Planning of human resources (HR planning) refers to determining which skills of employees and at what price will be required for the company to achieve its objectives. The main task of human resource planning (in the narrow sense) is to ensure the implementation of the plans of the organization in terms of human factors – workers: their number, qualifications, performance, cost. Poor human resource planning is costly for organizations and can lead to loss of valuable resources. At the same time, effective human resource planning positively affects the results of the organization through:

• Optimization of the use of staff. Detailed planning can identify and productively use unclaimed potential employees through increasing their job responsibilities, transferring to other jobs or departments, or reorganization of production processes.
• Improvement of the hiring process. Planning is a source of information about the need of staffing that enables to provide search and selection of candidates for systematic basis, as well as to reduce costs and avoid crises linked to lack of workers.
• Organization of professional training. Development and implementation of this training can ensure that the candidates possess the necessary skills.

It is necessary to understand what factors influenced the need in human resources. Organizations are open social systems, therefore, their need for workers arise under the influence of both internal and external factors.

• Internal factors: the organization’s requirements for workers depend primarily on the goals that the company has, for implementation of which the human resources are needed.
• External factors: among many external factors, there are several, which are the most essential ones. They affect the labor market directly, as they are the sources of manpower for the majority of modern organizations. For instance, economic growth, inflation and unemployment, structural changes have a strong impact on the strategy of the organization and the labor market. The developments in science and modern technology may influence the needs of the employees very dramatically. An excellent example would be the PCs which replaced millions of accountants worldwide. Political changes may affect the demand for human resources and the state of the labor market by changing legislation (tax regime, social insurance system, or labor legislation) as they can create a certain political climate in the country. Understanding the dynamics of the factors that affect the organization’s needs in employees is the basis of human resources planning. Modern organizations use different methods of planning.

Extrapolation is the simplest and most commonly used method. The main idea is to project the current situation in the future. The attractiveness of this method lays in its accessibility; the main drawback is that it is impossible to take into account the changes in the organization and the external environment. Therefore, this method is suitable for short-term planning and for organizations with a stable structure, which operate in a stable environment. Many organizations have adjusted the extrapolation method, which takes into account the changes in the balance of factors that determine the number of employees needed, for example, the increase of productivity, higher prices and so on.