BBA IMPORTANCE OF HRP

Importance for HRP/Factors affecting HRP in the organization

Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management.

1. Employment

HRP is affected by the employment situation in the country i.e. in countries where there is greater unemployment; there may be more pressure on the company, from government to appoint more    people. Similarly some company may force shortage of skilled labour and they may have to appoint people from other countries.

2. Technical changes in the society

Technology changes at a very fast speed and new people having the required knowledge are required for the company. In some cases, company may retain existing employees and teach them the new technology and in some cases, the company have to remove existing people and appoint new.

3. Organizational changes

Changes take place within the organization from time to time i.e. the company diversify into new products or close down business in some areas etc. in such cases the HRP process i.e. appointing or removing people will change according to situation.

4. Demographic changes

Demographic changes refer to things referring to age, population, composition of work force etc. A number of people retire every year. A new batch of graduates with specialization turns out every year. This can change the appointment or the removal in the company.

5. Shortage of skill due to labour turnover

Industries having high labour turnover rate, the HRP will change constantly i.e. many new appointments will take place. This also affects the way HRP is implemented.

6. Multicultural workforce

Workers from different countries travel to other countries in search of job. When a company plans it’s HRP it needs to take into account this factor also.

7. Pressure groups

Company has to keep in mind certain pleasure. Groups like human rights activist, woman activist, media etc. as they are very capable for creating problems for the company, when issues concerning these groups arise, appointment or retrenchment becomes difficult.

Definition of VRS

VRS refers to voluntary retirement scheme, when company faces the problem of surplus labour, they have to remove the extra workers. This needs to be done to avoid increase in cost. One of the methods used by the companies is the VRS scheme. Under this scheme people have put in 20 or more number of years of service are given an option to opt for early retirement benefits and some other amount which is due to them are paid when they leave the company.