A common thread in all businesses — regardless of industry, size, market, or geography — is change. It’s difficult to predict consumer and market trends, economic trends, employee sentiment, and customer behavior. Show
At the same time, businesses need to ensure they have the right people on their teams to meet whatever changes come their way. How is this possible? With effective human resource planning, businesses can anticipate their workforce needs and prepare for the challenges ahead.
What is human resource planning?Human resource planning, which is sometimes referred to as workforce planning, is a systematic process that organizations use to determine who they need on the team to reach their business goals. This type of planning includes developing a hiring strategy, forecasting needs, planning for recruitment, providing training and development, and optimizing people’s unique talents and skills. The purpose of human resource planning is to minimize workforce, talent, or skill-set shortages and surpluses. When done effectively, it enables businesses to navigate any internal and external changes that could affect their operations. Human resource planning should be in sync with the overall organizational strategy and business goals. If there’s a disconnect, the HR department won’t be able to effectively contribute to furthering company objectives. That’s why human resource planning needs to take a long-term approach and get buy-in from the organization’s leaders. Why is human resource planning important?Businesses conduct human resource planning because the process helps organizations reach their overarching goals. Related advantages include
Steps for human resource planningEach organization should customize the steps involved in human resource planning to meet its individual needs. Industry, business size, customer segments, competitors, and other factors will all come into play, so you can’t follow the same approach as another organization. Here’s a general outline of the steps to follow when creating your plan. 1. Understand and analyze company objectivesAs with any kind of strategic planning, the first step in human resource planning is to establish the short-term and long-term goals the organization wants to achieve. Typically, these plans begin by outlining the vision, mission, and core values of the business — the “why” of the company. This helps clearly set the stage for what everyone in the business is working toward. Outline specific business goals that have been established at the leadership level. Examples of these goals include increasing revenue by a certain percentage or becoming a market leader in a certain category over a certain period of time. Having a clear set of measurable goals as part of the human resource plan provides a pathway for establishing which employees you’ll need to get the job done. For example, if one of the business’s goals is to increase sales of its enterprise product, then the business will likely need more people who have expertise in selling to enterprise customers. In addition to the goals of the organization, other elements to consider during this first step include
2. Review the current environmentWhile the first step is to figure out where the business wants to go in the future, the second step is all about understanding where the business is in the present. In this stage of human resource planning, businesses need to conduct a detailed internal and external scan of their current environment and resources. Internal
External
3. Forecast future demandNow that you understand where the business wants to go compared to where it currently is, it’s time to get specific about what it will take to reach your goals. In some cases, it may make sense for human resource plans to begin with this step. When forecasting future demand, keep the larger business goals of the company in mind, as well as the KPIs you’ve set for the HR department. Forecasting typically includes two separate elements:
Effective forecasting requires a combination of quantitative and qualitative elements. Taking one approach or the other won’t give you a complete picture of the right people the business needs to reach its goals. 4. Identify gaps within the businessIn addition to forecasting, which looks at what resources your company will need, businesses also need to consider the supply of talent. Where will these employees come from? Will they be external hires or employees promoted from within? In some organizations, this step is conducted simultaneously with forecasting. This aspect of human resource planning determines any gaps in your current organization that you need to fill. Compare the forecast to the current talent pool within the business. Important questions to ask include
Keep in mind that for many organizations, recruiting, hiring, and onboarding a new employee is costly and time-consuming, which is why many organizations prefer to look internally to fill gaps before looking externally. Once the organization has determined the gaps that can’t be filled internally, it can begin to consider external sources of hiring and contracting. 5. Develop a human resource action planNext, it’s time to create an actionable step-by-step plan to fill the resource gaps you’ve identified. There are three key ways to fill the gaps:
In addition to deciding how you’ll fill the employee gaps within the organization to reach business goals, outline your
6. Put the plan into playOne of the most challenging parts of human resource planning is the actual implementation of the plan. The human resource management team will need to roll up their sleeves and begin the hard work. Here are tips to make implementation easier and more effective:
7. Monitor and adjust the plan as necessaryThe key to success for any type of strategic planning is to monitor and measure results. However, this step is often forgotten, and many organizations don’t take the time to review KPIs and make necessary adjustments. For human resource planning, it’s critical to review the progress of the plan at regular intervals and see the relationship to the desired results. If something isn’t working or is behind schedule, it requires special attention. If something is tracking ahead of schedule, the business may be able to learn from it and replicate the strategy in other areas. Set up a process for tracking progress and measuring KPIs. This may be as simple as setting up a weekly meeting with the members of the team who are implementing the plan, and discussing what activities they have completed and whether they’re facing any obstacles. It can also include human resources management system (HRMS) reporting tools for tasks like measuring progress on employee training and recruitment. Determine the most effective way for your organization to understand progress and measure success. If something isn’t working as hoped, develop a strategy to correct your course. For example, if the business isn’t able to recruit employees with specific career expertise directly, you may need to work with a specialized recruiting agency. Be sure to communicate any strategic changes to the stakeholders involved so there are no surprises.Human resource planning is a strategic way to position your business for success and ensure it has the right number of people with the right kind of skills. Follow the steps outlined above to ensure you consider both internal and external factors that can affect the future direction of your business. Remember to actively monitor progress and adjust the strategy as needed to ensure the business reaches its goals. Want the full rundown on the topic? Check out the complete guide we created on human resource management. This article is originally published on Jun 16, 2021, and updated on May 10, 2022. What are the steps of human resource planning?There are four general steps in the HRP process: identifying the current supply of employees, determining the future of the workforce, balancing between labor supply and demand, and developing plans that support the company's goals.
Which of the following is the first step in the human resource planning process?The first step in the human resource planning process is to assess your current staff. Before making any moves to hire new employees for your organization, it's important to understand the talent you already have at your disposal. Develop a skills inventory for each of your current employees.
What is the last step in the human resource planning process?After you've assessed your current human resources capacity, projected future HR demands, and identified the gaps, the final step is to integrate your human resources plan with your organizational strategy.
What are the five steps in manpower planning?Five Planning Steps Every Organization Should Use. Analysis of Organizational Plans and Objectives. ... . Preparing a Human Resources Inventory. ... . Assessing Future Supply and Demand. ... . Matching Supply and Demand. ... . Establishing an Action Plan.. |