organization over a specific period of time. Presently HRP is increasingly
being recognized as an important component of Human Resource Management.
What is Strategic Planning?
Strategic Planning is the determination of the overall organizational purpose and goals
and how they are to be achieved. Human resource is the integral component of strategic plan,
which greatly affects productivity and organizations performance. After the strategic plans have
been formulated, human resource strategic planning is to be undertaken. Along theses lines,
strategies are reduced to specific quantitative and qualitative human resource plans. The HRD
shall determine the total manpower component to execute the planned strategic activities.

Two Important Components of the Human Resource Planning

1. Requirement
Forecasting human requirements involves determining the number and types of
employees needed. The level of skills has to be determined and match with the plan
operations. The analysis will reflect various factors such as production plans, and changes in

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productivity together with the introduction of new technology if there is any. The HRD, in order
to forecast availability must look to both internal and external sources. Internal sources refers
to existing manpower that could be reassigned to new positions or be promoted to higher
vacant positions. External sources refer to the positions that are not available inside the
organizations and need to be source out.
2. Availability
When employees requirement have been analyzed, the firm determines whether there
is a surplus or shortage of manpower. If there is a surplus, ways must be instituted to reduce
the number of employees. Some of this methods include restricted hiring, reduce working
hours, early retirement of old employees, and the worst is to layoff some employees. If the
manpower forecast reveals shortage, the HRD must obtained the proper quantity and quality of
workers outside the organization after exhausting efforts to find from within. Human resource
planning must be continuous, as changing condition could affect the entire organization
thereby requiring extensive modifications of forecast.

Aspects of Human Resource Planning

1. Systematic Forecasting of Manpower Needs - on the basis of business conditions and
forecast,manpower needs are planned and monitored closely.
2. Performance Management - analyzing, improving and monitoring the performance of each
employee and of the organization as a whole.
3. Career Management - determining, planning and monitoring the career aspirations each
individual in the organization and developing them for improved productivity.
4. Management Development - assessing and determining the developmental needs
managers for future succession requirements.
Advantages in Using the Elements of HR Planning
 Through a systematic planning of human resources, a company can be better assisted in
attaining its goals and objectives.
 It helps the company determine its manpower needs and provides a method of meeting
them.
 It can be an effective means of planning the development and growth of the employees.
 It can assist in placing the employees properly in jobs where they can maximize the use of
their skills and potentials.
 It can assist the company to attract and retain better qualified employees.

Five Steps to Human Resource Planning

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1. Determining the workload inputs based on the corporate goals and objectives
Once the company’s are known, the operating executives can determine what they are
responsible for in the common endeavor of attaining the corporate goals. The kind and
magnitude of workload determine the organizational structure, the number and quality (skills)
of employees needed to man the organization or department under a desirable level of
performance.
Several factors that should be considered in determining work inputs:
a) Business Development and Assumptions
b) Corporate Panning
c) Economic Forecast
d) Changes in Plans and Products
e) New Product Lines
f) Mergers and Consolidations
2. Studying the jobs in the company and writing the job description and job
specifications
3. Forecasting of manpower needs
a) Determination of the number and skills of people required for the work.
b) Forecasting manpower needs comes next after determining the work input, and is known
as the planned and logical method of determining both quantitatively and qualitatively the
employee s needed to man the work inputs to enable the company to attain its goals.
4. Inventory Manpower
a) An analysis of the present manpower complement of the company to determine whether it
has enough or less or more personnel (both qualitatively and quantitatively) than required.
b) This forth step in the planning process is the inventory (audit) of available current
manpower. What happens in this step is the assessment of the skills, career aspirations,
strengths and weaknesses of each of the current employees and their potentials for
promotions. Each is matched against the positions forecasted in step 3. when the current
manpower is matched against forecast of needs, positions are filled either by promotions,
transfer or assignment of qualified personnel taking into account the most effective method
of achieving the corporate goals.
The net result of this operation is that you either find:
 Enough manpower
 Excess in the number of available manpower, but lacking the skills required.

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 The number of available manpower is insufficient, and the skills are also inadequate to
meet the needs of the work inputs.
5. Improvement Plans
Determination of the appropriate steps to implement the HRP in order to insure that the
company has the right number and right quality of people, properly assigned to jobs for which
they are most useful. This includes action plans to improve the capabilities of current
personnel thru training and development. This plan can be part and parcel of the total
development programs, succession programs, etc.

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Lesson Information Sheets # 2-3

Planning Techniques in HR Management

1. Skills Inventory
This approach involves the listing of all the skills possessed by the workforce and they
are made to relate to the requirement of the organization. This technique requires detailed
information of the experience and training of every individual in the organization.
2. Ratio Analysis
This is a technique wherein the personnel who are promotable to the higher positions
are identified together with their back up or understudy. There should be a ratio that will ensure
that promotions will not create any void. To accomplish this, recruitment must support the
backup requirements. At the same time, training must be done to develop the back up ratio.
3. Cascade Approach
Under this approach the setting of objectives flows from top to bottom in the
organization so that everyone gets a chance to make his contribution. This approach results in
the formulation of a plan wherein the objectives of the rank and file get included in the blueprint
for action. The plan is the a participatory planning outputs.
4. Replacement Approach
Under this approach, HRP is done to have a body of manpower in the organization that
is ready to take over existing jobs on a one-to-one basis within the organization. This approach
calls for year-round acceptance of applications for possible replacements.
5. Commitment Planning Approach
This technique involves the supervisors and personnel in every component of the
organization on the identification of manpower needs in terms, skills, replacements, policy,
working conditions and promotion so that human resource in the organization may be up to the
challenge of current and future operations. The units thus become conscious of their needs
and aware of the ways the human resource requirements can be met.

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6. Successor Planning Approach

This approach known as successor planning takes into considerations the different
components of the old plan and increase them. Proportionately by the desired expansion rate
stated by management as to the total manpower needs.
Common Weakness in Human Resource Planning
1. Over-Planning - a plan is likely to fail through an inherent weakness of having covered too
many aspects of personnel management at the early stage of HRP in the firm or government
office.
2. Technique Overload - the used of so many techniques sometimes leads to the gathering of
so much information. Then the techniques do not get to be appliedbeffectively. This makes the
techniques serve as a trap rather than means for action.
3. Bias for the Quantitative - there are planners in HRP who sometimes make the mistake of
being drawn towards emphasizing the quantitative aspects of personnel management to the
neglect of qualitative side.
4. Isolation of the Planners - when top management has a low regard for human resource
activities and for the HR staff, they give little encouragement to HR activities, ignore the plan
and withdrawn support for plan implementation.
5. Isolation from Organizational Objectives - when HRP is pursued for its own or for narrow
viewpoint on concentrating on HRD, the effort leads to the formulation of a plan that does not
inter phase with organizational development
6. Lack of Line Supervisors Inputs - any plan to develop the personnel and to improve the
conditions of work must use the feedback from the line supervisors, since they are the ones
who are handling the personnel in the organization.
Four Basic Terms in Human Resource Forecasting
1. Long Term Trend - Long term forecasting is usually done for a period of five years or more
depending on the company operations and customer demands.
2. Cyclical Variations - This refers o reasonable and predictable movement that occur over a
period of one year or more. This cyclical movement maybe due to economic conditions,
political instability, peace and order, loss in customer demands and societal pressures. These
variations typically last for one to five years.
3. Seasonal Variations - this is a reasonable prediction change over a period of one year.
This covers firms who manufacture seasonal products and hire temporary workers for
temporary increase in demand, like Christmas and other special occasions.
4. Random Variations - This is one occasions where there is no special pattern and it is quite
difficult to predict or determine. The HR practitioner must be careful in his manpower forecast

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especially in hiring of employees. Along this line, temporary workers are hired instead of
regular workforce.
Human Resource Forecasting Techniques
1. The Zero-Base Approach - It uses the organizations current level of employment as the
starting point in determining future staffing needs. The usual references point is the
organizational structure pattern based on company production forecast on market and
customer demands.
2. The Bottom-Up Approach - This forecast uses the progression upward methods from the
lower organization units to ultimately provide the aggregate forecast of employment needs.
The starting point is the number of current employees and the progress in operation
requirements as the company improves its operation to meet increasing customer demand.
3. Use of Predictor Variables - this method uses the past employment levels to predict future
requirements. Predictor variables are known factors that have an impact on employment.
Sales volume determines employment levels. As production increases, demand manpower
increases. It uses regression analyses to predict one item, which is known as the independent
variable (current employment level) through the other item (sales volume) that is dependent
variables.
4. Simulation - It is a technique for the testing of alternatives on mathematical models
representing the real world situation. The purpose of this model is to permit the human
resource manger to gain considerable insights into a particular problem before making actual
decisions.

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Lesson Information Sheets #3-3

The Important Elements in Strategic Human Resource Planning

1. Organizational Goals - The human resource planning process should be tied up with the
organizational strategic goals. It must rest on solid foundation of information about sales
forecast, market trends, technological advances, and major changes in process and
productivity. Considerable effort should be devoted to securing reliable data on business
trends needs in terms of quantity and quality of labor as the basic input for human resource
planning.
2. Human Resource Forecast - The second element in the planning process is the
forecasting of human resource needs based on business strategies, production, plans and
various indicators of change in technology and the organizations’ operations methods.
Forecasting is usually accomplished by utilizing historical data and reliable ratios. This includes
indirect and direct labor and adjusting the same with productivity trends. The result of this
forecast is the spreadsheet of employees in terms of numbers, mix, cost, new skills, and job
categories and numbers and levels of managers needed to accomplished organizations’
strategic goals.
3. Employee Information - The third element in the planning process is maintaining accurate
information concerning the composition, assignments and capabilities of the current workforce.
This information includes job classification, age, gender, status, organizational level rate of pay
and functions. Employee information may also include the employee’s resume, with such data
as skills, education, training, career interest and other important personal data that could be
used in the movement or transfer of the employee.
4. Human Resource Ability Projections - The fourth element of human resource planning
process is estimating the number of current employees and those that could be available in the
future. By projecting the past data about the size, organization and composition of the
workforce and about turnover, aging, and hiring, availability at a specific future data can be
estimated.
5. Analyzing and Evaluating Human Resource Gaps - Is comparing what is needed with
what is available in terms of numbers, mix, skills and technologies. The comparison permits

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the human resource manager to determine gaps and evaluate where the most serious
mismatches likely appear.
Strategy Evaluation and Control
The final component to the strategic management process is that of strategy evaluation
and control. It is extremely important for the company to constantly monitor the effectiveness of
both the strategy and the implementation process. The monitoring makes it possible for the
company to identify problem areas and either revise existing structures or strategies or revise
new ones. In this process, we see emergent strategies appear as well as the critical nature of
human resources in competitive advantage.
Human Resource Role in Providing Competitive Advantage
Human resource practices are develop to implement strategies that will make the
organization more effective and will answer the company's competitive advantage. HR can
provide strategic competitive advantages in two ways:
1. Emergent Strategies - consist of strategies that evolve from the grassroots of the
organization and can be bought of as what the organizations actually do. Most emergent
strategies are identified with the people in lower level of the management hierarchy. It is
usually the lower level rank and file employees who who provide ideas for new markets, new
products and new strategies being at the front line of operations.
2. Intended Strategies - are the results of the rational decision-making by the top
management as they develop strategic plans. It is a pattern of plans that integrates an
organization’s major goals, policies and action sequences in a cohesive whole. The new focus
on strategic HRM role is directed primarily on intended strategies. The task is to formulate
business related issues relevant to strategy formulation and then deployment of HR systems
that can aid in the implementation and the development of HR systems that can aid in the
implementation of the strategic plan.

Human Resource Information System (HRIS)

HRIS is any organized approach to obtaining relevant
and timely information on which to base human resource
decisions. An effective HRIS is crucial to sound human
resource decision-making. It is designed to provide
information that is - SMART
1. Systematic - information must be systematically
arrange and contain the needed data.
2. Management Oriented - the data and information are
essential tools for effective manpower planning, retention, development, and separation of
employees.

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3. Applicable - the data and information stored in file must be applicable in making human
resource decisions. Irrelevant data must be discarded. Information must be updated from time
to time to be relevant to the current manpower needs requirements. A manager must able to
rely on the accuracy of the information.
4. Result Oriented - the results from the information and the decisions derived thereat must
both acceptable to management and the employees concern. The end results must contribute
to greater company productivity and employees satisfaction.
5. Time Bound - relevant human resource information are necessary for effective decision
making. The need for timely decisions are crucial to the effective management of human
resources.

HRIS also produces and forecast several important reports related to business operations:
1. Routine Reports - these are human resource data summarized on scheduled bases, like
current manpower status, regular employees, contractual employees, supervisor and
managerial employees on a regular payroll.
2. Exception Reports - this information may contain confidential data that are available only
for managerial decision making and needs immediate attention. This may pertain for violations
of existing company rules and procedures, policies and management programs.
3. On Demand Reports - management may demand some reports for analysis. This may
pertain to productivity index, individual performance records, and other information that may
lead to downsizing, and other personnel actions.
4. Manpower Forecast - applies to predictive models based on specific situations. This may
cover increase or decrease in manpower requirements due to seasonal demand or increase
customer orders. Human resource managers must be able to provide timely information and
ready manpower to answer the need of the company operations.
Software Application For HRM
The advent of the different HRM software application has made the human resource
manager‘s functions for decision making just a click on the computer programs. The major HR
functions are:
1. Staffing Applications - common applications used in the area of staffing include the
following
a) Applicant recruiting and tracking
b) DOLE reporting requirements
c) Developing a master employee data base
d) Staffing applications for decision making

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2. Human Resource Planning Application - this involves company specific applications in

determining future employee turnover, growth rate and promotion patterns and other personnel
movements. This include the following applications:
a) Work Force Profile Analysis - it refers to work force labor supply and demand analysis or
work force profile analysis review.
b) Work Force Dynamic Analysis - number of new hires, transfers and promotions. Number
still needed in the future and those employees who are available to fulfill up job opening in
the future.
c) Human resource Planing for Decisions Making - this application pertains to information
about employees who are about to retire, job classification of employees for promotions
and those departments who lack basic skills for the job.
d) Performance Management Applications - employee performance ratings, disciplinary
actions, work rule violations and the daily productivity index could now be stored in the
computer database as bases for management decisions.
e) Training and Development Applications - these are used primarily to track down the need
for employees training programs, courses to attend, certified skills and educational
qualifications. Career applications assess the employees career interest, work values and
career goals.
f) Compensation and Benefits Applications - this includes payroll, job evaluation, salary
planning and analysis of executive compensation planning and management benefits.

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