a human resources strategic plan includes plans

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How to Create a Strategic Plan

Looking for a way to take your company in a new and profitable direction? It starts with strategic planning. Keep reading to learn what a strategic plan is, why you need it and how you can strategically create one.

What Is a Strategic Plan?

When it comes to business and finance, strategic planning will help you allocate your resources, energy and assets. When implemented, a strategic plan will begin to move your operations in a more profitable direction. The primary goal of the plan is to ensure you and any other stakeholders are on the same page and striving to reach the same goal.

Creating a strategic plan requires a disciplined effort. Once you put the plan into action, it will influence the segment of customers that you target, how you serve those customers and the experience those customers have.

Assess the Current Infrastructure and Operations

The first step in creating a strategic plan is to carefully assess your existing infrastructure and operations. You can do this through a SWOT analysis, which is an analysis of the company’s strengths, weaknesses, opportunities and threats. The goal here is to pinpoint the resources that you use to carry out your day-to-day operations, to look at your monthly revenue patterns, to list any company challenges related to the customer experience and, most importantly, to look at your marketing methods and ways to improve the overall customer experience.

Creation of Mission Statement and Objectives

The next step is to create a mission statement. You may already have one, but it’s important to note your mission at the top of the strategic plan document you create. This ensures everyone is focused on the same goal. Your mission statement should cover why you started the company and what you intend to accomplish through the products and services that you offer.

In addition to the mission statement, make sure to outline both short- and long-term objectives. List the objectives according to their priority and designate certain managers or employees to be responsible for each one. Also, jot down the resources that will be used to achieve each objective.

Measure Performance

Now that you know what you’re trying to achieve and who is responsible for each goal, it’s time to deploy the plan and measure its progress. A weekly meeting is extremely important for all managers and stakeholders provide feedback. Your goal is to determine if the company is headed in the right direction. If not, you’ll need to revise the strategic plan accordingly.

Strategic Plans Are Ongoing

Once your strategic plan helps you achieve several objectives, it’s smart to regroup and set new objectives. As your company grows, you can set new goals to ensure the company keeps moving forward. You can share the success of your strategic plan with potential investors as a way to tap into new capital funding.

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4 steps to strategic human resource planning

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4 steps to strategic human resources planning

• Assess current HR capacity
• Forecast HR requirements
• Develop talent strategies
• Review and evaluate

It’s easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer demands. But despite its obvious importance, many organizations do not have a strategic human resource planning process in place, with many HR professionals reporting their departments need to improve strategic alignment.

If you’ve considered developing an HR planning process, you’re in the right place. This article will explain what human resource planning entails and how to document your strategic plan. With this knowledge under your belt, you’ll be filling positions and growing as a company in no time.

Introduction to strategic human resource planning

In order to improve the strategic alignment of staff and other resources, it’s essential to understand how to create a strategic HR planning process. At its most basic level, strategic human resource planning ensures adequate staffing to meet your organization’s operational goals, matching the right people with the right skills at the right time.

It’s important to ask where your organization stands currently and where it is going for your plan to remain flexible. Each company’s plan will look slightly different depending on its current and future needs, but there is a basic structure that you can follow to ensure you’re on the right track.

The strategic human resource planning process begins with an assessment of your current staff, evaluating whether it fits the organization’s needs. After that, you can move on to forecasting future staffing needs based on business goals. From there, you’ll need to align your organization’s strategy with employment planning and implement a plan to not only to hire new employees but also to retain and properly train the new hires—and your current employees—based on business changes.

Read on to understand human resource planning in more detail.

1. Assess current HR capacity

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.

You can do this in a number of ways, such as asking employees to self-evaluate with a questionnaire, looking over past performance reviews, or using an approach that combines the two. Use the template below to visualize that data.

2. Forecast HR requirements

Once you have a full inventory of the resources you already have at your disposal, it’s time to begin forecasting future needs. Will your company need to grow its human resources in number? Will you need to stick to your current staff but improve their productivity through efficiency or new skills training? Are there potential employees available in the marketplace?

It is important to assess both your company’s demand for qualified employees and the supply of those employees either within the organization or outside of it. You’ll need to carefully manage that supply and demand.

Demand forecasting

Demand forecasting is the detailed process of determining future human resources needs in terms of quantity—the number of employees needed—and quality—the caliber of talent required to meet the company's current and future needs.

Supply forecasting

Supply forecasting determines the current resources available to meet the demands. With your previous skills inventory, you’ll know which employees in your organization are available to meet your current demand. You’ll also want to look outside of the organization for potential hires that can meet the needs not fulfilled by employees already present in the organization.

Need advice on calculating your staffing needs and developing a staffing plan?

Matching demand and supply

Matching the demand and supply is where the hiring process gets tricky—and where the rest of the human resources management planning process comes into place. You’ll develop a plan to link your organization’s demand for quality staff with the supply available in the market. You can achieve this by training current employees, hiring new employees, or combining the two approaches.

3. Develop talent strategies

Recruitment

In the recruitment phase of the talent development process , you begin the search for applicants that match the skills your company needs. This phase can involve posting on job websites, searching social networks like LinkedIn for qualified potential employees, and encouraging current employees to recommend people they know who might be a good fit.

Once you have connected with a pool of qualified applicants, conduct interviews and skills evaluations to determine the best fit for your organization. If you have properly forecasted supply and demand, you should have no trouble finding the right people for the right roles.

Decide the final candidates for the open positions and extend offers.

to find the best candidates for your company.

Training and development

After hiring your new employees, it's time to bring them on board. Organize training to get them up to speed on your company’s procedures. Encourage them to continue to develop their skills to fit your company’s needs as they change. Find more ideas on how to develop your own employee onboarding process , and then get started with this onboarding timeline template. 

Employee remuneration and benefits administration

Keep your current employees and new hires happy by offering competitive salary and benefit packages and by properly rewarding employees who go above and beyond. Retaining good employees will save your company a lot of time and money in the long run.

Performance management

Institute regular performance reviews for all employees. Identify successes and areas of improvement. Keep employees performing well with incentives for good performance.

Employee relations

A strong company culture is integral in attracting top talent. Beyond that, make sure your company is maintaining a safe work environment for all, focusing on employee health, safety, and quality of work life.

4. Review and evaluate

Once your human resource process plan has been in place for a set amount of time, you can evaluate whether the plan has helped the company to achieve its goals in factors like production, profit, employee retention, and employee satisfaction. If everything is running smoothly, continue with the plan, but if there are roadblocks along the way, you can always change up different aspects to better suit your company’s needs.

Why document your strategic HR plan

Now that you know the steps to strategic human resource planning, it's time to adapt those steps to your own organization and determine how to execute.

There are a number of reasons to document your strategic human resources plan, particularly in a visual format like a flowchart. Through documentation, you standardize the process, enabling repeated success. Documentation also allows for better evaluation, so you know what parts of your plan need work. In addition, a properly documented plan allows you to better communicate the plan throughout the organization, including how everyone, from the top down, can contribute to make sure the plan works. 

Document every step of the process, from beginning to end, and find room for improvement in your human resources process along the way.

Start creating your own strategic human resource plan with this template.

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2.1 Strategic Planning

Learning objectives.

• Explain the differences been HRM and personnel management.
• Be able to define the steps in HRM strategic planning.

In the past, human resource management (HRM) was called the personnel department. In the past, the personnel department hired people and dealt with the hiring paperwork and processes. It is believed the first human resource department was created in 1901 by the National Cash Register Company (NCR). The company faced a major strike but eventually defeated the union after a lockout. (We address unions in Chapter 12 “Working with Labor Unions” .) After this difficult battle, the company president decided to improve worker relations by organizing a personnel department to handle grievances, discharges, safety concerns, and other employee issues. The department also kept track of new legislation surrounding laws impacting the organization. Many other companies were coming to the same realization that a department was necessary to create employee satisfaction, which resulted in more productivity. In 1913, Henry Ford saw employee turnover at 380 percent and tried to ease the turnover by increasing wages from $2.50 to $5.00, even though $2.50 was fair during this time period (Losey, 2011). Of course, this approach didn’t work for long, and these large companies began to understand they had to do more than hire and fire if they were going to meet customer demand.

More recently, however, the personnel department has divided into human resource management and human resource development, as these functions have evolved over the century. HRM is not only crucial to an organization’s success, but it should be part of the overall company’s strategic plan, because so many businesses today depend on people to earn profits. Strategic planning plays an important role in how productive the organization is.

Table 2.1 Examples of Differences between Personnel Management and HRM

Most people agree that the following duties normally fall under HRM. Each of these aspects has its own part within the overall strategic plan of the organization:

• Staffing. Staffing includes the development of a strategic plan to determine how many people you might need to hire. Based on the strategic plan, HRM then performs the hiring process to recruit and select the right people for the right jobs. We discuss staffing in greater detail in Chapter 4 “Recruitment” , Chapter 5 “Selection” , and Chapter 6 “Compensation and Benefits” .
• Basic workplace policies. Development of policies to help reach the strategic plan’s goals is the job of HRM. After the policies have been developed, communication of these policies on safety, security, scheduling, vacation times, and flextime schedules should be developed by the HR department. Of course, the HR managers work closely with supervisors in organizations to develop these policies. Workplace policies will be addressed throughout the book.
• Compensation and benefits. In addition to paychecks, 401(k) plans, health benefits, and other perks are usually the responsibility of an HR manager. Compensation and benefits are discussed in Chapter 6 “Compensation and Benefits” and Chapter 7 “Retention and Motivation” .
• Retention. Assessment of employees and strategizing on how to retain the best employees is a task that HR managers oversee, but other managers in the organization will also provide input. Chapter 9 “Successful Employee Communication” , Chapter 10 “Managing Employee Performance” , and Chapter 11 “Employee Assessment” cover different types of retention strategies, from training to assessment.
• Training and development. Helping new employees develop skills needed for their jobs and helping current employees grow their skills are also tasks for which the HRM department is responsible. Determination of training needs and development and implementation of training programs are important tasks in any organization. Training is discussed in great detail in Chapter 9 “Successful Employee Communication” , including succession planning. Succession planning includes handling the departure of managers and making current employees ready to take on managerial roles when a manager does leave.
• Regulatory issues and worker safety. Keeping up to date on new regulations relating to employment, health care, and other issues is generally a responsibility that falls on the HRM department. While various laws are discussed throughout the book, unions and safety and health laws in the workplace are covered in Chapter 12 “Working with Labor Unions” and Chapter 13 “Safety and Health at Work” .

In smaller organizations, the manager or owner is likely performing the HRM functions (de Kok & Uhlaner, 2001). They hire people, train them, and determine how much they should be paid. Larger companies ultimately perform the same tasks, but because they have more employees, they can afford to employ specialists, or human resource managers, to handle these areas of the business. As a result, it is highly likely that you, as a manager or entrepreneur, will be performing HRM tasks, hence the value in understanding the strategic components of HRM.

HRM vs. Personnel Management

Human resource strategy is an elaborate and systematic plan of action developed by a human resource department. This definition tells us that an HR strategy includes detailed pathways to implement HRM strategic plans and HR plans. Think of the HRM strategic plan as the major objectives the organization wants to achieve, and the HR plan as the specific activities carried out to achieve the strategic plan. In other words, the strategic plan may include long-term goals, while the HR plan may include short-term objectives that are tied to the overall strategic plan. As mentioned at the beginning of this chapter, human resource departments in the past were called personnel departments. This term implies that the department provided “support” for the rest of the organization. Companies now understand that the human side of the business is the most important asset in any business (especially in this global economy), and therefore HR has much more importance than it did twenty years ago. While personnel management mostly involved activities surrounding the hiring process and legal compliance, human resources involves much more, including strategic planning, which is the focus of this chapter. The Ulrich HR model, a common way to look at HRM strategic planning, provides an overall view of the role of HRM in the organization. His model is said to have started the movement that changed the view of HR; no longer merely a functional area, HR became more of a partnership within the organization. While his model has changed over the years, the current model looks at alignment of HR activities with the overall global business strategy to form a strategic partnership (Ulrich & Brockbank, 2005). His newly revised model looks at five main areas of HR:

• Strategic partner. Partnership with the entire organization to ensure alignment of the HR function with the needs of the organization.
• Change agent. The skill to anticipate and respond to change within the HR function, but as a company as a whole.
• Administrative expert and functional expert. The ability to understand and implement policies, procedures, and processes that relate to the HR strategic plan.
• Human capital developer. Means to develop talent that is projected to be needed in the future.
• Employee advocate . Works for employees currently within the organization.

According to Ulrich (Ulrich, 2011), implementation of this model must happen with an understanding of the overall company objectives, problems, challenges, and opportunities. For example, the HR professional must understand the dynamic nature of the HRM environment, such as changes in labor markets, company culture and values, customers, shareholders, and the economy. Once this occurs, HR can determine how best to meet the needs of the organization within these five main areas.

To be successful in writing an HRM strategic plan, one must understand the dynamic external environment.

HRM as a Strategic Component of the Business

(click to see video)

David Ulrich discusses the importance of bringing HR to the table in strategic planning.

Keeping the Ulrich model in mind, consider these four aspects when creating a good HRM strategic plan:

• Make it applicable. Often people spend an inordinate amount of time developing plans, but the plans sit in a file somewhere and are never actually used. A good strategic plan should be the guiding principles for the HRM function. It should be reviewed and changed as aspects of the business change. Involvement of all members in the HR department (if it’s a larger department) and communication among everyone within the department will make the plan better.
• Be a strategic partner. Alignment of corporate values in the HRM strategic plan should be a major objective of the plan. In addition, the HRM strategic plan should be aligned with the mission and objectives of the organization as a whole. For example, if the mission of the organization is to promote social responsibility, then the HRM strategic plan should address this in the hiring criteria.
• Involve people. An HRM strategic plan cannot be written alone. The plan should involve everyone in the organization. For example, as the plan develops, the HR manager should meet with various people in departments and find out what skills the best employees have. Then the HR manager can make sure the people recruited and interviewed have similar qualities as the best people already doing the job. In addition, the HR manager will likely want to meet with the financial department and executives who do the budgeting, so they can determine human resource needs and recruit the right number of people at the right times. In addition, once the HR department determines what is needed, communicating a plan can gain positive feedback that ensures the plan is aligned with the business objectives.
• Understand how technology can be used. Organizations oftentimes do not have the money or the inclination to research software and find budget-friendly options for implementation. People are sometimes nervous about new technology. However, the best organizations are those that embrace technology and find the right technology uses for their businesses. There are thousands of HRM software options that can make the HRM processes faster, easier, and more effective. Good strategic plans address this aspect.

HR managers know the business and therefore know the needs of the business and can develop a plan to meet those needs. They also stay on top of current events, so they know what is happening globally that could affect their strategic plan. If they find out, for example, that an economic downturn is looming, they will adjust their strategic plan. In other words, the strategic plan needs to be a living document, one that changes as the business and the world changes.

A good HRM strategic plan acknowledges and addresses the use of software in HRM operations.

Howard Russell – Lefroy House – CC BY-NC-ND 2.0.

Human Resource Recall

Have you ever looked at your organization’s strategic plan? What areas does the plan address?

The Steps to Strategic Plan Creation

As we addressed in Section 2.1.2 “The Steps to Strategic Plan Creation” , HRM strategic plans must have several elements to be successful. There should be a distinction made here: the HRM strategic plan is different from the HR plan. Think of the HRM strategic plan as the major objectives the organization wants to achieve, while the HR plan consists of the detailed plans to ensure the strategic plan is achieved. Oftentimes the strategic plan is viewed as just another report that must be written. Rather than jumping in and writing it without much thought, it is best to give the plan careful consideration.

The goal of Section 2 “Conduct a Strategic Analysis” is to provide you with some basic elements to consider and research before writing any HRM plans.

Conduct a Strategic Analysis

A strategic analysis looks at three aspects of the individual HRM department:

Understanding of the company mission and values. It is impossible to plan for HRM if one does not know the values and missions of the organization. As we have already addressed in this chapter, it is imperative for the HR manager to align department objectives with organizational objectives. It is worthwhile to sit down with company executives, management, and supervisors to make sure you have a good understanding of the company mission and values.

Another important aspect is the understanding of the organizational life cycle. You may have learned about the life cycle in marketing or other business classes, and this applies to HRM, too. An organizational life cycle refers to the introduction, growth, maturity, and decline of the organization, which can vary over time. For example, when the organization first begins, it is in the introduction phase, and a different staffing, compensation, training, and labor/employee relations strategy may be necessary to align HRM with the organization’s goals. This might be opposed to an organization that is struggling to stay in business and is in the decline phase. That same organization, however, can create a new product, for example, which might again put the organization in the growth phase. Table 2.2 “Lifecycle Stages and HRM Strategy” explains some of the strategies that may be different depending on the organizational life cycle.

Understanding of the HRM department mission and values. HRM departments must develop their own departmental mission and values. These guiding principles for the department will change as the company’s overall mission and values change. Often the mission statement is a list of what the department does, which is less of a strategic approach. Brainstorming about HR goals, values, and priorities is a good way to start. The mission statement should express how an organization’s human resources help that organization meet the business goals. A poor mission statement might read as follows: “The human resource department at Techno, Inc. provides resources to hiring managers and develops compensation plans and other services to assist the employees of our company.”

A strategic statement that expresses how human resources help the organization might read as follows: “HR’s responsibility is to ensure that our human resources are more talented and motivated than our competitors’, giving us a competitive advantage. This will be achieved by monitoring our turnover rates, compensation, and company sales data and comparing that data to our competitors” (Kaufman, 2011). When the mission statement is written in this way, it is easier to take a strategic approach with the HR planning process.

• Understanding of the challenges facing the department. HRM managers cannot deal with change quickly if they are not able to predict changes. As a result, the HRM manager should know what upcoming challenges may be faced to make plans to deal with those challenges better when they come along. This makes the strategic plan and HRM plan much more usable.

Table 2.2 Lifecycle Stages and HRM Strategy

Source: Seattle University Presentation , accessed July 11, 2011, http://fac-staff.seattleu.edu/gprussia/web/mgt383/HR%20Planning1.ppt .

Identify Strategic HR Issues

In this step, the HRM professionals will analyze the challenges addressed in the first step. For example, the department may see that it is not strategically aligned with the company’s mission and values and opt to make changes to its departmental mission and values as a result of this information.

Many organizations and departments will use a strategic planning tool that identifies strengths, weaknesses, opportunities, and threats (SWOT analysis) to determine some of the issues they are facing. Once this analysis is performed for the business, HR can align itself with the needs of the business by understanding the business strategy. See Table 2.3 “Sample HR Department SWOT Analysis for Techno, Inc.” for an example of how a company’s SWOT analysis can be used to develop a SWOT analysis for the HR department.

Once the alignment of the company SWOT is completed, HR can develop its own SWOT analysis to determine the gaps between HR’s strategic plan and the company’s strategic plan. For example, if the HR manager finds that a department’s strength is its numerous training programs, this is something the organization should continue doing. If a weakness is the organization’s lack of consistent compensation throughout all job titles, then the opportunity to review and revise the compensation policies presents itself. In other words, the company’s SWOT analysis provides a basis to address some of the issues in the organization, but it can be whittled down to also address issues within the department.

Table 2.3 Sample HR Department SWOT Analysis for Techno, Inc.

Prioritize Issues and Actions

Based on the data gathered in the last step, the HRM manager should prioritize the goals and then put action plans together to deal with these challenges. For example, if an organization identifies that they lack a comprehensive training program, plans should be developed that address this need. (Training needs are discussed in Chapter 8 “Training and Development” .) An important aspect of this step is the involvement of the management and executives in the organization. Once you have a list of issues you will address, discuss them with the management and executives, as they may see other issues or other priorities differently than you. Remember, to be effective, HRM must work with the organization and assist the organization in meeting goals. This should be considered in every aspect of HRM planning.

Draw Up an HRM Plan

Once the HRM manager has met with executives and management, and priorities have been agreed upon, the plans are ready to be developed. Detailed development of these plans will be discussed in Section 2.2 “Writing the HRM Plan” . Sometimes companies have great strategic plans, but when the development of the details occurs, it can be difficult to align the strategic plan with the more detailed plans. An HRM manager should always refer to the overall strategic plan before developing the HRM strategic plan and HR plans.

Even if a company does not have an HR department, HRM strategic plans and HR plans should still be developed by management. By developing and monitoring these plans, the organization can ensure the right processes are implemented to meet the ever-changing needs of the organization. The strategic plan looks at the organization as a whole, the HRM strategic plan looks at the department as a whole, and the HR plan addresses specific issues in the human resource department.

Key Takeaways

• Personnel management and HRM are different ways of looking at the job duties of human resources. Twenty years ago, personnel management focused on administrative aspects. HRM today involves a strategic process, which requires working with other departments, managers, and executives to be effective and meet the needs of the organization.
• In general, HRM focuses on several main areas, which include staffing, policy development, compensation and benefits, retention issues, training and development, and regulatory issues and worker protection.
• To be effective, the HR manager needs to utilize technology and involve others.
• As part of strategic planning, HRM should conduct a strategic analysis, identify HR issues, determine and prioritize actions, and then draw up the HRM plan.
• What is the difference between HR plans and HRM strategic plans? How are they the same? How are they different?
• Of the areas of focus in HRM, which one do you think is the most important? Rank them and discuss the reasons for your rankings.

de Kok, J. and Lorraine M. Uhlaner, “Organization Context and Human Resource Management in the Small Firm” (Tinbergen Institute Discussion Papers 01-038/3, Tinbergen Institute, 2001), accessed August 13, 2011, http://ideas.repec.org/s/dgr/uvatin.html .

Kaufman, G., “How to Fix HR,” Harvard Business Review , September 2006, accessed July 11, 2011, http://hbr.org/2006/09/how-to-fix-hr/ar/1 .

Losey, M., “HR Comes of Age,” HR Magazine , March 15, 1998, accessed July 11, 2011, http://findarticles.com/p/articles/mi_m3495/is_n3_v43/ai_20514399 .

Ulrich, D., “Evaluating the Ulrich Model,” Acerta, 2011, accessed July 11, 2011, http://www.goingforhr.be/extras/web-specials/hr-according-to-dave-ulrich#ppt_2135261 .

Ulrich, D. and Wayne Brockbank, The HR Value Proposition (Boston: Harvard Business Press, 2005), 9–14.

Human Resource Management Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Strategic HR Planning

• Operational HR Planning
• Workforce Demographics, Metrics and Succession Planning
• Risk Management in HR
• The Board’s Role in HR
• HR Policies & Employment Legislation
• Recruitment/Hiring
• Compensation & Benefits
• Diversity at Work
• Workplaces that Work
• Learning, Training & Development
• Toolkit Index
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• HR Planning & Infrastructure

Strategic HR planning links HR management directly to the strategic plan of your organization.

Most mid- to large-sized organizations have a strategic plan that guides them in successfully meeting their missions. Organizations routinely complete financial plans to ensure they achieve organizational goals. While workforce plans are not as common, they are just as important.

Even a small organization can develop a strategic plan to guide decisions about the future. Based on its overall strategic plan, your organization can develop a strategic HR plan that will allow you to make HR management decisions now to support the future direction of the organization. Strategic HR planning is also important from a budgetary point of view so that you can factor costs such as recruitment and training into your organization's operating budget.

Strategic HR management is defined as integrating human resource management strategies and systems to achieve the overall mission, strategies and success of the firm while meeting the needs of employees and other stakeholders. (Source: Herman Schwind, Hari Das and Terry Wagar, Human Resource Management: A Strategic Approach.)

Part of strategic planning is defining your organization's mission, vision and values. Andrew Fleck Child Care Services has provided their Mission, Vision and Values as an example:

Mission – We support children and their families through high quality, inclusive services that meet their diverse developmental, early learning and child care needs

Vision – Working with the Ottawa community to build accessible multi-service support, early learning opportunities and child care for every child

• Accountability
• Responsiveness
• Inclusiveness

Your strategic HR plan should be aligned with your Mission, Vision and Values.

In this section:

• Introduction to Strategic HR Planning
• The Strategic HR Management Planning Process
• Documenting the Strategic HR Plan
• Implementing the Strategic HR Plan

Introduction to strategic HR planning

The overall purpose of strategic hr planning is to:.

• Ensure adequate human resources to meet the strategic goals and operational plans of your organization – the right people with the right skills at the right time
• Keep up with social, economic, legislative and technological trends that impact on human resources in your area and in the sector
• Remain flexible so that your organization can manage change if the future is different than anticipated

Strategic HR planning predicts the future HR needs of the organization after analyzing the organization's current human resources, the external labour market and the future HR environment that the organization will be operating in. The analysis of HR management issues external to the organization and developing scenarios about the future are what distinguishes strategic planning from operational planning.

The basic questions to be answered for strategic planning are:

• Where are we going?
• How will we develop HR strategies to successfully get there, given the circumstances?
• What skill sets do we need?

HR Management  Standard 6.1 The organization has a process to review staffing needs resulting in a plan to address those needs.

The strategic HR management planning process

The strategic HR management planning process has four steps: Assessing the current HR capacity Forecasting HR requirements Gap analysis Developing HR strategies to support organizational strategies

1. Assessing the current HR capacity

Based on the organization's strategic plan, the first step in the strategic HR planning process is to assess the current HR capacity of the organization. The knowledge, skills and abilities of your current staff need to be identified. This can be done by developing a skills inventory for each employee.

The skills inventory should go beyond the skills needed for the particular position. List all skills each employee has demonstrated. For example, recreational or volunteer activities may involve special skills that could be relevant to the organization. Education levels and certificates or additional training should also be included.

An employee's performance assessment form can be reviewed to determine if the person is ready and willing to take on more responsibility and to look at the employee's current development plans.

2. Forecasting HR requirements

The next step is to forecast HR needs for the future based on the strategic goals of the organization. Realistic forecasting of human resources involves estimating both demand and supply.

Questions to be answered include:

• How many staff will be required to achieve the strategic goals of the organization?
• What jobs will need to be filled?
• What skill sets will people need?

When forecasting demands for HR, you must also assess the challenges that you will have in meeting your staffing need based on the external environment.

• How will the external environment impact our HR needs?

3. Gap analysis

The next step is to determine the gap between where your organization wants to be in the future and where you are now. The gap analysis includes identifying the number of staff and the skills and abilities required in the future in comparison to the current situation. You should also look at all your organization's HR management practices to identify those that could be improved or new practices needed to support the organization's capacity to move forward.

• What new jobs will we need?
• What new skills will be required?
• Do our present employees have the required skills?
• Are employees currently in positions that use their strengths?
• Do we have enough managers/supervisors?
• Are current HR management practices adequate for future needs?

4. Developing HR strategies to support organizational strategies

There are five HR strategies for meeting your organization's future needs: Training and development strategies Recruitment strategies Outsourcing strategies Collaboration strategies Restructuring strategies

1. Training and development strategies

These strategies include:.

• Providing staff with training to take on new roles
• Providing current staff with development opportunities to prepare them for future jobs in your organization

Training and development needs can be met in a variety of ways. One approach is for the employer to pay for employees to upgrade their skills. This may involve sending the employee to take courses or certificates, or it may be accomplished through on-the-job training. Many training and development needs can be met through cost effective techniques.

2. Recruitment strategies

• Recruiting new staff with the skill and abilities that your organization will need in the future
• Considering all the available options for strategically promoting job openings and encouraging suitable candidates to apply

Each time you recruit you should be looking at the requirements from a strategic perspective. For example, if your organization has several supervisors that are nearing retirement age, your recruitment strategy should include recruiting staff with the ability to assume a supervisory role in the near future.

3. Outsourcing strategies

• Using external individuals or organizations to complete some tasks

Many organizations look outside their own staff pool and contract for certain skills. This is particularly helpful for accomplishing specific, specialized tasks that don't require ongoing full-time work.

Some organizations outsource HR activities, project work or bookkeeping. For example, payroll may be done by an external organization rather than a staff person, a short-term project may be done using a consultant, or specific expertise such as legal advice may be purchased from an outside source.

When deciding to outsource to an individual, ensure you are not mistakenly calling an employee a consultant. This is illegal and can have serious financial implications for your organization. To understand the differences between employees and self-employed people, visit the Canada Revenue Agency's website .

Each outsourcing decision has implications for meeting the organization's goals and should therefore be carefully assessed.

4. Collaboration strategies

The strategic HR planning process may lead to indirect strategies that go beyond your organization. By collaborating with other organizations you may have better success at dealing with a shortage of certain skills.

Examples of collaboration include:

• Working together to influence the types of courses offered by educational institutions
• Working with other organizations to prepare future leaders by sharing in the development of promising individuals
• Sharing the costs of training for groups of employees
• Allowing employees to visit other organizations to gain skills and insight

5. Restructuring strategies

If your assessment indicates that there is an oversupply of skills, there are a variety of options open to assist in the adjustment.

• Reducing staff either by termination or attrition
• Regrouping tasks to create well designed jobs
• Reorganizing work units to be more efficient

Termination of workers gives immediate results. Generally, there will be costs associated with this approach depending on your employment agreements. Notice periods are guaranteed in all provinces. Be sure to review the Employment and Labour Standards in your province or territory to ensure that you are compliant with the legislation.

Termination packages are governed by case law as well as by employment standards legislation (which only states the bare minimum to be paid).  Consult with a lawyer to determine the best approach to termination packages.

Attrition – not replacing employees when they leave – is another way to reduce staff. The viability of this option depends on how urgently you need to reduce staff. It will mean that jobs performed in the organization will have to be reorganized so that essential work of the departing employee is covered. Careful assessment of the reorganized workloads of remaining employees should include an analysis of whether or not their new workloads will result in improved outcomes.

It is important to consider current labour market trends (e.g., the looming skills shortage as baby boomers begin to retire) because there may be longer-term consequences if you let staff go.

Sometimes existing workers may be willing to voluntarily reduce their hours, especially if the situation is temporary. Job sharing may be another option. The key to success is to ensure that employees are satisfied with the arrangement, that they confirm agreement to the new arrangement in writing, and that it meets the needs of the employer. Excellent communication is a prerequisite for success.

Your analysis may tell you that your organization may have more resources in some areas than others. This calls for a redeployment of workers to the area of shortage. The training needs of the transferred workers need to be taken into account.

Documenting the strategic HR plan

Once the strategies for HR in your organization have been developed they should be documented in an HR plan. This is a brief document that states the key assumptions and the resulting strategies along with who has responsibility for the strategies and the timelines for implementation.

Implementing the strategic HR plan

Once the HR strategic plan is complete the next step is to implement it.

Agreement with the plan

Ensure that the board chair, executive director and senior managers agree with the strategic HR plan. It may seem like a redundant step if everyone has been involved all the way along, but it's always good to get final confirmation.

Communication

The strategic hr plan needs to be communicated throughout the organization. your communication should include:.

• How the plan ties to the organization's overall strategic plan
• What changes in HR management policies, practices and activities will be made to support the strategic plan
• How any changes in HR management will impact on staff, including a timeframe if appropriate
• How each staff member can contribute to the plan
• How staff will be supported through any changes
• How the organization will be different in the future

It is impossible to communicate too much (but all too easy to communicate too little), especially when changes involve people. However, the amount of detail should vary depending upon the audience.

Legislation and mandate

Ensure that the actions you are considering are compliant with existing laws, regulations and the constitution and bylaws of your organization.

To review laws relating to employment, visit the HR Toolkit section on Employment Legislation and Standards .

Organizational needs

Whether you are increasing or reducing the number of employees, there are implications for space and equipment, as well as existing resources such as payroll and benefit plans.

HR plans need to be updated on a regular basis. You will need to establish the information necessary to evaluate the success of the new plan. Benchmarks need to be selected and measured over time to determine if the plan is successful in achieving the desired objectives.

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Hr strategic planning.

HR strategic planning involves the identification of and response to HR functional and talent risks that inhibit the successful execution of strategic priorities. It refers to the way that HR leaders plan for business risks and opportunities by prioritizing and allocating resources to HR initiatives. This involves aligning business and HR strategies, defining HR priorities relative to critical business initiatives, and adjusting the execution of initiatives as business conditions change. HR leaders often need assistance with either making the business case for the HR strategic planning of specific initiatives for the coming year, or prioritizing resource allocation between several ongoing projects.

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What is Strategic Planning in Human Resource Management?

Strategic Planning within an Organization

Plans using a strategic method should focus on the whole organization. There are several approaches to creating a strategic plan, including:

• goals-based
• issues-based
• organic or holistic approaches

According to the Free Management Library , many organizations use goals and vision-based planning. The first step in goal based strategic planning is to develop a holistic vision for the organization and its stakeholders which management wants to achieve in a defined time frame, usually from one to five years. Managers and directors then set defined, quantifiable goals within the time frame, and planning steps are articulated. Goals-based planning usually works backward from the future to the present to identify specific steps and benchmarks.

Issues-based planning takes a different approach from goals-based planning. Issues-based planning usually occurs in response to current issues. Instead of articulating a business or organization-wide vision across all departments and stakeholders, an issues-based strategic process will focus on immediate or easily foreseen issues. As an example, a business may learn of a new law that will require it to change significant parts of its operations. An issues-based plan will start in the present and identify objectives that can be achieved to successfully comply with the law while keeping a strong profit margin.

Basic Elements of the Strategic Plan

Strategic plans for any kind of organization, whether they are short-term or longer-term, involve an organization’s basic mission or purpose. The strategic plan should also include organizational values and vision, which should be articulated by:

• other stakeholders

The plans should also include an analysis of external factors influencing the organization, such as legal considerations or raw materials costs, as well as internal factors which are under the organization’s control. Next, organizations should identify specific, measurable goals and match them with strategies or action steps which can help to achieve the goals.

Read:  50 Most Affordable Small Colleges for an HR Degree

Enacting the Strategic Plan

Whether or not the organization is a large business or a small not-for-profit charity, a strategic plan isn’t very effective if it can’t be achieved. Action planning includes writing down and monitoring the actions necessary to achieve each goal. In large organizations, divisions or departments will be identified. In smaller businesses, an individual may be responsible for the action steps. Budgeting is also crucial for a successful strategic plan. Each objective should have a monitored budget.

The HRM Strategic Planning Process

After assessing an organization’s strategic plan, the HR leadership team comes together to create the human resources management strategic plan .  The strategic HR planning process identifies human resources strategic goals and objectives that align with those of the organization.  There are several steps involved including:

Environmental Analysis

• SWOT Analysis

Gap Analysis

Developing hr strategies, implementation and evaluation.

Human resource strategy is the organization’s long-term plan for managing staff in a way that aligns with company values. Integrating human resource management strategies to the organization’s mission helps ensure success.  We’ll explain how each of these steps are used in the strategic human resource planning process.

An environmental analysis is the first step in the human resources planning process.  The planning team conducts an analysis of both external and internal factors that could impact the workforce.  These might include:

• economic trends
• labor market conditions
• technology changes

SWOT Analysis 

HR strategy plans aren’t effective if businesses or nonprofits don’t take their abilities into account. Managers can identify which action steps will be most effective, and which strategies may be necessary by conducting a SWOT analysis. SWOT stands for:

• Opportunities

The SWOT analysis should be completed from an HR perspective.  will show which parts of the organization can best achieve goals and objectives.  It and may also help to identify other objectives for improvement.

Once the analysis is complete, the planning team uses the information to forecast, or anticipate, future human resources needs.  They assess the current HR capacity, taking a look at the knowledge and skills of the current staff.  HR forecasting involves realistically estimating both supply and demand.

A gap analysis portion of the human resource planning process compares the current workforce capabilities to the projected needs.  It’s important to determine whether there is a shortage or excess of skills or competencies.  Any gaps need to be identified.

An action plan is created to develop HR strategies once analyses are completed.  The HRM plan may include things like:

• talent acquisition
• employee retention
• performance management
• succession planning
• diversity and inclusion

The next step is to create an implementation plan that includes things like:

• required resources
• responsible parties

Once the strategic HR management plan has been implemented, it is important to monitor the progress and make adjustments when needed.  It is a good idea to evaluate the plan periodically to make sure the strategies are effective.  Setting metrics and analyzing data can help stakeholders determine if the strategies are having an impact on overall business performance.

Many people have heard the adage, “if you fail to plan, you plan to fail.” A strategic HR plan can help the organization achieve its mission and goals while maximizing profit.  HR strategies can help companies of all sizes survive achieve their goals within budget.

5 Steps To Developing A Strategic HR Plan

by Amy Letke | Apr 18, 2018 | Blog

Amy Newbanks Letke, SPHR, GPHR, is the Founder of Integrity HR, Inc. Amy provides workplace solutions to improve performance, reduce liability and increase profits. She is passionate about helping other entrepreneurs and business owners achieve success. Contact us for more insights - 502-753-0970 or [email protected]

You’ve heard it before, and you’ll hear it again – every business needs a strategic plan.

The most successful companies develop and implement an effective strategic plan to help them pursue their organizational goals. But, even the best strategic plan won’t be very effective if the human resources function isn’t in alignment with it.

A Strategic HR Plan is a tool to help businesses align their organizational goals with their HR capabilities , and every business should have one in place to support the growth outlined in their strategic plan.

If you haven’t developed a Strategic HR Plan for your business (or if you’re still not quite sure what it is!), don’t worry!

Below we share our 5 Steps To Developing A Strategic HR Plan to help you effectively support and achieve your organization’s strategic goals.

If you’re interested in learning more about developing a  Strategic HR Plan  or a Strategic Plan for your business, schedule an appointment with one of our HR professionals or give us a call at 877-753-0970 .

What is a Strategic HR Plan?

A Strategic HR Plan helps organizations to align human resources to corporate strategy. It is an essential planning document built upon the corporate mission, vision, values, and goals established in the strategic business plan.

It provides information on how the HR function will support the goals and strategies of the organization, while also ensuring that HR planning and practices are consistent.

The ideal Strategic HR Plan outlines how the gaps between present and future capabilities will be addressed, enabling businesses to effectively pursue their company goals.

Why develop a Strategic HR Plan?

In most organizations, managers have a responsibility to fulfill expectations in the areas of corporate governance, transparency of policies, accountability, and economic efficiency.

For your business to be successful in these areas, you need to have the right people, with the right skills, in the right place, at the right time to carry out the strategy.

A comprehensive Strategic HR Plan will ensure that you have the capacity to deliver on strategy and the ability to monitor progress towards your organization’s goals. It should also establish:

• HR practices that are consistent across the organization
• Training and skill development policies that are linked to strategy
• Succession planning processes that identify and minimize capability risks

How do you create a Strategic HR Plan?

The process for developing a Strategic HR Plan begins by identifying where your organization is now in the life-cycle of an enterprise: the start-up stage, the growth stage, the mature stage, or the decline stage.

Once you’ve decided where your company is today, formulate a clear picture of your company’s future along with ways to get there. Your Strategic HR Plan will be built upon the foundation of this strategic business plan.

Step 1: Identify Future HR Needs

Using your business’ strategic plan as a guide, identify the future HR needs of the organization. Ask questions like:

• What is the nature of our work?
• What type of culture will support productivity?
• What skills do we need to deliver results?
• Where are those skills and how are we tapping into them?
• How large is our organization?
• What systems and processes do we need?
• How are we making sure peoples’ skills match our needs?
• What risks are associated with this future?

Step 2: Consider Present HR Capabilities

Now consider your company’s present HR situation by asking questions like:

• With the future in mind, what is our current capability?
• How are we doing against benchmarks?
• What are our strengths and weaknesses?
• Are there legislative requirements we need to consider?
• What are we doing well now, that we need to do more of in the future?
• Where do the risks lie?
• What HR issues may prevent us from getting to the future?
• What current systems will support or hinder our progress?

Step 3: Identify Gaps Between Future Needs & Present Capability

Compare your future HR needs from step 1 with your present HR capabilities from step 2, and identify any significant gaps that appear.

Gaps can develop in a number of areas including policies and procedures, capability, and resource allocation. Start with these questions:

• Where do significant gaps appear between the present and future?
• How can these gaps be classified?

Step 4: Formulate Gap Strategies

Next, work to develop strategies that will address the gaps you identified in Step 3. These gap strategies may affect:

• Job/Work Design
• Selection/Staffing
• Performance Management
• Compensation/Rewards
• Training/Development
• Employee Relations
• Safety and Health
• Workforce Diversity

Not all gaps will be of the same strategic importance, so you will need to set priorities for addressing them.

For example, imagine you discovered a need to update your HR information system. Investing in a new system would provide you with employee progress data that you deemed essential for your future company goals.

The need for an upgraded HR information system should be prioritized as urgent because it’s necessary to succeed in your long-term strategic plan.

Questions you can ask to help you determine the priority of your needs include:

• What are the top priorities?
• Where can we experience rapid progress?
• How do these strategies work with our budgets?
• What is the degree of change needed?

Step 5:  Share & Monitor The Plan

Sharing the Strategic HR Plan with your senior leadership and those connected to the HR function of your organization is a crucial component of its success. The more your team understands and supports the plan, the more empowered they will be to help the company achieve its goals.

It’s also important to monitor the progress of the Strategic HR Plan you develop and to communicate successes or modifications to your team.

At the very least, you should review the plan on an annual basis to verify that the goals on which the plan was based are still accurate and to make adjustments as needed.

Developing Your Plan

Developing a comprehensive Strategic HR Plan is an essential investment in helping your company achieve its goals.

A Strategic HR Plan aligns your corporate mission with your business plan, ensuring you have the capacity to deliver on strategy as you pursue your organization’s goals.

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Human resource (HR) strategy maximizes the potential of an organization’s human capital so it can achieve its broader business objectives. For some employers, however, transitioning HR from a purely transactional function to a strategic one can be challenging. But considering the competitive advantages enjoyed by talent-driven organizations, it’s an obstacle worth overcoming.

What is an HR strategy?

HR strategy is a roadmap for solving an organization’s biggest challenges with people-centric solutions. This approach requires HR input during policy creation and elevates the importance of recruitment , talent management , compensation, succession planning and corporate culture.

Why is HR strategy important?

Without strategy behind it, HR remains an administrative function and business growth may be hindered. Consider, for instance, two different companies that would like to expand into new markets.

One of them is strategic and gives HR a seat at the table from the very beginning. It researches locations that would be the most advantageous from an employment standpoint and then develops a long-term plan for networking highly-qualified, passive candidates in the chosen regions.

The other company takes transactional approaches to solving problems. Instead of including HR in its expansion discussions, it delegates a hiring manager to recruit candidates without knowing if the desired talent exists in that market or if the employment rules add a significant number of unexpected obstacles.

As the first example shows, when HR is involved and integrated at many levels of an organization, it can create a powerful advantage.

How to create a human resource strategy

Creating an HR strategy means taking a hard look at an organization’s strengths, weakness, opportunities and threats – a process also known as a SWOT analysis. Every business is different, but most follow these steps:

• Understand the business and its objectives Talk to people throughout the organization to gain a full understanding of the business’s past achievements, the products or services that it offers today, and what it hopes to accomplish in the future.
• Evaluate employee skillsets Review employee performance, resumes, project history and continuing education to assess the collective workforce skill level.
• Conduct a gap analysis Determine if employees have what they need to maximize their productivity or if investments in additional resources are necessary.
• Assess talent strategy Regularly auditing compensation, benefits, work environments and employee engagement can help employers compete for new talent and retain valued workforce members.
• Develop existing employees If any employees appear ready for new challenges or have skills outside their current role, create a development plan that will allow them grow to with the business.
• Limit turnover Get to the root cause of why people leave an organization and create a comprehensive plan to address the problem and prevent labor shortages.
• Plan ahead for succession Knowing which employees can easily fill other positions, should they become vacant, helps lessen disruptions when someone abruptly leaves the organization.
• Rely on analytics Compensation history, turnover rates, employee engagement and other HR metrics can guide strategic decisions.
• Create a mission and vision statement Mission and vision statements summarize the HR strategy and serve as a litmus test for all policies and decisions thereafter.

What are the benefits of strategic human resources planning?

One of the primary benefits of syncing HR strategy with broader business initiatives is that it helps organizations allocate budgets in ways that will maximize their return on investment (ROI). Employers who take this approach to HR, may also be able to:

• Reduce turnover
• Improve employee engagement
• Enhance productivity
• Attract superior talent
• Enact better policies
• Minimize business disruptions

Best practices for implementing an HR strategy

Everyone has fires to put out, which is why being proactive rather than reactive in the workplace does not always come naturally. The good news, however, is that HR experts have perfected some tried and true methods for implementing strategy effectively. Best practices are to:

• Involve key stakeholders Strategy requires collaboration. HR professionals should be involved from the beginning and managers and other senior leaders should sign-off on the plan.
• Know the budget Without funds to support it, HR strategy quickly becomes pie in the sky. Focus on initiatives that realistically fit within the organization’s budget.
• Remember the basics Do not overlook administrative responsibilities in favor of strategy. A compliance violation will derail any plan, no matter how grand it is.
• Recognize transactional solutions The quickest answer to a problem may not always be optimal in the long run. Make it a habit of acting strategically in every endeavor.
• Monitor and adjust the strategy Measure the strategy’s effectiveness over time with key performance indicators (KPIs). If something’s not achieving the desired results, revise it accordingly.

Frequently asked questions

What are strategic hr functions.

Examples of strategic HR functions include compensation planning, recruitment, succession planning and employee development.

What are four human resource strategies?

• Limit transactional problem solving
• Be proactive, rather than reactive
• Provide people-centric solutions to large-scale challenges
• Connect people who can solve each other’s problems

What are the types of HR strategy?

There are essentially two types of HR strategies – those that are overarching and those that are specific. Overarching strategies apply to the management of an organization’s people as a whole, while specific strategies address subsets of HR, like talent management or recruitment.

How do you develop a strategic HR plan?

A strategic HR plan can be created by thoroughly evaluating an organization’s strengths, weaknesses, opportunities and threats. This is known as a SWOT analysis. Once employers know this information, they can create realistic goals that account for what they do well and where they need improvement .

This article offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

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How to Create a Human Resource Department Annual Strategic Plan

Three key elements of the human resources planning model, ratio analysis formulas used in human resources.

• Role of HR in a Small Software Company
• How to Develop a Staffing Plan for a Business Organization

A strategic plan serves as a road map for an organization in terms of its vision, mission statement, core values, objectives and goals. It gives functional areas such as distribution, manufacturing, marketing, finance, operations, research and development and human resources a framework for contributing to goal achievement. It is within this framework that human resources must develop a strategic plan for what the authors of “Successful Strategic Human Resource Planning” call “people management” to ensure workforce availability, competency and competitiveness.

The planning process becomes smoother with preparation. During this preliminary “plan-to-plan” stage, individuals who will be involved, the project’s time frame, information needed and sources for that information are identified. Odds for success increase by devoting time to ensure that no one (customers, investors and employees) and nothing has been overlooked. Small businesses may opt to base their HR plan on a set number of quarters or on a half-year basis depending on growth projections and whether they are in the start-up stage.

Situation Analysis

The first step in writing a strategic human resource plan involves a thorough study of external factors affecting the business: economic conditions, political/legislative atmosphere, competitive climate, market conditions, industry outlook and trends in technology. This “environmental scanning” identifies threats the organization faces and opportunities to exploit.

Internal Analysis

The internal analysis centers on corporate culture, employee competencies and workforce composition by location in terms of workers with general knowledge versus specific skills, contract labor and what author and professor emeritus George W. Bohlander calls “alliance/partners” — those whose skills do not relate directly to the organization’s strategy. Taking stock of the human capital currently employed provides a foundation for determining future staffing needs.

Forecasting Demand

Forecasting encompasses labor demand and supply predictions to indicate any surplus or shortage that the HR strategic plan must address. Demand estimates must consider the organization’s objectives, business unit goals, budgets and historic turnover, absenteeism, retirement and attrition rates. A small business likely will use the qualitative method to forecast demand when it has little or no historical data, rather than crunch statistics. The qualitative method takes advantage of management expertise, intuition and prior experience to assess future employment needs.

Forecasting Supply

Supply estimates are based on labor market characteristics such as unemployment rate, demographic trends, government regulations, education levels and worker mobility. Small businesses should consult local, state and government agencies as sources if national and international data is not relevant to their situation.

Action Plans

The final step in writing a strategic human resources plan compares the current workforce inventory with the labor forecasts. Gaps related to skills, position types (e.g., managers, specialists, plant workers) and workforce size are addressed with action plans based on organizational structure, employee development, succession planning, outsourcing, recruitment and technology strategies.

• McGraw-Hill Management Tutor Series: Stages of the Strategic HRM Planning Process
• McGraw-Hill: “Strategic Planning for Human Resources;” Julie Bulmash et al.
• Google Books: “Managing Human Resources” 14th Edition; George W. Bohlander et al.
• HR Management: How Can HR Executives Better Align Their Efforts with Corporate Strategy?
• TLNT: Building a Strategic HR Plan-The Best Time You’ll Ever Invest in Your Team

Trudy Brunot began writing in 1992. Her work has appeared in "Quarterly," "Pennsylvania Health & You," "Constructor" and the "Tribune-Review" newspaper. Her domestic and international experience includes human resources, advertising, marketing, product and retail management positions. She holds a master's degree in international business administration from the University of South Carolina.

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All recruitment & job related queries answered, strategic human resource planning – definition, process and importance.

As said “well begun is half done” and the beginning of anything great starts with excellent planning as planning is the initial step in the area of management. To manage everything well in any organization, the key factor is to plan everything perfectly. Since human assets are the most precious assets in the organization based on whom the journey of success starts so planning them well becomes even more essential, and this prospective approach for the human resources is called Strategic Human Resource Planning.

What is Strategic Human Resource Planning?

Strategic HR planning is an essential component of HR management. Almost every sized organization has a strategic plan that guides the organization in successfully meeting its mission. Organizations regularly complete financial plans to ensure they achieve organizational goals, and while workforce plans are not as common. Strategic HR management is defined as “Integrating human resource management strategies and systems to achieve the overall mission, strategies, and success of the firm while meeting the needs of employees and other stakeholders.”

Strategic HR planning is a process that helps an organization to identify current and future human resources needs to achieve the end goals. It links human resource management to the overall strategic plan of an organization.

Importance of Strategic Human Resource Planning

1. clarifies the current scenario and indicates the loopholes.

HR planning strategy, start with where you currently are. Here are several questions that can be used for self-assessment in the course of Strategic Human Resource Planning which gives a clear picture of the present situation.

• What is going well right now?
• Where do struggle is the most?
• Which processes are running efficiently, and which ones are a constant pain?
• Where does the team spend most of its energy and time?
• Amount of manual tasks?

2. Helps in Future Anticipation

Success is not accidental. To keep moving forward and finish the race, you want to check out the long term and make a solid plan. Here are a few questions to consider when you predict the future to assure a brighter tomorrow:

• How do the current assets and liabilities align with your goals?
• Is welcoming new people feasible?
• How to retain your existing and new employees?
• Will a training strategy help your team build new competencies?

3. Helps to Incline with Market Trends

It’s possible to get lost in the ever-growing complexities in the market. Monitoring market trends and external factors are crucial elements of a strategic HR plan. The following questions will help to assess market conditions:

• How is the labour market doing?
• What are employees most likely to demand?
• Which technological changes will disrupt the industry?
• How is the economy expected to vary in the future? What impact will it leave?
• What are the government regulations you need to be aware of?

4. Assess the Workflows and the Delays

Strategic Human Resource plan is to perform an internal scan on tech, and other inventory.its must convert your strategic plan into action. These questions will help you evaluate the current HR technology:

• Is the current HR process capable of accomplishing strategic goals?
• What are the frequent bottlenecks within the present HR workflow?
• Is the current HR process plagued by errors?

5. Unleashing the Power of Automation in HR Planning

Strategic HR planning helps organizations absorb changes easily. However, before implementing strategic planning, eliminating the existing chaos in HR Processes is a must.

Strategic Human Resource Planning Process

The strategic HR Planning process has four steps:

• Assessing the current HR capacity
• Forecasting HR requirements
• Gap analysis
• Developing HR strategies to support organizational strategies

1. Assessing Current HR Capacity

Based on the organization’s strategic plan, the primary step within the strategic HR planning process is to assess the present HR capacity of the organization. The knowledge and skills of your current staff got to be identified. This can be done by developing a skills inventory for every employee. An employee’s performance assessment forms are often reviewed to work out if the person is prepared and willing to require more responsibility and to seem at the employee’s current development plans.

2. Forecasting HR Requirements

The next step is to forecast HR needs for the longer-term supported the strategic goals of the organization. Realistic forecasting of human resources involves estimating both to and fro. Questions to be answered include:

• How many staff are going to be required to realize the strategic goals of the organization?
• What skill sets will people need?

3. Gap Analysis

The next step is to determine the gap between where the organization wants to be in the future and where it is now. The gap analysis includes identifying the amount of staff and therefore, the skills required within the future as compared to the present situation. Gap analysis must encompass these below questions to be answered:

• What new skills will be required?
• Do our present employees have the required skills?
• Are employees currently in positions that use their strengths?
• Do we have enough managers/supervisors?

4. Developing HR Strategies to Support Organizational Strategies

There are mainly three HR strategies for meeting organization’s needs in the future:

Training and Development Strategies: This strategy includes:

• Providing staff with training to require new roles
• Providing current staff with development opportunities to organize them for future jobs in your organization

Recruitment Strategies: This strategy includes:

• Recruiting new staff with the skill that your organization will need within the future
• Considering all the available options for strategically promoting job openings and inspiring suitable candidates to use.

Outsourcing Strategies: This strategy includes external individuals or organizations to undertake and try to do some tasks. Many organizations look outside their staff pool and contract skills. This is incredibly helpful for accomplishing specific, specialized tasks. Each outsourcing decision has implications for meeting the organization’s goals and will, therefore, be carefully assessed.

Are you in the process of Strategic Human Resource Planning, end up with us? Zigsaw provides the best-outsourced recruitment service to fulfill organizational prospective goals. 

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