An effective human resource planning process helps organizations maximize human capital and build a future-ready workforce. Let’s delve into the importance of human resource planning in more detail and what the process looks like.
Human resource planning (HRP) describes an ongoing, data-driven process in which a company systematically plans for the future in terms of human resources to ensure that available jobs are suited with appropriately skilled employees. It identifies key HR initiatives for the time period ahead that will help the organization achieve its strategic goals and maintain its competitive advantage without staffing shortages or excesses.
Organizations must be able to adapt their human capital to sustain the continuous shifts in technology, local and global economics, product innovation, and culture. Human resource planning is integral to maximizing a well-equipped workforce, and it offers other advantages that assist in accomplishing your organization’s mission.
The actual process of human resource planning involves five general phases. Listed below is a summary of each step to help you navigate the process:
Success in HR planning relies on its connection to business goals, so you must start with a final purpose in mind. Determine what the organization wants to achieve in the future, how it intends to accomplish this, and how HR efforts will contribute to it.
Each department will have unique objectives that HR will need to be involved in. Ideally, HR works very closely with management and has a clear grasp of what every area of the company is aiming for. Once you know that, you can ascertain how HR will meet those needs. For example, some departments may need you to focus on recruiting, while others may need to be downsized and reassign some current employees.
There are tools that can help you make a road map for this step of the HR planning process. An organizational chart is a visual description of a company’s staff structure that designates roles and reporting relationships. Below you can see an example of an HR organization chart in a mid-sized organization:
A replacement chart is a diagram of potential candidates and their readiness to step into certain roles upon employee departures.
A skills inventory looks at the availability and preparedness of current employees to move into either lateral or higher-level roles. It allows you to identify which employees have the ability to take on new positions as the needs of the company change. It also helps you uncover any skills deficiencies.
Here is how you can use an employee’s skills inventory to identify opportunities for development:
You can use a SWOT (strengths, weaknesses, opportunities, threats) analysis to compile your findings and see which elements need the most focus.
Now it’s time to formulate a human resource action plan that aligns with your organization’s overall strategy. It should take into account all the analyses you’ve completed and include talent strategies to match the supply and demand to get your organization ready for the future.
Your plan can start with the theoretical concept of transforming the company from X to Y and then name the step-by-step approach that HR will facilitate. This will include developing methods to enhance specific strategies to take you to the ideal stage. Typical areas of focus include recruiting, onboarding, training, benefits, performance management, remote/flexible work options, and company culture.
Here is a template of what an action plan could look like:
There is no one-size-fits-all content for a strategic HR plan. Each organization’s strategy will be unique, depending on its goals and the type of business it is. A small startup’s plan would include completely different factors than that of a multi-national corporation. One company may need to start with an enhanced recruitment program to find a certain number of highly skilled employees with specialized knowledge. Another company might be able to begin with training its current staff.
Once your plan is set, you must focus on integrating it with strong company-wide communication. Be prepared for some resistance to change that may occur within frontline employees and management. Integrating will be easier if you are hiring new employees because they will be more accepting of a new way.
After you put your human resource plan in place, you must determine whether it is yielding results. Review how well it is helping you execute the organizational strategy and achieve goals in areas such as productivity or employee retention and satisfaction, etc. Monitor the new practices and look for areas where the plan might be hindered.
It’s also essential to learn how changes are affecting employees. Managers can ask for feedback during performance reviews, or you can conduct employee surveys to get a feel for how things are going.
Once you have input, you can identify any obstacles and work around them to adjust and improve your planning. You can even return to step one and start the planning process again armed with what you learned from the initial implementation.
Human resources planning processes need to be an ongoing activity that is constantly evaluating and developing to stay in sync with all the changes companies must face.
Planning for the future is always a challenge when there is no way to be certain of what it holds, and you can’t foresee every possible development. Nevertheless, it is worth the effort. With some preparation, human resources managers can avoid having to spontaneously improvise in more situations.
With an accurate understanding of the dimensions and dynamics of human resources, you have the essentials for an effective human resource planning process that results in a concrete, actionable plan. To develop and carry out your human resource plan, make sure to thoroughly analyze your current situation and future needs.
