As with nearly all of the HRM activities discussed in this book, there is no one best method for conducting HR planning. How much planning is needed, which forecasting techniques will work best, and how far into the future these estimates should extend all differ from organization to organization.

Surveys indicate, however, that many companies probably do not devote enough time and energy to the HR planning process. Others are not aware that many solutions exist to any gap that might develop between the supply and demand of labor. Finally, organizations must begin to realize that an effective HR plan should work in partnership with a strategic plan. For this to happen, organizational goals must be clearly understood and effectively communicated to employees. Organizations throughout the United States now understand how critical HR planning is to this process. Companies around the world, such as Fiat, Pirelli, and Benetton of Italy, attribute much of their recent success to HR planning and its related policies and programs.

1. The major reasons for formal employment planning are to achieve
   1. More effective and efficient use of human resources.
   2. More satisfied and better-developed employees.
   3. More effective equal opportunity planning.
2. The human resource planning process is a joint responsibility of HR and operating managers, with each performing specific functions in the process.
3. Four forecasting techniques used to determine workforce needs described in the chapter are expert estimates, trend projection, modeling, and unit forecasting.
4. An important step in the planning process is to determine the availability of those presently employed by the organization who can fill projected vacancies. The skills inventory can serve this purpose.
5. Action decisions where there is a shortage of employees depend on the magnitude of the shortage and include overtime, retraining of less-skilled employees, hiring additional employees, and subcontracting some of the work.
6. A growing number of firms are now using computerized human resource information systems to help in the planning process. HRISs perform a number of functions, including applicant tracking, succession planning, skills inventories, and employee services.
7. Action decisions where there is a surplus of employees include attrition, early retirement, demotions, layoffs, and terminations.
8. Organizations need to analyze the supply of and demand for employees in advance so they can take necessary steps to reschedule, recruit, or lay off employees.The organization should analyze workforce composition to determine whether it meets legal constraints.

Human resource planning can be an integral part of the HRM program. It is directly related to recruitment, selection, training, and promotion. By matching supply and demand, the organization can know how many people of what type it needs to fill positions from within (by promotion or training) and how many it must acquire from outside (by recruitment and selection).

Chapters 7 and 8 are devoted to recruitment and selection, in which employment needs are filled from outside the organization when personnel and employment planning decisions show this need.