human resource aspects of business plan

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Management and Human Resources Business Plans

The management portion of your business plan, the hr portion of your business plan, frequently asked questions (faqs).

As a startup, it’s never easy to come up with a business plan, let alone the management and human resources sections of a business plan. Despite that, it’s important that you start your business plan for human resources as soon as possible. Doing so gives your management goals a plan that will guide you and keep your business on track as it grows. 

The key components of your human resources business plan should include your organizational structure, the philosophy and needs of your HR department, the number of employees you want to hire, how you plan to manage them, and all the estimated costs related with personnel.

You’ll want to start your HR business plan by outlining your own managerial experience and skills as well as those of your team. Highlight the roles of each member of your team, and any particular areas of strength or deficiency in your personnel lineup. For example, your HR team may be strong in compliance and conflict resolution but weak in hiring. 

Don't worry if you don’t have a complete team in place when you write your HR business plan. Simply use this section to outline the organizational structure along with job descriptions, how you plan to recruit key team members, and what their responsibilities will be.

This section should look like a pyramid with you at the top and will likely have lateral positions. Be as specific as possible when defining an employee's responsibilities because this is what will drive your business.

Do You Need an HR Manager?

If you’re a solo practitioner, you may not think of including an HR manager in your management business plan. However, if you expect to hire non-managerial employees (such as salespeople or clerical workers), you should consider recruiting a human resources manager.

If hiring a human resources manager can’t be done, consider a human resources consultant. Human resource management requires an immense amount of time and paperwork, and an experienced HR consultant will be able to quickly get your payroll and benefits program up and running, affording you more time to concentrate on growing the business. Human resource responsibilities should include:

• Handling FICA and unemployment taxes and paperwork
• Ensuring compliance with the Family and Medical Leave Act
• Staying on top of IRS filings

There are plenty of companies that offer HR management platforms tailored to each business's needs. Research these companies and be sure to include their estimated cost in your HR business plan.

When you develop the HR portion of your business plan, begin by including a brief overview of your HR strategy. Investors may be curious about how your payroll will be handled and the associated costs of administering it, as well as the type of corporate culture you plan to create. Specific items to highlight in the HR section include:

• Payscale: Show the salaries for managers and non-managers based on the market for those jobs.
• Vacation time: Describe your vacation-time policy. How much time do employees get? How quickly does it accrue? Vacation time is not required by law, but most firms offer vacation time to stay competitive and keep employees refreshed. 
• Insurance: Health insurance is a common staple benefit, although skyrocketing prices have forced many firms to cut back on this benefit. If you can’t afford a health plan, look into subsidizing one with employees paying the rest. Alternatively, inquire if a professional insurance representative can help you get a bulk rate.
• Additional benefits: Other things to consider include life insurance, a 401(k) and matching funds, bereavement leave, religious and floating holidays, and a bonus structure, if applicable.

In addition to the key elements above, it helps to have a framework from which to build your HR business plan. Here’s a basic outline that can help you get started: 

• Figure out what your human resources department would need. 
• Determine a strategy for recruiting talent.
• Formulate your hiring process. 
• Develop a training program for new employees. 
• Determine how much you want to pay your team (this is a good spot for payscale info)
• Create performance standards

It may be overwhelming to contemplate these benefits and their costs in the early stages of setting up your business, but in a competitive labor market, your firm needs to offer enough to entice qualified people and, more importantly, to keep them happy.

Consider revisiting your management and HR business plans every couple of years to see if you need to create action steps to refine your processes.

What should be in an HR business plan?

An HR business plan should include a mix of the steps you plan to take to launch an effective HR department, as well as specifics about how you plan to handle time off, insurance, and other benefits you plan to offer.

How do I write a human resources plan?

It helps to start with a simple framework. Try to break the plan down into sections: HR needs, recruitment, hiring, training, pay, and performance reviews. From there, incorporate other aspects of HR, like benefits and promotions.

U.S. Chamber of Commerce. " Does Your Small Business Need an HR Department? "

 University of Minnesota. “ Human Resources Management: 2.2 Writing the HRM Plan .”

Mecklenburg County, North Carolina. “ FY 2020-2022 Strategic Business Plan: Human Resources .”

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Blog Human Resources 6 Steps to Create a Strategic HR Plan [With Templates]

6 Steps to Create a Strategic HR Plan [With Templates]

Written by: Jessie Strongitharm Aug 25, 2022

The backbone of any successful business is the people and processes behind it — that’s why creating a human resources (HR) plan is key. This strategic document drives your business forward by evaluating where your workforce is at, and comparing it to future needs. 

Without an HR plan, organizations can suffer from issues that would have otherwise been avoided. From productivity pitfalls to costly employee turnover, there’s no shortage of risks you can sidestep if you do human resource planning in advance. 

Not sure where to start? No worries. I’ve outlined six steps you can take to create an effective HR plan that ensures your organization is well-staffed and well-served. You’ll also find a variety of  HR templates  that you can customize in just a few clicks — no design expertise required. 

Click to jump ahead:

What is human resource planning?

• Assess employees’ current skill levels
• Forecast your labor needs based on available information
• Revisit your organizational design
• Outline how you will manage, motivate and retain talent 
• Align your workforce planning with your budget 
• Establish KPIs for your human resource planning objectives

Human resource planning is the process of considering the current and future “people needs” of an organization.

This involves evaluating an organization’s workforce structure and protocols to ensure operational goals are met, productivity stays high and future demands for labor and talent can be fulfilled. 

The result of this process is the creation of an HR plan, which typically takes the form of a written document sometimes autogenerated using HR software . These documents tend to follow a similar structure to most  strategic business plans  and are created on an annual basis, by HR managers or company leaders.

Check out the template below for an example. 

This eye-catching, one-page  HR Strategic Plan Template  offers a concise summary of your human resource planning efforts, so you can easily share info with colleagues. 

Just swap out the text and visual assets for those of your choosing in  Venngage’s editor , and you’re off to the races. 

6 steps to create a strategic HR plan

Ready to create a strategic plan for the human resources that power your business? Here are six steps to help you succeed at the human resource planning process.

1. Assess current employees’ skill levels

The first step to creating a future-forward HR plan is to assess employees’ current skill sets, and compare them to your operational needs moving forward. This will help you identify gaps and inform any hiring of new employees.

Employees’ skill levels can be assessed by reviewing their work history, hard and soft skills and professional growth over time. 

Using a matrix is a great way to understand where the skill gaps in your current workforce exist. Below is an example that describes the skills needed for different marketing roles. 

Don’t need it for marketing specifically? No worries — you can fully customize this template by swapping in your own text to examine any human resource gaps. 

Another way to assess skills is by giving employees a questionnaire they can fill out. This  Employee Competency Assessment Template  does just that.

Based on the information collected, you’ll get a sense of what positions best suit each individual, and whether any upskilling or hiring is required. 

2. Forecast your labor needs based on available information

Next in your strategic strategic HR management plan, you’ll want to consider the future. This involves accounting for any upcoming changes to your workforce, so operations can continue without error.

When forecasting labor needs, the following should be considered: 

• Planned promotions
• Upcoming retirements 
• Layoffs 
• Personnel transfers 
• Extended leaves of absence (i.e. maternity/paternity leave) 

Beyond those, it’s a good idea to assess the impact of external conditions on your labor needs during your human resource planning. For example, new technological developments may decrease the amount of employees you require to operate your business. 

3. Revisit your organizational design

Organizational design is the process of structuring the way a business operates so it can best achieve its goals. This is hugely important when it comes to your human resource planning process! 

With a clear understanding of your organization’s strategic objectives in mind, reviewing your organizational design allows you to understand the staffing requirements you’ll need to succeed at them. This means taking into account your  organizational structure  and chains of command, as well as how work gets done and the way information flows.

 From there, you’ll be able to see which departments need more team members so it can accomplish the organization’s objectives. 

An easy way to get started is by using an organizational flow chart. 

With its color coding and layout, even a new manager can quickly look at this chart to identify the people responsible for leading teams and making decisions. 

And if there are any changes, it’s easy to to reflect them in the chart itself. All you need to do is customize the text and visual assets in  Venngage’s Chart Maker  as desired. 

Not quite your style? There’s plenty of other  organizational chart templates  to choose from. 

Here’s an organizational chart that’s perfect for small businesses that have limited employees. One quick look, and you’re good to go. 

The bottom line is, no matter how big or small your business may be, you should always revisit your organizational design to optimize your workforce management and business operations. 

Related:  Types of Organizational Structure [+ Visualization Tips]

4. Outline how you will manage, motivate and retain talent 

In this day and age, it’s a known fact that companies must provide more than just a paycheque to attract and retain talent, and encourage growth. 

It’s true —  studies have shown  employees are more engaged in their work when they feel it is meaningful, fulfilling and slightly challenging. So your human resource plan should consider how to inspire such feelings, and what actions you can take to motivate employees to stay. (Hint: a strong HR training and development program is key.)  

The  talent management infographic template  below is a great way to begin. 

Using this  process chart , you can detail the steps you’ll take to retain the talent you have. Reference it as needed in your human resource planning.

 Another great way to keep staff motivated and geared towards their professional growth is by coming up with  ideas for employee development . Facilitating a company culture that champions continuous learning guarantees your team will feel supported and challenged in all the right ways.

The two employee development plan templates below will help you do just that. 

Though both templates are geared towards healthcare organizations, it’s easy to customize their content in Venngage to promote the continuous learning and development of employees in any industry.

 As a result, your employees will be able to reach their full potential, while simultaneously supporting the long-term goals of your organization. 

Related:  6 Employee Development Ideas for Efficient Training

5. Align your workforce planning with your budget 

 Let’s face it, human resources ain’t cheap.

 Meaning, if you struggle at organizing and monitoring your HR budget, you’re bound to overspend on your initiatives —and no financially savvy business wants that. 

That’s why I recommend including financial information in your HR planning process, so you can reference your budget and expenses as needed. This includes not only hiring and training costs but also the complexities of managing a global payroll for diverse teams.

Ensuring this allows you to stay within range as you work towards achieving your strategic goals for human capital . Plus, you don’t need to use one that contains walls of text and wack-loads numbers. Check out the clean and cheery option below — it’s as easy to fill out as it is to understand. 

And if you’re looking to compare a forecasted budget to previous annual spending when strategizing your HR budget, the  Budget Comparison Infographic Template  below will help. 

The bar graph is a great  data visualization  of annual expenses, organized by category. Just add (or import) any values to Venngage’s editor, swap out the text, and you’re ready to compare with ease. 

Related:  10+ Expense Report Templates You Can Edit Easily

6. Establish KPIs for your human resource planning objectives

Measurable results are important when it comes to your HR planning processes, because they indicate whether your strategy is working or not. 

Keeping those metrics in mind, your company can make adjustments and improve upon any future plans — AKA strategize for future success in business. That’s why your human resource plan should include info re: the specific key performance indicators (KPI) you’ll be measuring. 

KPIs are established to help determine if HR strategies and plans are working. Much like those used for evaluating the performance of  marketing  or  sales plan , KPIs for human resources are measurable results that indicate an organization’s success at achieving predetermined goals.

These may take the form of headcounts, turnover rates, demographic information, time to hire and employee satisfaction scores. 

Here’s one employee satisfaction survey you can use to understand your workforce better. 

When you’re ready to organize those HR KPIs in a document, the  recruiting template  below is perfect for keeping tabs at a glance. 

Related:  10+ Customizable HR Report Templates & Examples

How do I make an HR plan? 

After you’ve collected the data you need, you’ll want to convey this info in an engaging, professional manner for easy referencing and sharing amongst colleagues. Given this, using Venngage is the best route to go. 

Here are the simple steps to help you bring an actionable HR plan to life: 

• Outline the information you would like to include in your strategic hr plan
• Pick the human resource planning templates that best suits your needs 
• Customize the templates’ text and visual assets so they speak to your organization 
• Apply your company’s brand guidelines with a few clicks using Venngage’s automated branding feature,  My Brand Kit
• Download and share as desired

Note: sharing is available free-of-charge. However, the option to download your creations and access features like  My Brand Kit and Team Collaboration  are available with a  Business plan . 

FAQ about HR plans

How long should an hr plan be .

There are no hard and fast rules when it comes to the length of an HR plan. That being said, if you’re going to share it with colleagues, you probably don’t want to create a 20+ page document. One to five pages should suffice. 

Try to be as concise as possible when relaying the facts, and use  data visualizations  wherever possible to save room.

Do I need an HR contingency plan?

In the same way creating an HR plan is a proactive move that helps your organization account for future needs, it’s a good idea to devise an HR contingency plan. This ensures there’s a back-up plan in place should your initiatives not go as expected. 

For example, if you’ve identified that you need five new hires to keep up with consumer demand, but the talent pool is lacking, a contingency plan could house suggestions for restructuring your workforce to mitigate this. 

In other words, it’s best-practice to hope for the best, but prepare for the worst. 

Is an HR plan different from an employee development plan?

Yes. While an HR plan is a strategic document describing how an organization addresses its personnel-related needs at a high-level, an  employee development plan  outlines the processes needed to help an individual achieve their professional goals.

 Even though the human resource planning process may involve outlining some employee development tactics, it is not unique to each employee as in the case of an employee development plan.

Make your HR planning processes effortless 

You don’t need a crystal ball to feel confident about your people moving forward. With a solid HR plan and strategy in place, you’ll prime your workforce — and all business endeavors — to succeed in even the most competitive of markets. 

Just remember this: human resources planning, and creating strategic business plans in general, doesn’t have to be exhausting. 

With Venngage’s huge selection of  professionally-designed templates  and easy-to-use editor, all it takes is a few minutes to produce a polished document perfect for all your needs.  Sign up for free today ! 

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HR Business Plan Template: Everything You Need to Know

With an HR business plan template, you can help your company recruit new employees, retain existing employees, and guide the development of the workforce. 4 min read updated on February 01, 2023

With an HR business plan template, you can help your company recruit new employees, retain existing employees, and guide the development of the workforce so that you collectively meet your business objectives, regardless of any changes in the industry or economy.

When creating your HR business plan, you need to perform a needs analysis of your workplace to tailor the plan to your company's requirements. You'll also need to learn about the industry standards for your field to make sure you're competitive.

Without such a plan in place, your workers will feel unprepared and won't know how to work towards your company's overall goals.

Steps for Developing a Human Resources Department Business Plan

There are several steps to creating an HR business plan. They include:

• Clarify the requirements . While you might be tempted to create a detailed plan that encompasses the entire company's next 10 years, hold off. Always talk with your boss to see how much detail he or she would like in the plan. This will save you time and help streamline the process. However, there's no harm in creating your own personalized strategic plan for your specific department.
• Read through the HR job descriptions . The HR department typically has employees such as HR assistants, HR generalists, and an HR director . Read through the job descriptions for each worker in the department and see what kind of duties are missing. Brainstorm additional functions that each job role could provide to the company.
• Curate your list . Take the different functions you've brainstormed and compare them to what each member of the HR department is already doing. Are there functions you could add or subtract from each employee for more productivity? You don't have to go into detail here, but just think about how you could improve each role.
• Schedule a meeting with the executives . Before you make any changes, you'll obviously need to get input and approval from the company's executives. They may have more feedback on how the HR department can provide additional services and support the company's overall goals and mission.
• Create a feedback form . Come up with a list of questions to ask leadership about HR's role in the company and provide it to them in advance of the meeting so they have time to think it over and talk with their staff. You may even want to provide a rating and ranking format for the questions, as this will make their responses easy to understand and implement. Overall, this is a key process to understanding what management and employees want and need from the HR department.
• Look at external resources . While the internal information you're collecting is the most important, it also doesn't hurt to take a look at data from professional organizations and websites, such as the Society for Human Resource Management , The Balance , or HR Magazine . You can also ask colleagues from other local organizations for tips on creating your business plan.
• Use this information to make a plan . With your ideas, feedback from executives, and tips from external resources, you should have a clear idea of what your plan should look like. The things that are missing from the HR department should now be clear, and this should guide you on what to focus on to improve HR's contribution to the company.
• Identify goals for this year and next . While your plan can have long-term goals, keep the majority of them a little bit shorter in scope to see how things work out. This gives you the chance to reorganize and restructure if things aren't going right. Consider creating a list of accomplishments you can reach for the end of this year and into the next.

A Real Life Example

If you're seeking more guidance on how to create a successful HR business plan, look to Starbucks as an example.

As the world's largest coffee chain, Starbucks had $21.3 billion in sales in 2016.

Despite these massive numbers, Starbucks maintains the same approach to their human resources department. All of the HR planning is guided by the company's organizational strategy and brand.

Their strategy is to use specific interview techniques when hiring new employees. This lets them identify potential leaders and place them in a "New Partner Orientation and Immersion" training program. With this system, Starbucks has achieved the lowest employee turnover rate in the quick-service restaurant industry.

Starbucks also offers numerous employee perks and dedicates a lot of time to employee training through an online portal that teaches employees essential job skills.

If you need help with your HR business plan template, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

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• LLC Business Plan Template
• Details of a Business Plan
• Business Plan Management Structure: What You Need to Know
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• Service Business Plan
• Creating a Business Plan

• Human Resource Planning (HRP)

Written by True Tamplin, BSc, CEPF®

Reviewed by subject matter experts.

Updated on July 12, 2023

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Table of contents, what is human resource planning (hrp).

Human Resource Planning (HRP) is the process of systematically analyzing and forecasting an organization's current and future human resource needs, and developing strategies to meet those needs.

This involves identifying the right number of employees with the appropriate skills, knowledge, and experience to effectively accomplish the organization's goals and objectives.

HRP is a crucial component of business planning and finance, as it ensures that an organization's workforce is aligned with its strategic direction and can adapt to changes in the business environment.

HRP directly impacts an organization's ability to achieve its goals and objectives by ensuring that the workforce is well-prepared, skilled, and motivated.

HRP also contributes to the financial health of a company by optimizing workforce productivity, minimizing costs associated with hiring and training, and reducing employee turnover.

Additionally, effective HRP enables businesses to respond more quickly and efficiently to changes in the external environment, such as technological advancements, economic fluctuations, and shifting market demands.

This adaptability is crucial for maintaining a competitive advantage and achieving long-term success.

The HRP Process

Environmental scanning.

The HRP process begins with environmental scanning, which involves collecting and analyzing information about the internal and external factors that may impact an organization's workforce.

This can include examining economic trends, technological advancements, demographic changes, industry competition, and government regulations, as well as assessing the company's internal strengths, weaknesses, opportunities, and threats (SWOT analysis).

By conducting a thorough environmental scan, organizations can gain valuable insights into the factors that may affect their workforce and identify potential opportunities and challenges that need to be addressed through HRP.

Forecasting

Forecasting is a critical step in the HRP process, as it involves estimating the future demand for and supply of human resources within the organization.

This includes predicting the number of employees needed, the types of skills and competencies required, and the availability of internal and external talent to meet these needs.

Forecasting can be accomplished through various methods, such as trend analysis, regression analysis, or expert judgment.

Accurate forecasting is essential for developing effective HRP strategies and ensuring that the organization has the right people in the right roles at the right time.

Job Analysis

Job analysis is the process of collecting, analyzing, and documenting information about the tasks, duties, and responsibilities of each job within an organization.

This information is used to create detailed job descriptions and specifications, which are essential for HRP as they provide a clear understanding of the skills, knowledge, and abilities required for each role.

A thorough job analysis helps organizations identify the competencies needed to perform each job effectively and serves as a foundation for workforce planning, recruitment, training, performance management, and career development initiatives.

Supply Analysis

Supply analysis involves assessing the current workforce's skills, knowledge, and abilities to determine whether the organization has the necessary human resources to meet its strategic objectives.

This includes evaluating the number of employees, their skills and competencies, and their potential for growth and development.

By conducting a supply analysis, organizations can identify existing talent gaps and develop targeted strategies to address them, such as training and development programs, succession planning , or external recruitment.

Demand Analysis

Demand analysis focuses on estimating the organization's future human resource requirements based on its strategic goals and objectives.

This involves projecting the number of employees needed, the skills and competencies required, and the anticipated changes in workforce composition due to factors such as turnover, retirements, and promotions.

A comprehensive demand analysis enables organizations to develop targeted HRP strategies that align their workforce with their strategic direction and ensure they have the right people in place to achieve their goals.

Gap Analysis

Gap analysis is the process of comparing the organization's current human resource supply with its future demand to identify any discrepancies.

This includes evaluating the differences in the number of employees, skills, and competencies required to meet the organization's strategic objectives.

By conducting a gap analysis, organizations can determine whether they have a surplus or shortage of human resources and develop appropriate strategies to address these gaps.

This can include recruitment and hiring initiatives, training and development programs, or workforce restructuring efforts.

Action Planning

Action planning is the final step in the HRP process, which involves developing and implementing strategies to address the identified gaps between the current workforce supply and future demand.

This can include initiatives such as recruiting new employees, providing training and development opportunities for existing staff, implementing succession planning, or adjusting organizational structures to better align with strategic objectives.

Effective action planning requires ongoing monitoring and evaluation to ensure that the HRP strategies are achieving the desired results and that the organization remains well-prepared to respond to changes in its internal and external environment.

Benefits of HRP

Improved workforce productivity.

By ensuring that the organization has the right number of employees with the appropriate skills and competencies, HRP helps to optimize the use of human resources and enables employees to work more efficiently and effectively.

This increased productivity can lead to higher levels of employee engagement, job satisfaction, and overall organizational performance, ultimately contributing to the company's bottom line.

Cost Savings

HRP can result in significant cost savings for organizations by helping to minimize expenses associated with hiring, training, and retaining employees.

Through effective workforce planning, companies can reduce the costs of recruiting and onboarding new staff, as well as the expenses associated with high employee turnover, such as lost productivity and the need for additional training.

Additionally, HRP can help organizations identify opportunities for streamlining their workforce and eliminating redundancies, leading to further cost savings and improved operational efficiency.

Reduced Employee Turnover

Effective HRP can contribute to reduced employee turnover by ensuring that the organization has the right people in the right roles and that employees are provided with the necessary support and development opportunities to succeed in their positions.

By fostering a positive work environment and promoting employee engagement, HRP can help to improve job satisfaction and employee retention, ultimately reducing the costs associated with high turnover rates.

Increased Flexibility and Adaptability

HRP enables organizations to be more flexible and adaptable in the face of changing market conditions, technological advancements, and other external factors.

Through effective workforce planning, companies can quickly adjust their human resource strategies to respond to emerging trends and capitalize on new opportunities.

This increased agility is essential for maintaining a competitive advantage and ensuring long-term success in today's rapidly evolving business environment.

Better Risk Management

HRP plays a crucial role in risk management by helping organizations identify and address potential workforce-related risks, such as skill gaps, labor shortages, or an aging workforce.

By proactively addressing these risks through targeted HRP strategies, companies can mitigate potential negative impacts and ensure the continued success of their operations.

Challenges of HRP

Uncertainty.

Uncertainty is a significant challenge in HRP, as organizations must make predictions about future workforce needs based on a variety of factors, such as economic trends, technological advancements, and competitive pressures.

These factors are often unpredictable and subject to change, making it difficult for companies to accurately forecast their human resource requirements.

To address this challenge, organizations can leverage scenario planning techniques and continually update their HRP strategies as new information becomes available.

Resistance to Change

Employees may be reluctant to embrace new organizational structures, job roles, or training programs, which can impede the organization's ability to achieve its workforce planning goals.

To overcome this challenge, organizations should involve employees in the HRP process, clearly communicate the reasons for change, and provide adequate support and resources to help staff adapt to new roles and responsibilities.

Lack of Resources

The lack of resources, including time, funding, and personnel, can pose a significant challenge to implementing effective HRP strategies.

Organizations may struggle to allocate the necessary resources for workforce planning initiatives, particularly in times of financial constraints or competing priorities.

To address this challenge, organizations should prioritize HRP as a critical component of their overall business strategy and invest in the necessary resources to ensure its successful execution.

Inaccurate Forecasting

Inaccurate forecasting can undermine the effectiveness of HRP efforts by leading to imprecise estimates of future workforce needs. This can result in talent shortages or surpluses, which can negatively impact organizational performance and employee satisfaction.

To improve the accuracy of their forecasting efforts, organizations can leverage a variety of forecasting techniques, such as trend analysis, regression analysis, or expert judgment, and continually update their projections based on the latest available data.

Inadequate Data Analysis

Inadequate data analysis can hinder the effectiveness of HRP efforts by preventing organizations from identifying and addressing critical workforce gaps and opportunities.

This can result in suboptimal HRP strategies that fail to align the workforce with the organization's strategic objectives.

To overcome this challenge, organizations should invest in robust data collection and analysis tools, as well as develop the necessary skills and expertise within their HR teams to effectively analyze and interpret workforce data.

Best Practices in HRP

Involvement of top management.

Gaining the commitment and support of senior leaders is essential for the successful implementation of HRP initiatives, as it helps to ensure that workforce planning is prioritized and integrated into the organization's overall business strategy.

Collaboration Between HR and Other Departments

By working together, HR professionals and departmental leaders can share insights, resources, and expertise to develop and implement targeted HRP strategies that align the workforce with the organization's strategic objectives.

Use of Technology

Leveraging technology is a best practice in HRP, as it enables organizations to streamline and automate various aspects of the workforce planning process, such as data collection, analysis, and reporting.

By utilizing advanced HR software and analytics tools, companies can gain valuable insights into their workforce and make more informed decisions regarding their HRP strategies.

Regular Review and Update of HRP

Regular review and update of HRP strategies are essential for ensuring their ongoing effectiveness in the face of changing business conditions and workforce dynamics.

Organizations should continually monitor and evaluate their HRP efforts, making adjustments as needed based on new information, emerging trends, and shifting priorities.

Integration With Overall Business Strategy

Finally, HRP should be fully integrated with the organization's overall business strategy. This helps to ensure that workforce planning initiatives are aligned with the company's strategic objectives and that the organization has the necessary human resources to achieve its goals.

The Bottom Line

Human Resource Planning (HRP) is the systematic process of analyzing and forecasting an organization's current and future human resource needs and developing strategies to meet those needs.

It plays a critical role in aligning the workforce with the organization's strategic objectives and ensuring its long-term success.

The HRP process involves several key steps, including environmental scanning, forecasting, job analysis, supply analysis, demand analysis, gap analysis, and action planning.

Each of these steps plays a crucial role in identifying the organization's workforce needs and developing targeted strategies to address them.

To ensure the success of HRP initiatives, organizations should adhere to best practices, such as involving top management, fostering collaboration between HR and other departments, leveraging technology, regularly reviewing and updating HRP strategies, and integrating HRP with the overall business strategy.

By understanding and effectively implementing the HRP process, organizations can optimize their workforce, manage risks, and ensure their long-term success in today's competitive business environment.

Human Resource Planning (HRP) FAQs

What is human resource planning (hrp).

Human Resource Planning (HRP) is the process of forecasting future human resource needs and developing strategies to meet them.

Why is HRP important for business planning?

HRP helps businesses ensure that they have the right people with the right skills in the right positions at the right time to achieve their strategic objectives.

What is the HRP process?

The HRP process typically involves environmental scanning, forecasting, job analysis, supply and demand analysis, gap analysis, and action planning.

What are the benefits of HRP?

The benefits of HRP include improved productivity, cost savings, reduced employee turnover, increased flexibility, and better risk management.

What are some challenges associated with HRP?

Some challenges associated with HRP include uncertainty, resistance to change, lack of resources, inaccurate forecasting, and inadequate data analysis.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide , a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University , where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon , Nasdaq and Forbes .

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Human Resource Planning (HRP) Meaning, Process, and Examples

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is the continuous process of systematic planning to achieve optimum use of an organization's most valuable asset—quality employees. Human resources planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.

There are four key steps to the HRP process. They include analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and supporting organizational goals. HRP is an important investment for any business as it allows companies to remain both productive and profitable.

Key Takeaways

• Human resource planning (HRP) is a strategy used by a company to maintain a steady stream of skilled employees while avoiding employee shortages or surpluses.
• Having a good HRP strategy in place can mean productivity and profitability for a company.
• 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.

Michela Buttignol

What Is Human Resource Planning (HRP) Used For?

Human resource planning allows companies to plan ahead so they can maintain a steady supply of skilled employees. The process is used to help companies evaluate their needs and to plan ahead to meet those needs.

Human resource planning needs to be flexible enough to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term. HRP starts by assessing and auditing the current capacity of human resources.

Here, identifying a company's skill set and targeting the skills a company needs enables it to strategically reach business goals and be equipped for future challenges. To remain competitive, businesses may need advanced skills or to upskill their employees as the market environment evolves and changes.

To retain employees and remain competitive, HRP often looks at organizational design, employee motivation, succession planning, and increasing return on investment overall.

Challenges of Human Resource Planning (HRP)

The challenges to HRP include forces that are always changing. These include employees getting sick, getting promoted, going on vacation, or leaving for another job. HRP ensures there is the best fit between workers and jobs, avoiding shortages and surpluses in the employee pool.

To help prevent future roadblocks and satisfy their objectives, HR managers have to make plans to do the following:

• Find and attract skilled employees.
• Select, train, and reward the best candidates.
• Cope with absences and deal with conflicts.
• Promote employees or let some of them go.

Investing in HRP is one of the most important decisions a company can make. After all, a company is only as good as its employees, and a high level of employee engagement can be essential for a company's success. If a company has the best employees and the best practices in place, it can mean the difference between sluggishness and productivity, helping to lead a company to profitability.

What Are the Four Steps to Human Resource Planning (HRP)?

There are four general, broad steps involved in the human resource planning process. Each step needs to be taken in sequence in order to arrive at the end goal, which is to develop a strategy that enables the company to successfully find and retain enough qualified employees to meet the company's needs.

Analyzing labor supply

The first step of human resource planning is to identify the company's current human resources supply. In this step, the HR department studies the strength of the organization based on the number of employees, their skills, qualifications, positions, benefits, and performance levels.

Forecasting labor demand

The second step requires the company to outline the future of its workforce. Here, the HR department can consider certain issues like promotions, retirements, layoffs, and transfers—anything that factors into the future needs of a company. The HR department can also look at external conditions impacting labor demand , such as new technology that might increase or decrease the need for workers.

Balancing labor demand with supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis that lays out specific needs to narrow the supply of the company's labor versus future demand. This analysis will often generate a series of questions, such as:

• Should employees learn new skills?
• Does the company need more managers?
• Do all employees play to their strengths in their current roles?

Developing and implementing a plan

The answers to questions from the gap analysis help HR determine how to proceed, which is the final phase of the HRP process. HR must now take practical steps to integrate its plan with the rest of the company. The department needs a budget , the ability to implement the plan, and a collaborative effort with all departments to execute that plan.

Common HR policies put in place after this fourth step may include policies regarding vacation, holidays, sick days, overtime compensation, and termination.

What Is the Goal of Human Resource Planning (HRP)?

The goal of HR planning is to have the optimal number of staff to make the most money for the company. Because the goals and strategies of a company change over time, human resource planning must adapt accordingly. Additionally, as globalization increases, HR departments will face the need to implement new practices to accommodate government labor regulations that vary from country to country.

The increased use of remote workers by many corporations will also impact human resource planning and will require HR departments to use new methods and tools to recruit, train, and retain workers.

Why Is Human Resource Planning Important?

Human resource planning (HRP) allows a business to better maintain and target the right kind of talent to employ—having the right technical and soft skills to optimize their function within the company. It also allows managers to better train the workforce and help them develop the required skills.

What Is "Hard" vs. "Soft" Human Resource Planning?

Hard HRP evaluates various quantitative metrics to ensure that the right number of the right sort of people are available when needed by the company. Soft HRP focuses more on finding employees with the right corporate culture, motivation, and attitude. Often these are used in tandem.

What Are the Basic Steps in HRP?

HRP begins with an analysis of the available labor pool from which a company can draw. It then evaluates the firm's present and future demand for various types of labor and attempts to match that demand with the supply of job applicants.

The Bottom Line

Quality employees are a company's most valuable asset. Human resource planning involves the development of strategies to ensure that a business has an adequate supply of employees to meet its needs and can avoid either a surplus or a lack of workers.

There are four general steps in developing such a strategy: first, analyzing the company's current labor supply; second, determining the company's future labor needs; third, balancing the company's labor needs with its supply of employees; and fourth, developing and implementing the HR plan throughout the organization.

A solid HRP strategy can help a company be both productive and profitable.

International Journal of Business and Management Invention. " Human Resource Planning-An Analytical Study ," Page 64.

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Human Resource Planning: Definition & Top Strategies

Lucija Bakić

April 4, 2024

Human resource planning is a key strategy for ensuring long-term business sustainability and resilience.

In this guide, we’ll explore the essentials of human resource planning (HRP), why it’s so important, and the best practices to start your human resource planning process. To learn more about the broader process of resource management, read our guide to business resource planning . Key Takeaways

• HRP is a process that ensures that companies have enough capacity to meet customer demands and business goals.
• The main steps of the process include analyzing current availability, forecasting future demand, identifying capacity gaps, and developing and monitoring HRP strategies.
• Some of the main challenges include ensuring the accuracy of your forecasting with reliable data, maintaining the balance between billable work and capacity building initiatives, and promoting collaboration and transparency. 
• The right capacity planning solution can help you address the above with automation features, real-time data, and predictive analytics.

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is a process used to ensure that businesses have employees with the right skills, at the right time, and with the appropriate capacity to meet strategic goals.  Some practical examples of HRP workflows for various businesses include:

• An e-commerce business forecasting the need for IT capacity increases according to seasonal trends and scaling their infrastructure and support team.
• A design agency identifying higher demand for digital media through benchmarking and developing strategies to upskill and reskill its employee pool.
• A law firm initiating a succession planning strategy for the impending employee retirements by developing internal leadership candidates and recruiting external talent.

Why Is HRP Important? Top 4 Benefits

According to research by the Work Institute, 78% of the reasons for voluntary turnover could have been prevented by the employer if identified and addressed on time.  Human resource planning helps businesses increase employee engagement and drive various improvements by:

1. Maintaining a Qualified Workforce

HRP aligns talent capabilities with organizational goals through talent acquisition, training, and development initiatives. Ensuring you have a skilled workforce to meet future workforce requirements reduces the risk of inefficient workflows and supports daily business operations. Investing in employee talent and skills can also help increase employee engagement and satisfaction.

2. Improving Risk and Change Management

HRP is a proactive approach that focuses on identifying issues before they occur. Analyzing trends and forecasting future needs helps businesses create contingency plans for various scenarios. This can include high-impact external changes, such as technological advancements, or internal disruptions, like leadership transitions.

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3. Ensuring Your Business Is Competitive

HRP keeps businesses competitive by helping them attract the right talent and ensuring that current employees are skilled and engaged in the workplace. It helps companies adapt to changes quickly and efficiently, fostering the agility and proactiveness needed to stay ahead of industry trends and competitors. See more : The Top 13 Benefits of ERP

4. Optimizing Workforce Costs

HRP optimizes business costs by providing balanced employee utilization so that your agency isn’t spending excess money on non-productive labor costs. It also ensures that your business can do more work with adequate supply. Finally, HRP reduces the chance of unexpected resource gaps through effective forecasting, minimizing the need for last-minute hiring or overtime work. Related: Operations Strategy Examples

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The Main Steps of Human Resources Planning

The key steps of HRP include:

• Workforce analysis to determine your company’s current human resource capacity.
• Demand forecasting to future resource demand based on industry trends and internal needs.
• Gap analysis includes finding potential roadblocks in your HRP process and developing strategies to address them.
• Implementation and monitoring of your human resource strategies, usually by tracking key performance indicators.

Analyzing Current Availability

Workforce analysis involves a comprehensive evaluation of the current workforce’s size, skills, and capabilities. It assesses aspects such as:

• Employee productivity
• Job satisfaction
• Skill sets, including technical and soft skills
• Turnover rates

These metrics are used to identify your organization’s strengths and weaknesses. This is the foundation on which you’ll develop actionable steps to improve your HRP processes.

The utilization rate is the key metric for visualizing productivity — use Productive for real-time insights

Projecting Future Demand

Projecting future demand involves estimating the human resource requirements needed for an organization to meet its future goals. This forecast considers factors such as business growth, market expansion, technological advancements, and changes in operational processes. Three tools that are used in this process are:

• Ratio analysis , where historical data on the relationship between business metrics and workforce size is used to predict future staffing needs.
• Trend analysis , which examines patterns in the organization’s workforce data over time.
• Comparative analysis, whether by comparing internal resource planning practices across multiple projects or benchmarking your performance against competitors.

Another potential strategy is utilizing real-time data, such as forecasting charts that depict the impact of resource scheduling on agency analytics.

Productive’s forecasting charts let you predict your company’s revenue and profit margins

Gap Analysis

Gap analysis compares future human resource needs against the current workforce’s capabilities to identify discrepancies or gaps. A way to conduct gap analysis is to monitor where previous projects went wrong to pinpoint inefficiencies in your workflows, such as miscommunication or a deficit of specific skills. You can do this by checking estimated vs real completion times for various tasks — ERP solutions can deliver these insights with time tracking features.  Then, by examining your upcoming projects or initiatives, you can identify and forecast potential areas where similar imbalances may occur.

Developing and Implementing Strategies

The final step is developing and implementing HR strategies to cover your company’s specific needs and requirements. These strategies may include:

• Creating a resource plan:  A resource plan is an in-depth document that contains information on your employees, their availability, and their scheduled time. It helps businesses follow strategic objectives and monitor their ongoing processes.

Get an in-depth overview of your business resources and their availability

• Employee engagement and retention strategies:  For example, drafting career development plans, introducing new benefits packages and competitive compensation, and promoting a healthy organizational mindset.
• Implementing modern software: Resource planning tools can support various steps of the HRP process, with features such as time off management, billable hours tracking, financial forecasting, real-time reporting, workflow automations, and more.

Best Practices for Effective HRP

Once you’ve pinpointed potential gaps and developed strategies to drive improvements, what are some best practices to ensure they stick?

Monitoring Your Progress

Whichever initiatives you decide to implement, monitoring them through capacity management metrics is necessary to assess their effectiveness. However, keep in mind that while business metrics are important, some benefits of HRP may be hard to quantify. This includes better work-life balance and improved working environment.

Regular Review

HRP can take a long time to provide results. Agility and flexibility are needed to make sure that your strategies can stay aligned with changing business needs and priorities. Regular review helps identify where your strategies have gone off track to implement timely changes.

Continuous Improvement

HRP is an ongoing process. As such, your strategies will need to evolve alongside your business goals and circumstances. Incremental improvements are always better than sudden, expansive changes — consistently seeking feedback and analyzing outcomes is a way to ensure your HRP strategies remain effective over time.

Types of HR Planning 

There are different types or techniques associated with HR planning. Here are some common terms and how you can differentiate them:

Hard vs Soft HR Planning

• Hard HR Planning focuses on quantitative aspects of human resource management, such as headcount, costs, and labor allocation. This approach often involves in-depth data and forecasting for informed decision-making.
• Soft HR Planning  considers qualitative factors of workforce management, such as engagement, development, and well-being. It’s less focused on data and more on fostering a committed and resilient workforce.

Short-Term vs Strategic HRP

• Short-term HRP is more of a reactive approach that addresses immediate staffing needs and focuses on resolving urgent issues. It typically spans a timeframe of up to one year.
• Strategic HRP is a long-term approach that aligns workforce planning with the organization’s future goals and strategies. It involves forecasting workforce requirements, sustainable talent management, and other proactive strategies for business success.

Employee Reskilling vs Upskilling

• Reskilling involves training employees in new skills and capabilities to help them transition to different roles within the company.
• Upskilling focuses on enhancing the current skills and competencies to improve performance, stay competitive, and meet job requirements.

See more : Capacity Building 101

Future Trends in HR Planning

• Remote work is here to stay. According to survey results, 63% of professionals are willing to take a pay cut to work remotely (FlexJobs). If possible, consider including it as one of your benefits to drive a competitive advantage.
• In general, employee well-being initiatives are becoming more and more popular. This can include more flexible hours, hybrid or remote work, health insurance plans, as well as various fitness and wellness programs (learn more about workload management ).
• 72% of professionals agree that all forms of skill-based hiring are more effective than resumes. While the resume is still used to filter the pool of applicants, work-related tasks and technical questions have proven to be the more efficient and cost-effective way of hiring candidates (Test Gorilla).
• When it comes to daily workflows, 60% of professionals believe that automation helps them fight burnout and work-related stress. It allows for a more flexible work schedule, helps them be more organized at work, frees up their tasks for work they enjoy, and more (Zapier). Consider tools that can provide no-code automations to streamline day-to-day work.

The Challenges of Human Resource Planning

Now that we’ve gone through the main steps of the HRP, it’s time to address some of its main challenges:

• Accurate forecasting:  Predicting future needs accurately can be a challenge in itself. Not only does it require having an in-depth understanding of your business circumstances, but it’s also sensitive to changes in market demand and economic conditions.
• Maintaining a flexible workforce: Maintaining a versatile and skilled workforce requires careful management of work hours. This ensures that profitability isn’t compromised, and at the same time, avoids situations where training is neglected entirely for billable work. This balance between billable and non-billable time is crucial for sustainable organizational success.
• Aligning HR Strategy with Business Goals : Keeping track of the overarching business strategy in HRP can be hard, especially in large or rapidly evolving organizations. It requires transparent communication, cross-functional collaboration, and a deep understanding of the organization’s long-term objectives and the role of the workforce in achieving them.

The Solution: Utilizing Software for Enhanced HR Planning

A way to address these potential challenges is using tools with HR and resource management capabilities .  Modern software provides a way to visualize and forecast employee hours, activities, and their impact on business financials for more informed decision-making. It also helps businesses view project progress in real time to streamline stakeholder collaboration.

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An example of such a tool is Productive , with key HRP features including:

• Time tracking
• Resource scheduling
• Workload balancing
• Time off management
• Financial forecasting

Book a demo today to discover how Productive can help drive efficient human resource management.

What is meant by human resource planning?

Human resource planning (HRP) is the strategic process of ensuring your business has the correct number of skilled employees to meet company goals. It involves talent management, employee performance and data analysis, needs forecasting, and more.

What are the 5 steps in human resource planning?

The five main steps of human resource planning include identifying current organizational availability, demand forecasting, capacity gap analysis, strategy development and implementation, and results monitoring and analysis.

What are the 3 key areas of human resources planning?

The 3 key areas of human resource planning (HRP) include workforce forecasting, talent management, and gap analysis. Workforce forecasting involves analyzing current availability and predicting the future needs of the workforce. Talent management encompasses various strategies, from recruitment, training, and development to succession planning. Gap analysis involves pinpointing areas of improvement by identifying where capacity fell short of meeting demand (skills, quantity, time, etc.).

Why is human resources planning important?

Human resource planning (HRP) is important because it ensures that the workforce is aligned with the organization’s strategic goals. It helps businesses get the most out of their human resources, both by improving acquisition strategies, developing current talent, and increasing retention. HRP also supports organization agility, flexibility, and resilience by building a well-skilled and satisfied workforce.

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Human Resource Planning: Definition, Objectives, And Steps

• Employee Management , Templates & Guides

Human resource planning is an essential part of every successful business. Unfortunately, many managers neglect this vital practice for other, easier tasks because they don’t understand what this type of planning requires.

Other times, managers may not understand how pivotal human resource planning is to their long-term corporate strategy  and the ultimate success of their business.

That’s where Sling  can help. In this article, we define human resource planning, outline its objectives, and provide a step-by-step guide to implementing this crucial practice in your business.

Table Of Contents

Human Resource Planning Defined

Human resource planning objectives, hrp vs. shrm, hrp and organizational strategy, steps in human resource planning, why human resource planning is important, challenges of human resource planning, scheduling and communication for effective hrp.

Human resource planning (or HRP for short) is the ongoing process of systematically planning ahead to optimize and maximize your business’s most valuable asset — high-quality employees .

When you incorporate HRP into every aspect of your strategy — functional , business , or organizational  — you streamline the process of creating the best fit between available jobs and available employees. All while avoiding a shortage or surplus in your workforce.

As simple as that may sound, there’s more to human resource planning than setting up a system and implementing it in your organization.

The objectives of HRP are very specific and can mean the difference between success or stagnation. We’ll discuss those objectives in the next section.

As we mentioned earlier, human resource planning is about matching the right employees with the right jobs in your business.

You can do this while interviewing  prospective employees, or even during the performance review  of a long-time team member who is reaching out for more responsibility.

While matching employees to jobs is a big part of human resource planning, the goals of HRP don’t stop there. Other HRP objectives include:

• Adapting to rapid technology  changes
• Powering product innovation
• Adjusting to a more globalized economy
• Preparing for generational and cultural  shifts
• Anticipating job and skill changes
• Facilitating growth
• Improving business operations
• Mitigating risk
• Preventing talent shortage or surplus
• Complying with local, state, and federal regulations
• Implementing a successful onboarding process

As you can see, HRP is integral to the successful operation of your business and its growth over both the short- and long-term.

Because this process is connected to every aspect of your business , you may feel overwhelmed by the prospect of creating a new HRP strategy.

Don’t let this prevent you from implementing a system that can revolutionize the way your business operates — both now and in the future .

Keep in mind that human resource planning doesn’t have to address all of the objectives on this list from the moment it goes into effect. Start small and expand into different areas once you’ve addressed one or two objectives.

Later on in this article, we discuss a step-by-step method for producing a human resource planning strategy for your business.

But, first, let’s take a moment to discuss one of the most-confused aspects of human resource planning: how it differs from strategic human resource management.

Before we delve into the minutiae of human resources , let’s put the two relevant definitions side-by-side to see how they compare.

Human Resource Planning : HRP is the ongoing process of systematically planning ahead to optimize and maximize your business’s most valuable asset — high-quality employees.

Strategic Human Resource Management : SHRM is a holistic approach to assembling the best team for your business’s growth and success.

At first glance, it may appear that human resource planning is the same thing as strategic human resource management under a different name. They seem so similar because one is actually part of the other.

In this case, HRP is a small part of SHRM. Viewed from a different perspective, SHRM contains and governs HRP.

It’s very much like a set of nesting dolls: the smallest one (HRP) fits nicely into the next largest (SHRM), which, in turn, fits into the next largest, and so on.

For practical purposes, it helps to think about human resource planning as the frontline, boots-on-the-ground application, while strategic human resource management is the guiding principle behind those applications.

In other words, SHRM is the why to HRP’s what.

Another way to think about SHRM and HRP is to view your business as a large, complicated machine.

Human resource planning is one component (a gear, for example) that works with other similar components (e.g., production, logistics, shipping, management, etc.) to keep the machine running.

Strategic human resource management, on the other hand, takes a step back and analyzes the machine itself.

SHRM looks at the performance of each component (each department in your business), how they work together to make everything run smoothly, and what the business as a whole can do to improve.

Let’s return, for a moment, to the example of the nesting dolls mentioned earlier.

We established that human resource planning is the smallest doll and that strategic human resource management is the next largest doll. But what comes after that?

What’s the next largest doll in the series? Organizational strategy.

Organizational strategy , at its most basic, is a plan that specifies how your business will allocate resources to support infrastructure, production, marketing, inventory , and other business activities.

How does this affect human resource planning? Organizational strategy directs strategic human resource management directs human resource planning.

In many ways, the strategy side of your business mirrors the relationship between SHRM and HRP.

Organizational strategy is subdivided into three distinct categories: corporate strategy, business strategy, and functional strategy. Just like SHRM and HRP, each level is a part of the one above it.

Corporate level strategy is the main purpose of your business — it’s the destination toward which your business is moving.

Business level strategy is the bridge between corporate level strategy and much of the “boots-on-the-ground” activity that occurs in functional level strategy.

Functional level strategy is the specific actions and benchmarks you assign to departments and individuals that move your business toward the goals created by your corporate level strategy. They are a direct offshoot of your business level strategies.

With those categories in mind, we start to see the bigger picture of your business. SHRM is a component of your business level strategy, while HRP is a component of your functional level strategy.

Now that you understand the theory behind human resource planning, let’s focus our attention on the practice itself.

1) Analyze Organizational Strategy

Any successful workforce-management  program — including human resource planning — is a direct offshoot of your business’s organizational strategy.

Therefore, you should always start your HRP process by analyzing the goals and plans of your organization. With those strategies in mind, you can then move on to crafting a general human resources mission statement.

From there, you can work your way through the various departments in your business to address issues such as:

• Recruitment
• Employee relations

When you have that information written down, you can craft a human resource plan to help your business reach and maintain its goals.

2) Inventory Current Human Resources

After analyzing your organizational strategy, it’s time to take stock of your business’s current human resources.

In the process, it’s beneficial to investigate such variables as:

• Total number of team members you employ
• Who works in what department
• Skills of each employee
• Performance reviews
• Team and individual potential

With that data in hand, you then make sure that your existing workforce  is large enough and skilled enough to cover current demands before moving on to the next step in this guide.

3) Forecast The Future Of Your Workforce

Step three is all about planning, prediction, and preparing for the future.

Guided by your organizational strategy and your current employee data, do your best to forecast what the future of your workforce will look like. Be sure to incorporate any goals and plans into your forecast.

Examine variables such as:

• New product offerings
• New services
• A second (or third) location
• Labor costs
• Vendor and supplier  relations
• Cost of goods sold

A forecast of this type, coupled with the workforce data from step two, gives you an accurate picture of where your business is right now and where you want it to be five, 10, even 15 years down the road.

4) Estimate Gaps

Armed with the information you’ve produced so far, you can now estimate whether or not there are any gaps in your human resource strategy.

Will you need more employees to get your business from the present to where you want it to be in the future? If so, how many? Will you need fewer employees? If so, how many?

Does your forecast call for a reallocation or redistribution of current team members? If so, how would you go about doing this?

Once you’ve estimated the gaps between your current and future workforce numbers, you can move on to step five, where all the planning and brainstorming comes to fruition.

5) Formulate An Action Plan

Formulating an action plan is where the rubber meets the road, so to speak.

Your action plan should take into account all the analysis that came before it — organizational strategies, current HR inventory, HR forecast, and gaps between present and future — to create a step-by-step system for taking your business from point A to point B.

The action plan will be different for every business. Some businesses may need to begin recruiting  and training . Other businesses may need to promote  or transition their existing workforce.

Still other businesses may need to develop a retirement  program or a redeployment process to deal with surplus employees.

When crafting your plan, start with the theoretical — evolve from X to Y — and then move on to actionable steps that your HR department can take — hire and retain  two new team members every year, for example — to transform the theory into reality.

With these steps in mind, you can implement a successful human resource planning system into your business, no matter how many employees you have.

As you go about implementing your business’s HRP, don’t neglect the foundation of all good employer/employee relations: scheduling and communication. We’ll discuss this topic at the end of the article.

6) Integrate With The Rest Of The Company

Now that you’ve got an action plan, your human resource planning efforts will start to yield results.

That said, the integration stage is the most difficult of the entire process, so be ready for some speed bumps.

Without proper preparation — and even with proper preparation, in some cases — both management and frontline employees may show resistance to the proposed changes.

In addition, all departments within your business work together in one way or another (even if it doesn’t at first appear so). This makes the integration phase challenging on many levels.

One of the best ways to integrate human resource planning into the rest of the company is to start with the recruitment , hiring , and training practices in your business.

Once you’ve brought in new, high-potential employees and have begun funneling them into the various departments, you can start to make other changes to accommodate these new hires.

Integrating slowly and pairing the changes with new employees who will further the goals and productivity of each department makes putting your new human resource planning into place much easier.

7) Monitor, Evaluate, And Adjust

The final step in human resource planning is to monitor the new practices, evaluate them for their effectiveness, and adjust as necessary.

In addition to monitoring each department and your business as a whole, it’s also beneficial to zoom in on how any changes made affect the individual employee.

To take the pulse of the front-line worker, include questions about your human resource planning during mid-year reviews and performance appraisals . You can even ask for their opinion when you have them complete an employee self-evaluation .

Monitoring and evaluating in this way will help you get a detailed view of how any new policies, procedures, and practices affect the men and women in the trenches.

Once you have all the information you need, you can then take steps to adjust your human resource planning accordingly.

For that, it’s best to return to the top of this list and start again at step one, incorporating what you learned from the previous run-through.

In essence, then, you can view this list as less of a straight line and more of a circle, with step seven leading directly back into step one. As such, your HRP should be in a constant state of development.

Your business can function without HRP, and, yes, it can be a challenge to get the plans in place, but the benefits far outweigh the drawbacks.

Among other things, HRP can help your business:

• Anticipate workforce needs in a changing market
• Plan for short-term and long-term growth
• Improve operations
• Facilitate staffing changes
• Avoid talent shortage
• Stay ahead of the technology curve
• Remain agile as the market evolves
• Maintain compliance with government laws and regulations

Human capital management is one of the most important parts of your business. HRP helps you maximize that potential.

As beneficial and powerful as human resource planning is, it is not without its drawbacks and challenges.

For one thing, HRP relies on forecasting, which is an imperfect art and is never — and can never be — 100% accurate.

Similarly, you can never account for the ambiguity in the market and the rapid change that could come out of nowhere.

There may be some error when you forecast the future of your workforce. That error will affect the other steps on this list for the good or the bad (depending on how accurate your forecast is).

Realistically, though, that can’t be helped and all you can do is give it your best shot. If you discover errors in your forecasting, you can always return to step one and start the process over with the new information.

Other challenges of the human resource planning process include:

• Resistant workforce
• Inefficient information systems
• Overall cost
• Time and effort

That said, when you are aware of these challenges going in, you can take steps to overcome them right away so that you can get to the benefits sooner.

Scheduling and communication are key components of an effective human resource planning process.

Your team’s schedule is the cornerstone on which you build their work experience. If the schedule doesn’t satisfy all parties — employees and management alike — your business suffers.

Similarly, clear communication with all your employees fosters a strong team and keeps everyone in the loop about employee performance, inventory, standard operating procedures , customer satisfaction , and your business as a whole.

In the 21st century, the best schedules are created and the best communication maintained with help from dedicated software like Sling .

Whether your business has one shift  or three, offers flextime  or a compressed workweek , or works a 9-to-5 work schedule or a 9/80 work schedule , Sling can help simplify the schedule-creation process.

And with advanced communication features built in, Sling is the only tool you’ll ever need to keep your employees informed about your business and connected with each other.

In fact, we developed the Sling app  to streamline communication as well as make scheduling, tracking labor, finding substitutes, assigning tasks, and building employee engagement  extremely simple.

There are so many ways Sling can help improve your human resource planning that we don’t have room to talk about them here. So instead of reading about it, why not try it out?

Sign up for a free account and see for yourself how Sling can help you implement the necessary strategies  to make your team and your business successful.

For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit GetSling.com  today.

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This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

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Human Resource Planning: The Ultimate Guide

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Have you ever wondered how a company decides exactly how many people to hire, what skills they should have, and the best time for them to join?

That's where human resource planning comes into play.

Today, we'll explain what it is, why it's important, and how to do it.

As a bonus, we'll share some of the best tools to make HR planning easier.

What is human resources planning?

Strategic human resource planning involves a company figuring out:

• how many people they need,
• what skills they should have,
• and when they should join the team.

They look at things such as company goals and what's happening in the market to decide.

Then, they fill any gaps by hiring new staff or training current workers . It's all about putting the right people in the right place at the right time to help the company grow.

Why is the HR planning process important?

The HR planning process is key for any business wanting to stay ahead.

Let's break down why you should pay attention to it.

Efficient forecasting

Forecasting is predicting what you'll need in terms of staff in the future.

The HR planning process helps you estimate how many employees you'll need to meet your business goals.

This way, you're never short-handed or overstaffed.

Resource allocation

Resource allocation is assigning the right resources, including human resources, where they are needed most.

Strategic human resource planning ensures that every department has the right number of qualified employees to operate properly.

Talent acquisition and retention

Finding and keeping talented employees is the way to any company’s success.

With a proper plan in place, HR professionals can understand the skills the company needs and develop strategies to attract and keep these skilled individuals.

Cost management

Managing costs cannot be overlooked.

Effective human resources planning can be useful when controlling costs.

This is done by hiring and training staff strategically, avoiding unnecessary expenses by retaining current employees, as well as planning for the future.

Adaptation to change

Change is constant in business.

The HR planning process lets your company adapt quickly by preparing in advance.

This might involve training existing employees to take on new roles or hiring new talent to meet evolving business demands.

The human resource planning process step by step

Now that you know how big of a piece in the puzzle human resource planning is, let's get down to something more practical.

We've prepared a 7-step guide on how to plan human resources in your company:

Environmental analysis

In this initial step, you take a broad look at the outside factors that could influence your workforce.

Key areas include:

• Economic conditions: These refer to the overall health of the economy where your business operates. Are jobs plentiful, or is unemployment high ? Economic swings can affect how easy or hard it is to recruit and retain employees.
• Technological changes: Technology impacts how industries operate. Staying updated on technological advancements helps you anticipate the skills your workforce needs to stay competitive.
• Legal issues: This involves understanding employment laws and regulations. Laws may dictate everything from hiring practices to benefits and can vary by region. Keeping on top of legal changes makes your business comply with the law and avoid costly penalties.

Internal analysis

Next, you should do a detailed examination of your current workforce:

• Skills assessment: Start by cataloging the skills that each employee brings to the table. Are there emerging technologies or new market demands that your current staff can't meet due to a lack of necessary skills? Identifying these gaps early allows you to plan for targeted training or hiring.
• Strengths and weaknesses: Evaluate the overall strengths and weaknesses of your workforce. Which departments excel and which ones struggle? Understanding this can help you make strategic decisions, such as where to allocate resources or which areas might need restructuring.
• Employee feedback: Gather input from your employees about their work environment, job satisfaction, and where they see room for improvement. This feedback will let you identify hidden issues that may not be immediately apparent from a top-down perspective.

Forecasting human resource demand

Moving forward, it's time to predict the future needs of your workforce in terms of both quantity and quality.

Here’s a quick how-to:

• Project business growth: Start by estimating how much your company is expected to grow in the coming years. Will new markets or products require more staff? Understanding your business's trajectory helps you anticipate how many new employees you might need in the future.
• Analyze skill requirements: Evaluate what skills will be necessary to meet your business goals. For example, if you're planning to adopt new technology, you might need employees with expertise in that area.
• Consider turnover rates: It's also important to account for the natural turnover within your company. Employees may retire, resign, or move to other roles, which can affect your staffing levels. Thanks to forecasting these changes, you can plan recruitment and training more effectively.

As a result of forecasting human resource demand, you align your staffing strategy with your business objectives. This way, you have the right people with the right skills at the right time - no more inefficiencies and disruptions in your operations.

Identifying gaps

After forecasting your human resource demands, the next task is to identify any gaps between your future needs and what your current workforce offers.

This involves:

• Skill gaps: Look for discrepancies between the skills your future projects will require and what your current employees possess. For instance, if your business is moving towards more digital solutions, but your team's tech skills are lacking, that's a gap that needs addressing.
• Staffing levels: Assess if your current staff numbers will meet future demands. If you're planning to expand operations or launch new products, you might find that you currently don't have enough hands on deck.

Tip: Use detailed skills matrixes and workforce analytics tools to systematically evaluate and document these gaps. This will provide a clear visual representation of where enhancements are necessary.

Developing action plans

Once you've identified the gaps, it’s time to develop targeted action plans to bridge them.

Here's how you can do it:

• Recruitment strategies: If you need more people or specific skills, create a recruitment plan targeting the kinds of talent that align with your future business needs. Consider which roles are critical and prioritize hiring for those positions.
• Training programs: Develop training and development programs to upgrade the skills of your current employees. This not only helps close the skills gap but also boosts employee engagement and retention.
• Workforce adjustment: Sometimes, aligning your workforce with business goals might mean making tough decisions like staff reductions or restructuring teams to better fit the company's strategic direction.

Tip: When developing action plans, consider using scenario planning to imagine various future states of your business. This approach can help you create flexible strategies that adapt to different possible outcomes.

Implementation

Implementing your action plans is where strategy meets reality. You put into practice the recruitment, training, and retention strategies you've developed:

• Hiring: Start by rolling out your recruitment strategy. Make your job postings clear and reflective of the exact skills and qualities you're looking for. Use both digital platforms and networking events to attract a wide but relevant audience.
• Upskilling: Launch training initiatives that are specifically designed to address the skills gaps identified. Make these programs accessible and engaging to encourage active participation from your staff.
• Retention strategies: Implement retention measures such as competitive compensation, career development opportunities, and a positive work environment to make your employees feel valued and motivated to stay.

Tip: Use project management tools to keep track of implementation processes. Regular check-ins and updates will keep every part of your plan on track and any issues will be addressed swiftly.

Evaluation and adjustment

After implementation, the last stage is to evaluate the success of your human resource strategies:

• Monitor outcomes: Regularly review the outcomes of your recruitment efforts and training programs. Are your new hires meeting expectations? Are employees improving after training?
• Feedback loops: Establish channels for employee feedback to gauge satisfaction and effectiveness from the ground up. This can provide insights that might not be visible through performance metrics alone.
• Adjust strategies: Based on the evaluations, make necessary adjustments. If certain strategies aren't working, tweak them or try new approaches. The business environment is always changing, and your strategies should be flexible enough to adapt.

Consider setting up a dashboard that tracks key performance indicators (KPIs) related to HR activities. This can provide a real-time snapshot of how well your HR strategies are performing and quickly highlight areas needing adjustment.

• Check this out: key HR metrics to track

The best tools for human resource planning

Alright, you know the ins and outs of the human resource planning process.

But do you know how you could supercharge it?

The answer lies in tools.

Check out these top solutions that are extremely useful when it comes to the workforce scheduling process:

Time tracking apps

What do they do:

Time tracking apps monitor how employees spend their work hours. This makes it easier to manage workloads and improve productivity.

Who should use them:

Any business that wants to enhance efficiency and make employees manage their time well should use these apps. They are especially useful for teams with remote or flexible work arrangements.

The best pick: Unrubble

Are you looking for a solution to streamline your HR processes and boost productivity across your teams? Unrubble is here to revolutionize the way you manage time, and make your human resource planning more strategic than ever!

Precision time tracking : Unrubble's cutting-edge time tracking features let you capture every second of billable time with ease and accuracy. From the seamless mobile time clock with face recognition to real-time timesheets, managing your team's hours has never been easier.

Smart scheduling : Say goodbye to the chaos of manual scheduling. With Unrubble, scheduling is not just made easy - it's made smart. Automatically generate schedules, send instant updates, and make changes on the go.

PTO tracker : Planning time off doesn't need to be a headache. Unrubble's PTO tracker simplifies how you handle vacations, WFH days, and business trips.

Employee Self-Service App : Motivate your employees with a tool that speaks directly to them. Our app allows staff to manage their time, request days off, and check their schedules anytime, anywhere.

Optimize your human resource strategy: Unrubble not only helps with the hiring process and tracking skilled employees but also aligns with your strategic human resource planning. Our tools integrate smoothly into your existing systems, supporting your strategic human resource plan and boosting overall efficiency.

Don't just track time, manage it like a pro with Unrubble. Start unrubbling for free today and experience a boost in productivity and collaboration that will propel your business forward.

Human resource information systems (HRIS)

HRIS manage employee data and automate HR processes such as payroll, benefits administration, and compliance. They make operations smoother and reduce administrative burdens.

HR professionals looking to improve strategic human resource planning and reduce time spent on administrative tasks should use HRIS. They're suitable for all sizes of organizations.

Good picks:

BambooHR, Zoho People, and Gusto are well-regarded for their robust features and ease of use.

Workforce planning software

This software assists in predicting future staffing needs, planning for employee development, and managing risks related to workforce changes. It supports strategic human resource planning.

Businesses that want to align their workforce strategy with company goals should use this software. It's ideal for HR professionals responsible for long-term planning.

Workday, SAP SuccessFactors, and Oracle HCM Cloud offer tools for successful workforce planning.

Talent management software

Talent management software helps with hiring, onboarding, performance management, and succession planning. It simplifies processes to retain and develop talented employees.

Organizations looking to nurture and retain top talent through effective employee retention strategies should adopt this software. It's essential for HR teams focused on employee growth and satisfaction.

LinkedIn Talent, Cornerstone OnDemand, and TalentLMS are known for their extensive features that support talent acquisition and development.

Skills assessment and gap analysis tools

These tools evaluate the skills of current employees and identify gaps that could impact organizational goals. This data is needed for targeted training and recruitment.

HR professionals and managers aiming to improve team capabilities and address skill shortages should use these tools. They're particularly valuable for companies undergoing technological upgrades or strategic shifts.

Skillsurvey, GapJumpers, and Thomas International offer precise assessment capabilities to help optimize your workforce according to strategic needs.

• Check this out: free templates for HR

Wrapping up

So, there you have it - the nuts and bolts of human resource planning, all laid out.

It’s not just filling chairs - it's plotting a course for your company’s future.

With each step carefully planned, you’re setting the pace.

Whether it’s by using the power of the latest HR tools or mastering the art of strategic planning, the future of your workforce looks bright.

Your company’s next chapter starts now!

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4 steps to strategic human resource planning

Reading time: about 6 min

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.

Bring clarity to the hiring process 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.

About Lucidchart

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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HR Business Plan: What Is It And What Are Its Steps?

Every company that has an HR department needs an HR business plan. Without it, you will have inconsistencies when you deal with your employees.

Human resources manage the relationship between your company and its employees. Due to this, it is only natural for human resources to have their own plan of approach to their tasks.

Key Takeaways:

An HR business plan is the strategic approach of the human resources department.

The HR business plan should clarify responsibilities, organize its processes, and create performance standards in which to gauge its success.

First assess the current HR situation, then establish goals and strategies to enact those goals for the HR department.

Make sure your HR strategies comply with legal requirements.

What Is A HR Business Plan?

An HR business plan is a strategic approach your human resource department will follow to accomplish its goals.

Like all business plans, an HR business plan needs to define its objectives, organize systems of measured success, and incorporate a flexible framework. A robust plan can adapt to new scenarios and still focus on its long-term aims.

Though this will vary by company, in general, every HR business plan will want to:

Clarify roles and responsibilities. Focus on the roles and responsibilities of the department and its members. You want to understand the job descriptions of each member of the human resource department. Then decide what the overall purpose of the department is and connect it back to each member. Be aware of any conflicting or contradictory agendas and seek to streamline.

Design and organize processes. Human resources helps hire, train, onboard, and terminate staff. There should be well-detailed plans for each process that keeps the human resources department prepared for any scenario.

Address compensation and benefits. Human resources manages the implementation of benefits and compensation. Therefore, the department’s plan must discuss how this will be handled.

Comply with legal requirements. The human resource department needs to be well-versed in the legal requirements and protections of the employees. The plan should provide a clear compliance with the law.

Create performance standards. A business plan is useless unless it can be evaluated against measures of success. It helps to provide metrics with results to be more objective in analysis.

Tie in to overall business plan. The HR business plan needs to complement the overarching business plan of the company. Avoid any policies or procedures that conflict with the overall business plan.

A human resource business plan will develop these points into a coherent strategy.

Steps To Develop A HR Business Plan

Assess current human resource situation. Before a plan is made, the human resources department and the company executives need to know what they have already. Your company should evaluate the roles and responsibilities of its human resource staff. You will want to see if anything is missing or if there is anything that is expendable.

Establish goals for human resource department. Now that you know what you’re working with, it is time now to think about what you want the human resource department to accomplish. Use the roles and responsibilities you just clarified to arrange practical benchmarks you want the department to make. Make sure goals do not interfere with one another but build toward an overall objective.

Create strategies to enact goals. Once you have your goals in place, it is time to build strategies to accomplish those goals. These strategies should work in tandem, so make sure each one has a logical progression. Like the goals, you do not want your strategies to interfere with one another but instead build towards an overall objective.

Evaluate business plan. Once you enact the plan, you need to make sure you accomplish your goals. Have a feedback system put in place where you can measure the success and failures of your plan. Come up with contingency plans in case your initial plans need to be re-evaluated.

Why Have A Human Resource Business Plan

An HR business plan is needed to establish long-term success with your employees.

Your plan gives focuses on the roles and responsibilities of the department. Human resources play a critical role in the hiring, training, and retention of staff. A business plan will clarify these procedures.

A HR business plan also provides consistency in the implementation of benefits and managing the welfare of the employees.

The human resource business plan empowers the department to perform at its best. In turn, it will help employees be equipped and compensated to perform at their best.

Without a HR business plan, your company is at risk conflicted and contradictory procedures that impede growth and success.

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Conor McMahon is a writer for Zippia, with previous experience in the nonprofit, customer service, and technical support industries. He has a degree in Music Industry from Northeastern University and in his free time he plays guitar with his friends. Conor enjoys creative writing between his work doing professional content creation and technical documentation.

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How to create a human resources plan

Benjamin Franklin is often quoted as saying, “If you fail to plan, you are planning to fail.” We can’t deny that there are few instances in life in which the result turns out better without preparation, especially when we’re talking about business. As a central component of any company, the HR department is no exception to this rule, meaning the human resources plan must be given the importance it deserves. 

If you’re still not sure what the purpose of human resources planning is , then this article is for you. We’ll explain in detail how to translate your department’s strategic thinking onto paper and put it into practice. 

What is s trategic human resource planning ?

The human resources plan outlines the general strategy for this business area . It includes measures to adapt to current and future supply and demand requirements relating to the workforce, as well as pay policies, wellbeing, etc. 

Generally, the document considers the following topics: 

• How many staff are required to fulfil the organisation’s needs . 
• Staff management strategies .
• Job descriptions for all posts.
• Channels and sources for attracting candidates.
• Recruitment and selection processes.
• Growth and development planning.

The importance of a human resources plan

A company human resources plan is essential if the staff and organisation are to operate effectively . This document is also key to achieving a company’s business objectives. 

It also serves to:

• Promote flexibility within the organisation : we are living in a constantly changing world. Effective planning helps companies adapt more easily to new situations and negotiate market volatility. 
• Improve the distribution and use of internal talent : by analysing and organising the human capital, companies can make better use of internal talent and distribute employees more coherently. 
• Facilitate growth for small to medium enterprises : HR planning is a fundamental aspect of growth strategies. It is important to know when to subcontract, how many people to hire, what benefits will it bring, etc.  

The objectives of a human resources plan

Why do companies design human resources management plans ? The main goals are as follows:  

• Supply information : the data acquired through a company’s human resources plan are hugely important to, for example, identify surplus, unused resources. Similarly, the information can also be used in other management functions.
• Analyse the current workforce : the document should also determine the workforce’s strengths and existing skills. 
• Use human resources effectively : Planning is the HR management’s primary responsibility, as their duty is to ensure efficient use of the current and future labour force. 
• Identify salary gaps : the document will also examine any potential salary gaps and, in turn, create more equal policies. 
• Ensure internal wellbeing : good planning and organisation almost automatically generate an improvement in the work environment, boosting productivity and employee satisfaction. 
• Retain talent : this, in turn, has a direct impact on talent retention. Employees who are content in their job are less likely to accept offers from other companies.
• Foresee potential department needs : all planning should include a forecasting section. Understanding when it will be necessary to incorporate new people into the team and what type of role is required is essential. 

6 steps to create a human resources plan

At this point you may be thinking, “but how do I do a human resources plan ?” If that’s the case, here are the steps you need to follow:

1. Define the plan’s objective

Any measures that are developed by a company must be aligned with the general business objectives. This goes for the human resources plan, too.  

Aside from this, the specific objectives of the plan will be targeted at a particular area: employee retention, attracting talent, promoting the business culture, etc. It is important to be clear and precise at this stage for the content to be useful and have a real impact on the organisation. 

2. Analyse the current human capital

The next key step is to analyse and evaluate the availability and resilience of the current resources. This will entail carrying out an exhaustive assessment of each member of the organisation in terms of skills, experience, performance, seniority, etc. 

3. Carry out a needs forecast

Analysing future labour requirements is an important step in human resources planning. Although there will always be fluctuations, it is critical to have a forecast in place of factors such as: redundancies, dismissals, retirements, promotions, etc.

4. Write the HR plan

Once you’ve gathered all the information, it’s time to create a solid plan that fulfils current needs and forecasted possibilities. For example, you will have to decide whether it is necessary to hire, train or subcontract labour to achieve the company’s objectives. 

In general, try to include the following information: 

• Definition of targets and goals.
• Required measures, expected results and resources used. 

5. Implement the plan 

Implementing the plan is probably the most challenging step. Many organisations, in fact, do not achieve what they have set out to do. To approach it successfully, trust your team and introduce changes gradually. Try to handle any incidents as they come along and make sure you are complying with the organisation’s general standards. 

6. Monitor and review the process

HR planning is an ongoing process. It is important to review the plan periodically to make sure the strategy is pointing in the right direction and achieving the objectives.

Human Resource Management 101: Functions, Policies & Procedures

By Becky Simon | October 24, 2017 (updated November 18, 2021)

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It’s important to understand the basics of human resource operations. However, the traditional  approach to human resource management has been replaced by a more strategic, future-oriented approach. 

The good news is that there are technologies to help manage many of the day-to-day work related to payroll, benefits, and other transactional HR activities. This article provides the essential knowledge you need to understand human resource management, and also includes expert information about applying strategy to HR management, trends, free templates and tools, and Human Resource Management organizations, conferences, and publication resources.

What Is the Meaning of Human Resource Management?

Human Resource Management is central to any organization, and it’s about far more than just hiring and firing employees. In forward-thinking companies today, Human Resource Management focuses on the recruitment, direction, and management of human assets, and making strategic plans for the future. Strong Human Resource Management  nurtures human talent so employees can become even more valuable to the business.

Matthew Burr is the Moderator of the Upstate HR Podcast and Principal at Burr Consulting, LLC , a human resource consulting firm. He says that more than ever before, strategy and planning are integral to successful staffing and support of long-term organizational goals. 

“The responsibility of human resource management continues to grow in complexity and importance for all organizations because of its impact both on culture and business strategy,” says Burr. “HR management encompasses many aspects: training, employee relations, payroll, benefits, compensation, safety, legal, communication, engagement, and more. But the main function now is as a partner in driving strategy from a legal, ethical, and long-term planning perspective.”

Fiona Remley, VP, Global Agency Delivery Services for Rational Interaction, a digital marketing agency, says, “HR management is now a future-oriented process. As delivery lead, I oversee hiring and work hand-in-hand with HR to enable growth strategies. Having the right people in place means companies can address and solve business problems and meet major long-term business objectives.”

The Role of Strategy in Human Resource Management 

Shifting labor market conditions and new ways of doing business call for Human Resource Management business strategies that include recruiting and retaining the right people, as well as providing ethical and cultural leadership. “The skill sets needed in digital advertising are constantly changing,” says Remley. “I need to think strategically about the talent we need today and tomorrow to win major contracts in a highly competitive job market.”

Human resources managers in major companies are involved in strategic decision making and actively participate on organizational strategy teams. Most consider strategic planning to be a significant component of their role. To become a leading organization themselves, medium-to-small companies should consider adapting to this contemporary model to meet growth goals.  

To learn more about the next wave in HR, take a look at Welcome to the HR Revolution: Strategic Human Resources Management .

Planning and Forecasting as a Critical Function of Human Resource Management 

The ability to plan for the right workforce has never been more critical or more difficult than today. Technology, communications, and an accelerated rate of change mean that companies and their human resources arm need to be open-minded, nimble, and ready to make the shifts that will keep them competitive. 

A  skills stability report by The World Economic Forum predicted that three years from now, one third of jobs will require skillsets that aren’t crucial today. So how do you plan for what’s to come while remaining competitive today? Successful strategy execution will require that you forecast based on in-depth research to understand what roles will be needed in the future.  

“To stay current, we need to ensure that we have skillsets that may be rare or new (marketing automation, data visualization design, etc.) so we are always researching talent. Some open positions are based on getting new skill sets in-house,” says Remley. “Knowing we may win an enterprise site or complex project means that we will need to staff up on UX Strategy (for instance). So, we may ‘make do’ with freelance while at the same time recruiting for an FTE. We will pull that trigger once the work is won.”

Here are a few planning tips to keep in mind:

• Do Your Research: You need to stay abreast of the competition and technological advances that will affect your business.
• Profile Based on Organizational Objectives: Write job descriptions based on your company’s strategy needed to win at a three to five year time horizon.
• Know Your Human Capital: Assess your current team and identify gaps.
• Hire Now: Start closings gaps — now.

For a closer look into human resources planning and processes, including free templates, check out this article Use Human Resources Planning to Forecast for (Less) Risky Business . 

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A Brief History of Human Resource Management

Labor management has been practiced for thousands of years, and large-scale projects like China’s Great Wall or dikes in the Netherlands wouldn’t have been possible without labor process coordination. However, the significant changes that led us to human resources as we know it today began in England around 1760.

• 18th Century - “The Welfare Officers:” The Industrial Revolution of the 18th century shifted economics from agriculture to factories and required organizations to show absolute results for effort, relate them to costs, and sell them competitively. It also required a system to hire, pay wages, record employee work hours, and provide housing and health care. Worker oversight was managed by Welfare Officers or the Welfare Department.
• 19th Century - “Personnel Management:” Business and factory expansion led to a labor shortfall. Employees worked long hours under difficult conditions. To look for a solution, scientific ideas were applied to increase labor outputs, specifically the Scientific Management Theory advocated by Frederick Taylor related to Personnel Management. 
• 20th Century - “Human Resource Management:” Elton Mayo’s Hawthorne Studies disproved Taylor’s Scientific Management approach to increasing productivity, and found that the primary drivers of motivation and productivity were not monetary factors. A host of new theories emerged based on this behavioral perspective and the term human resource management came into use. 
• 21st Century - “Strategic Human Resource Management” and “Human Capital Management:” The increase in technology- and knowledge-based industries is intensifying global competition. At the same time, there’s a shortage of workers with appropriate skill sets. Consequently, many organizations have adopted strategic human resource management practices to make a long-term impact on corporate success, and refer to their human resources activities as human capital management.

Today’s Talent Management Trend

The evolution of human resource management also led to a new sub-practice: talent management , a business strategy that anticipates required human capital. Talent management is about engaging highly specialized, highly skilled people to retain them for the long run by understanding future skills needs, assessing competencies, training and developing employees, and keeping them on board and motivated.

“Retention of talent is one of the greatest challenges an agency can face. Money is always nice, but only gets you so far,” says Remley. “Most people are looking for a more custom-designed package, so you need to be flexible in perks such as signing bonus, flexible or extra vacation, ability to work at home, and sabbaticals.”

The talent management process has four main stages: 

“One of the most important levers is training. People look to acquire new skill sets, and having a company willing to invest in you by paying for training can be very enticing,” says Remley. “Talent stays if they feel involved, engaged, and have a clear understanding of what the company is doing and what it is aiming for. People need a reason to believe. They need to know the why of what they are doing. If this is not clear, there is little reason to stay put.”

Why Is Human Resource Management Important?

“Managing human capital,” says Remley, “is all about adding value to the organization.” There are many areas in which human resource management can impact companies, including the following:

• Improves Productivity: To seek out and hire a better class of employee is where all businesses need to start increasing their productivity — this falls to HR departments. HR departments not only recruit and interview potential candidates, but also pick out the standouts and leave the rest. In cooperation with other managers, human resources managers should build a benefits menu to attract ‘rock stars’ and develop a hiring process that targets motivated, productive employees. 
• Reduces Costs: “For every $10,000 in the salary of a key employee who decides to leave,” says Remley, “the company loses approximately six days of productivity.” Keep turnover low with ongoing employee satisfaction surveys and non-monetary benefits. Another retention tool is training and mentoring, which reduces turnover and internal strife. Managers can also cross-train team members so they can capably fill in when colleagues are on vacation or ill.
• Strengthens Brand: Top brands tend to top lists of the best places to work. Powerful brands attract powerful talent, but they are also built by powerful teams of talented individuals. Employees who are engaged are more productive and less likely to quit. They can also become brand ambassadors for your company and a recruitment source for new hires. 
• Enables Financial and Intellectual Company Growth: Human Resources must be able to facilitate strategy execution by building and sustaining organizational capability. This role cannot be automated, outsourced, or offshored: It comes from inside knowledge of a business’s strategy and the existing company capabilities. It includes maximizing employee performance in service of the company’s strategic objectives, preparing for current and long-term needs, and listening and responding to employees. It may also consist of re-engineering organizational processes. Every strategy is executed by people who are trained, supported, and equipped to fulfill the company’s strategic vision. 
• Manages Transformation and Change: Creating a company that is adaptable to market shifts includes effective communication with team members to ease job security concerns during periods of change. It’s a necessity: Change is the new constant in everyone’s work environment, everywhere. A typical organization has had five major changes in the past three years . Most change success factors relate to talent, which means human resources faces increasing pressures. Learn more by reading the Essential Guide to Everything Change Management . 

A Change Management Template to Ensure Successful Transition

When change is necessary, having a template to help get you started managing the details can make the difference between a successful transition, and one that leaves your team frustrated. Use the template below to show your change management process, from request flows to measuring and reporting outcomes. You can include this tool in your change management plan for a visual representation of the process. Showing a breakdown of each step helps to simplify the process and provides a snapshot view for easy reference. If you’re looking for other change management tools, download these additional proposal, communications, assessment, and policy change management templates . 

Download Change Management Process Template

What Are the Functions of Human Resource Management?

Today’s HR manager has several roles: an employee advocate, change manager, and strategic partner. They are also responsible for managerial, advisory, and a wide variety of operational functions. Doing the job well involves leadership, an ongoing investment in training of team members, and a solid understanding of the company, its brand, obligations, and goals. 

One of the things that Remley notes is that the basics need to be covered, plus more complex issues. For example, “Companies need to invest in training their leadership team on how to interview. A bad interview loop can damage a company's reputation, and talent is now reviewing companies on how well they interview (Glassdoor),” she says. “Train people how to ask the right questions. And, train them on the questions they are not allowed to ask from a legal or ethical standpoint. I have witnessed some blatant breaking of civil rights in interviews — ‘How old are you? ‘Why did you decide not to have children? — that can put the organization at risk and potentially damage the company brand.”

Managerial and Advisory Functions

Overarching managerial and advisory functions cover multiple areas:

• Advise: The human resources manager is an expert in their area and should advise on matters relating to human resources to the C-suite and departmental heads, including the formulation and evaluation of programs, policies, and procedures. They also give advice on fostering strong employee relationships and high morale. Additionally, the human resources manager advises on job analysis and design, manpower planning, recruitment, and selection — everything related to managerial and operational functions of HR.
• Strategize: Alignment to organizational business strategy means that human resources can anticipate and maintain a competitive advantage and better respond to customer needs. The execution of successful business strategy relies on meticulous research, planning, and the promotion of appropriate behaviors, workforce culture, and competencies. Use a Template to Create Your HR Strategic Plan Get started creating a detailed strategic plan for your HR organization with a pre-built template.Or modify the template to focus on one specific area, such as employee relations or recruitment. This simple layout makes it easy to quickly view key information and generate measurable action plans based on organizational goals.

 ‌ Download HR Strategic Plan Template

• Plan: “Talented people will always have options,” says Burr. “HR planning plays a significant role in supporting strategy.” HR planning ensures a good fit between candidates and jobs while avoiding personnel surpluses or shortages.The main aspects of HR planning are analyzing the current labor force, forecasting demand, balancing projected labor demand with supply, and supporting organizational goals.
• Organize: Once objectives and programs are established, and there are plans to achieve them, the HR manager designs and develops structures to complete the designated operations. This involves grouping activities functions or positions, assigning different tasks to individuals, delegating authority, and coordinating the activities of the appointed individuals.
• Direct: The direction function of the HR manager involves encouraging people to work effectively and willingly for the goals of the enterprise and to clearly state tasks and processes. Motivation can spring from training, benefits, perks, and improving the physical and emotional work environment.
• Control: Control involves the observation and comparison of results with the standards and correcting any deviations. Control requires performance appraisals, critical examination of records, statistics, and employee audits.

Human Resources Operational Functions

The day-to-day administrative functions are as essential as the advisory and managerial components they support. To help better manage the operational tasks, take advantage of free human resources templates .

Procure Hiring the right team members is one of the most critical functions of any company’s human resources staff. It involves the following activities:

• Job Analysis - A clear understanding of the jobs you need now and in the near future to meet company goals, what those job functions are, and the profile of the ideal candidate.
• Recruitment - Attracting candidates for any role will likely require multiple tools, from job boards, social media, word of mouth and bonuses for referral, and recruiting from within the organization. 

Maximize Your Efforts with a Staffing or Recruiting Plan Template Recruitment is one of the top responsibilities of any human resources team. Searching for, vetting, and finding the right talent to join your team is crucial to ensure the success of your organization. With a staffing plan in place, your team will be able to access recruitment sources, hiring goals, and more. This staffing plan template will help you to organize all of the details with columns for budgets, goals, status, and comments. 

‌ ‌Download Staffing Plan Excel Template

• Selection: Once a pool of candidates is selected, their applications will need to be reviewed and honed down to a small group of individuals who fit your criteria. They are then screened, usually through a phone interview. After screening, the list is honed down to a select few for in-person interviews. That process and the number of interviews vary depending on the size of the company. 
• Placement: This is the hiring process: The offer is extended and the applicant either  accepts or counter-offers. 
• Onboarding: A comprehensive onboarding process is perhaps the most crucial step in the recruiting process, as it helps candidates and new employees understand and embrace the culture and feel welcomed by the team. Onboarding is more than paperwork and knowing where the coffee is made: It’s about making new team members feel comfortable even before they officially join the organization. Many companies fail to do that, and their new employee never shows up for their first day of work. 

Help Improve Retention Rates with an Onboarding Plan Template Use this template to plan which onboarding activities to complete at each stage and by whom. Contacts are included in the first column. The rest of the spreadsheet shows the onboarding tasks assigned to each contact over the course of 12 months. Change the template as needed to create your own comprehensive onboarding plan. Learn more about onboarding and download more templates at Employee Onboarding Processes: Plans, Best Practices, Flowcharts .

Download Onboarding Plan Template

Excel | Smartsheet

• Transfer: Team members may have skills that apply to multiple areas of the company. A work transfer is a way to help an employee gain broader experience within the company and is an integral part of talent management and planning.

Develop  Creating a culture of talent development and management is good for the employee and good for the company. It involves the following activities: 

• Performance Appraisal: It’s essential for employees and employers to understand how well individuals are doing in their jobs and what can be done to improve performance. It is not only important for the employer to evaluate their employee, but increasingly there is importance placed on the employee evaluating their manager or employer. This is called a 360 performance appraisal. 

Get Everyone on the Same Page with a Performance Review Template This performance review template offers the basics: a list of employee skills and qualities and a rating system, from poor to excellent, to provide a snapshot of employee performance. It can help guide a productive conversation between team member and manager. There is also a section to note future goals and significant accomplishments. 

‌ Download Simple Performance Review Template

• Training: Helping employees learn how to do their job in alignment with how the organization wants it done requires training. There may be specific skills refreshed or learned. Providing opportunities for team members to attend online seminars or classes benefits the company and improves morale and engagement.
• Career Planning: Effective Human Resource Management covers career planning, development, and succession planning. An organization without career support initiatives can expect a high rate of attrition.
• Development: Upgrading existing skills and knowledge of employees is of utmost importance for employees to keep themselves involved in their jobs and for the company to survive fierce competition.
• Transition Planning: A successful company is one that continuously evolves to meet the challenges it faces, one such challenge is employee turnover. Developing a generalized transition plan can help you prepare for employee departures. You can also design a plan to prepare for an upcoming changes or transfers.

Try a Transition Plan Template

This easy-to-adapt transition plan template will help you and your team prepare for changes in your organization. You can track different tasks, assign them to team members, and check to see if you’re meeting deadlines. 

Download the Transition Plan Template

Compensate The human resources function of compensation is used to maximize competitive advantage by attracting the most qualified workers. Here are a few factors to consider regarding compensation:

• Evaluation: Compensation evaluation includes more than paycheck income. It also includes cost of living calculations, costs of healthcare, and the impact of state income taxes.
• Wages and Salary: Wages are hourly, daily, weekly, or monthly payments to employees. Salaries are flat rate payments to upper-level employees whose contribution cannot be measured easily. Compensation includes payments plus benefits such as vacation, housing, travel, and privileges.
• Bonuses and Incentives: Bonuses and incentives reward team members for outstanding performance. Bonuses recognize exceptional contributions and sustained outstanding performance. Incentives recognize specific goals that are accomplished and were formally communicated at the beginning of a project or performance cycle (these include goals and target award amounts). 
• Payroll. A payroll is an employee list, but the term also refers to the amount of money paid to personnel, including bonuses, incentives, and taxes withheld.  

Use a Template to Create a Helpful Payroll Dashboard Creating a payroll report template with a graphical data display highlights your most important data. This dashboard shows a quick overview of metrics and compiles a range of information into one report. This template offers a mix of graphs and charts for reviewing and managing payroll. 

‌ ‌ Download Dashboard Payroll Template

Integrate Keeping a smooth operation takes time and effort -- things may not always go smoothly. The lines of communication need to be open, and vigilance should be applied to the following:

• Labor Relations. Bridging gaps between management and staff is crucial to a healthy organization. Different forms of intervention can be used including mediation, counseling, training, and problem-solving to protect rights and facilitate a more harmonious work environment, including union negotiations.
• Motivation: Employee motivation is the level of commitment, creativity, and energy team members bring to their jobs. It’s a mix of fulfilling expectations, needs, and factors in your workplace that enable employee engagement. Work environments should be designed to be fair and supportive, and employees should feel empowered to make a contribution to the enterprise. 
• Grievance: A grievance is an assertion claim by an employee that they have been negatively affected by the misinterpretation or misapplication of a written company policy or collective bargain agreement. Be prepared and have grievance procedures in place and ready to implement. 
• Discipline: The most common infractions that require disciplinary action include poor attendance, dress code violations, insubordination, and discrimination or harassment. Human resources professionals should have a plan in place to address the most common disciplinary infractions. To discipline an employee, supervisors should have a well-crafted disciplinary policy to enforce, and precise documentation.

Stay on Top of Employee Incident Reports with a Template Use this template for non-violent incidents, such as disciplinary issues or accidents. It provides space to describe the nature of the event, disciplinary actions taken, the employee’s position, and their supervisor’s information. In case of an accident, this form may be used to capture information about injuries and medical treatment, workplace equipment involved, and witness information. This form may also be used in workers’ compensation claims.

Download Employee Incident Report Template

Word | Smartsheet

Maintain There are multiple considerations involved in keeping people safe, lowering risk, and complying with laws regarding records. Here is a list of the top factors to consider:

• Health & Safety: Human resources plays a vital role in ensuring personnel health and safety. It’s up to HR managers to set policies that utilize all possible resources to create and maintain the health and safety standards for their team.
• Risk Management: There are two aspects to risk management. The first is people, who are themselves a risk because of employee shortages, below-average performance, or a key employee quitting after considerable investment in training and development. Second, people deal with risk by solving problems, extending themselves for the good of the company, redesigning their job for greater efficiency or recruiting a former colleague who has a skill urgently needed by the company. 
• Welfare: Employee welfare includes various benefits, services, and facilities essential for the team members’ well-being. Employers are legally required to provide essential amenities such as toilet facilities and clean drinking water for employees. Policies can also include other items such transportation, housing, medical insurance, and food. 
• Recordkeeping: Federal laws require employers to create and keep various forms of employment records — failure to follow those regulations usually involves monetary penalties. In some cases, there is individual and criminal liability. Proper maintenance of employment records is crucial in the case of employment-related litigation. Human resources is responsible for keeping full records of employee achievements, promotions, training, and more. It also preserves records relating to behavior such as absenteeism, turnover, programs, and policies. 

Create an Employee Training Plan with a Template

Most employees are more successful in their jobs with additional training. Though the necessity and duration of training can be different for every organization, having a plan in place supports team member satisfaction and retention. This training schedule template helps you track activities, add details needed to complete each task, and provide valuable feedback for the employee and manager. 

Download Employee Training Excel Template

Policies and Regulations in Human Resource Management

Policies are the formal guidelines and rules companies establish to hire, train, assess, and reward team members. Having policies written and shared in an easy-to-understand form can preempt misunderstandings between staff and employers about rights and obligations. Regulations are the laws at the local, state, and federal levels that regulate staffing conduct. The most important of these covers affirmative action, equal opportunity, and sexual harassment.

There are multiple advantages of having policies and regulations written down in an employee manual, to ensure everyone is on the same page and able to do their best. Here are a few factors to consider when developing your company-wide policies:

• Operating from Clarity: Written policy and regulations mean that managers at every level can make decisions without consulting superiors, and that team members must accept responsibility because policies clearly define expectations.  
• Supporting Uniformity and Consistency: Established policies ensure uniform treatment of all employees throughout the organization. It creates consistency in the application of the procedures, so that everyone in the company receives fair treatment, follows set patterns of behavior, and works more confidently.
• Preventing Bias: A written policy and guidelines manual minimizes any personal bias and mismanagement or manager misbehavior.
• Saving Time: Prompt action for making decisions is ensured because standards have been set. They prevent the waste of time involved in repeated analyses for solving similar problems.
• Curbing Litigation: Making sure that regulations are shared and followed by everyone in the company can prevent expensive legal action and damage to the organization’s reputation and brand.

Types of Policies and Regulations to Include in Your Employee Manual

There are many policies and regulations to include in employee manuals — sometimes hundreds, depending on the size of the organization — including the following:

• Recruitment: The process should be transparent and unbiased to result in hiring the best team members, based on merit and alignment to your company’s goals, values, and philosophy. 
• EOE Legal Compliance: This is not a ‘should do,’ it’s a must. Compliance with the law is the responsibility of every employer and employee. 
• Compensation and Benefits: Total compensation should include base salary, incentive or plans, non-cash compensation, and benefits.
• Time Policies: Work schedules, breaks, holidays, sick days, and personal leave should be defined.
• Performance Evaluations: Employees who excel should be recognized, and struggling employees should have the chance to succeed while still being held accountable for less-than-stellar performance. A two-way conversation can help determine whether the employee has been given the resources and tools they need to be successful, and address failures to meet specific performance or behavior related concerns. Evaluations can lead to improvement in overall performance, the recognition of training or skills gaps, or possible employment actions demotion, transfer, or termination. Assessments are also useful for new employees as a tool to communicate performance expectations.
• Termination: Employers should develop standard procedures governing voluntary and involuntary employment termination. Adopting and closely following set policies and procedures reduce the risk of employee legal action and ensure your company’s compliance with related state and federal statutes. Because of the many legal issues surrounding termination, employers should consult with an experienced employment counsel. 

Creating Your Policies and Procedures Employee Manual

Every manual will be different, depending on company size, business type and model, and more. To begin the process, use the following checklist to check off all the items that can or should be included to in your employee manual.

‌ Download Policies and Procedures Checklist for Manual Preparation - PDF

What Is a Human Resource Management System?

Keeping track of and executing on policies and procedures can be challenging. A human resource management system is a software application that automates and integrates many of the policies and HR functions, such as benefits administration, payroll, recruiting and training, and performance analysis and review into a single system. This makes most of the day-to-day processes less time-consuming, trackable, and tedious, freeing up more time to devote to higher-level management concerns.

“Human resource management systems connect people and technology throughout the organization. The right system can revolutionize companies by ensuring efficient processes and accurate and timely information,” says Burr. “A human resource management system can impact strategy and decision making, but the real value of a human resource management system will vary from organization to organization. Human Resource Management Systems and HRIS systems are expensive, and organizations need to understand the need before implementing and spending money.” 

The cost of human resource management system in a one-time payment version can range from a few thousand dollars to the $100,000 range for enterprise versions. SaaS software pay-by-employee or user versions can be far less expensive, with an average of $10 per month. It may make sense for all company departments to weigh in on goals and options before a buying decision is made.

What Is the Process of Human Resource Management? Education, Careers, and Job Outlook

“The HR position has evolved over the past 30 years from a more administrative ‘paper processing’ department to strategic partner, working with business leaders in driving the business and setting goals,” says Burr. “When I work with clients, I ensure that I arrive at my decisions by partnering with the organization and aligning with their strategy. HR managers need to  thoroughly understand the business and how decisions can have an impact. I see many HR professionals struggle to make that leap to strategy and understanding business.”

Human resource management demands a high level of interpersonal skills, integrity, and dedication to confidentiality. Increasingly, as Burr suggests, to be successful, human resources managers need to understand the business they are working for and the competition. Having an understanding of the business management, finance, and accounting that your employer is engaged in is essential to be effective in your role and strategic in your stance. 

Education and Training

A degree isn’t mandatory to break into an entry-level human resources position, but the lack of a degree may limit your advancement. A degree in business management, finance, or accounting can be an advantage in today’s business environment. 

Most business schools offer courses in HR, often in their departments of management. There are also institutions and opportunities that offer HR-centric courses, including: 

• Universities Offering HR-Specific Degrees: Human Resources degrees are offered by Cornell University Rutgers, Michigan State University, Indiana University, Purdue University, The State University of New Jersey School of Management and Labor Relations, University of Minnesota, and the University of Illinois at Urbana-Champaign, among others. 
• Continuing Education and Certification: Professional organizations and larger companies offer workshops and classes to broaden and improve HR skills. Completing a professional certification course often increases advancement and earning potential. Some certifications include Professional in Human Resources (PHR) or Senior Professional in Human Resources (SPHR) designations.

The Human Resources Manager Role

Forbes considered HR Management the 6th best job in their 2017 poll of Best Jobs to Apply for in 2017 . Depending on the size of the organization, the Human Resources Manager is responsible for every function related to the activities and needs of the company’s people, including recruitment, hiring, training, organization, development, communication, performance management, policy and regulations, salary and benefits, employee relations, and leadership. 

• The Outlook for Human Resource Manager Positions: According to the US Department of Labor, employment opportunities for human resources managers are growing. Although job opportunities are expected to vary with the staffing needs of individual companies, stiff competition can be expected for most positions. Candidates with certifications or a master’s degree in HR are considered to have the best job prospects.

Source: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Human Resources Managers, on the internet at https://www.bls.gov/ooh/management/human-resources-managers.htm .

Senior Level Careers in Human Resource Management

There are career opportunities open to experienced human resources managers looking to advance their careers at their own companies or in new environments, either as full-time employees or as a consultant. 

• Human Resources Director: HR directors are in a leadership position, and supervise and provide consultation and advice to the C-Suite and departmental managers on strategic hiring plans, benefits, compensation, training and development, labor relations, and budget. HR directors take the lead in developing a culture that supports teams members to work in alignment with company objectives. HR directors spearhead initiatives that support strategic goals in human resources-related areas. In this position, HR Directors are expected to lead talent assessment, performance management, and productive labor relationships, including negotiating, and administer labor agreements.
• Chief Human Resources Officer (CHRO): A C-suite position, the CHRO is accountable for the development and execution of human resource strategy with a focus on talent and change management, succession planning, organizational and performance management, compensation, and training and development. The CHRO articulates HR needs and plans to executive management, the board of directors, and shareholders.
• Human Resources Consultant: HR Consultants usually fulfill one of two roles. An expert resource consultant designs solutions based on expertise and experience and assists in the implementation of those solutions. A process/people consultant helps search for solutions with methods that increase client company creativity, so they can implement solutions themselves. 

The Future of Human Resource Management

“The future of human resources management is wrapped up in the same issues affecting every part of every kind of business: more use of data and technology,” says Remley. Here is a list of the top forward-looking trends for human resource management:

• Predictive Analytics: A data-driven approach to human resources will enable more powerful policies and interventions to understand and prevent employee turnover and help with the forecasting process. People analytics have been in use for about a decade, but their impact and the use of big data will increase in the coming decades. 
• Greater Employee Focus: A Future Workplace and Beyond.com study found that over 80 percent of human resource leaders say that employee experience is fundamental to their company’s competitiveness and success, and that they are making changes to be more competitive in a tight job market, to recruit and retain talent with the right skills. Employee experience includes the culture, physical environment, and technological environment.
• Applying Agile: The Agile approach used in software development to operate with speed and manage unpredictability will eventually be used in human resources management. For example, “Agile Recruiting Scrum Master” is an HR title already coming into use. Agile will also be applied to learning and development by making it easy for employees to find, rate, tag, and consume learning. 
• Virtual HR: Virtual HR refers to a range of options that connect employees directly with HR systems. This reduces the time commitment of HR staff to maintain the integrity of employee information and the need to serve staff directly. For team members, virtual HR allows them to own their own data, keep on top of training needs and appraisals, and get company news and developments.
• HR and Social Media: Integrating social technologies into recruitment, development, and engagement is becoming more common. A strong social media presence and strategy helps locate top talent, and online reputation is a must according to a survey by Spherion Staffing.

Resources for Human Resources Professionals

Human resource management is a dynamic field that requires ongoing education, professional development and a need to stay abreast of changes in legislation. To assist in that process, here are some of the primary professional organizations, conferences, and publications:

Human Resource Management Professional Organizations

Academy of Human Resources Development : Encourages the study of theories, processes, and practices related to human resources. The site provides useful links, organization info, newsletter, and chapter listservs. Some areas are only accessible to members.

American Arbitration Association (AAA) : The Association provides Alternative Dispute Resolution (ADR) services. Their site contains rules and procedures, focus areas, publications, arbitrator directory, and links to additional resources.

Association for Talent Development (ASTD) : A worldwide organization, the group supports professionals who develop the skills and knowledge of employees. ASTD provides books, research, education programs, conferences, and webcasts.

College and University Professional Association for Human Resources (CUPA-HR) : The organization provides research, trend monitoring, and workplace issues in higher education workplaces, domestically and globally. Members can network, access professional development, resources, and tools.

Equal Employment Advisory Council : This nonprofit is an association of major companies committed to equal employment opportunity principles. Members have access to resources and publications.

HR People + Strategy : Originally known as the Human Resource Planning Society, this strategic human resource management system Executive network brings thought leaders and members together. It also provides access to discussions, publications, research, and executive-level networking opportunities.

Human Capital Institute (HCI) : HCI is a worldwide organization with many resources dedicated to driving sustainable competitive advantage in a global economy.

Human Resources Consultants Association : A resource for client companies to find HR consultants in an array of specialties and in a national forum for members.

Human Resources Research Organization : An independent, nonprofit organization serving government agencies, the private sector, and professional associations. The organization designs custom solutions by applying technology and science to improve performance.

International Association for Human Resource Information Management (IHRIM) : An HR system professional association providing expert knowledge that leverages systems, technologies, and analytics for business excellence. Members are offered a job board, research, resource links, and networking opportunities.

International Public Management Association for Human Resources : The association provides information and assistance to help HR professionals at federal, state, and local levels of government improve performance with cost effective services, products, and educational resources.

International Society for Performance Improvement : The focus is improving human workplace performance through reproducible and systematic means. Resources provided include discussion forums, jobs board, a buyers guide, and journal.

National Association of African Americans in Human Resources (NAAHR) : A networking and career organization for African American HR practitioners and other aligned individuals. Tips and resources, networking, educational and professional development, job opportunities, mentorship, and coaching are provided.

National Employment Lawyers Association (NELA) : The country’s largest organization of attorneys who primarily or exclusively represent employees in cases involving workers rights violations. The site provides employment cases, affirmative action facts, disability rights, and other pertinent resources.

National Human Resources Association (NHRA) : Focused on member leadership skills and career advancement, the organization offers development and networking services nationwide. NHRA supports professional development with live meetings, conferences, seminars, webcasts, and other tools.

Recruitment Process Outsourcing Association (RPOA) : The organization’s goal is to educate companies and HR professionals about recruitment process outsourcing, develop and enforce certifications, and support the use of common metrics.

WorldatWork : The organization is dedicated to knowledge leadership for HR professionals in the areas of benefits, compensation, and total rewards.

Worldwide ERC : The organization provides international assignment and relocation leadership and resources to global workforce mobility professionals.

Human Resource U.S. Annual Conferences

The Annual Advanced Employment Issues Symposium (AEIS) : Practical guidance for overcoming the latest employment challenges. Employment law attorneys and experts provide information about regulatory changes and compliance obligations.  

American Society for Healthcare Human Resources Administration : Networking, education, and development for professionals in healthcare human resources.

Benefits Forum & Expo : Information and networking for senior level benefits professionals.

CUPA-HR Conferences & Symposiums : The College and University Professional Association for Human Resources offers multiple symposia and conferences throughout the year.

Elevate Virtual : A free, online conference of over 60 presentations by industry experts, authors, advisors, executives, and thought leaders, plus free downloadable content and Strategic Human Resource Management and HCRI credits.

Equal Employment Advisory Council Fall Compliance Conference : Practical information on policy, regulatory, and case law changes that influence workplace compliance programs.

Human Capital Institute Events 2017 : The institute hosts multiple conferences through the year on various topics including innovation, workforce planning, analytics, diversity, performance management, and more.

HR People + Strategy Annual Conference : A forum for HR executives to exchanges ideas and learn from forward-thinking human resources thought leaders with the goals of developing strategies today to answer the issues companies will face in the near future.

National Human Resources Association Meetings & Events : Leadership activities, human resources conferences and events, meetings, and networking groups on a wide range of HR and leadership topics.

Predictive Analytics World for Workforce : An annual conference that brings employers, data scientists, and vendors together on the use of predictive analytics to solve workforce optimization challenges.

University Conference Services : A series of programs focused on the two most important benefits programs for attracting and retaining talent: employer-provided healthcare and retirement benefits.

Worldwide ERC's Global Workforce Symposium : A conference which addresses workforce mobility issues and challenges.

Human Resources Publications

The HR Director : Focus on senior managers and human resource directors to stay abreast of HR advancements.

Human Resource Executive Online : An online publication providing HR executives with the latest information about strategic issues.  

Human Resource Management International Digest : A compendium of the best HR articles about HR management.

Human Resource Management : Bridges research and practice, and features thought-provoking articles on innovative strategies and methods for Human Resource Management professionals.

Human Resource Management Review : Scholarly articles cover the main area of concern to Human Resource Management professionals.

Human Resources Management Journal : A scholarly journal for the advancement and of HR academics and practitioners.

International Journal of Human Resource Studies : A quarterly, internationally refereed journal promoting new techniques and enhancements to current HR techniques and methodologies.

Membership in the American Society for Healthcare Human Resources Administration : A quarterly journal for members covering cutting edge advancements in practice and research on healthcare industry HR.

Workforce Magazine : A monthly publication devoted to sharing the most successful and innovative HR tools and trends.

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2.2 Writing the HRM Plan

Learning objective.

• Describe the steps in the development of an HRM plan.

As addressed in Section 2.1 “Strategic Planning” , the writing of an HRM strategic plan should be based on the strategic plans of the organization and of the department. Once the strategic plan is written, the HR professional can begin work on the HR plan. This is different from the strategic plan in that it is more detailed and more focused on the short term. The six parts described here are addressed in more detail in Chapter 4 “Recruitment” , Chapter 5 “Selection” , Chapter 6 “Compensation and Benefits” , Chapter 7 “Retention and Motivation” , Chapter 8 “Training and Development” , Chapter 9 “Successful Employee Communication” , Chapter 10 “Managing Employee Performance” , and Chapter 11 “Employee Assessment” .

How Would You Handle This?

Compensation Is a Touchy Subject

As the HR manager, you have access to sensitive data, such as pay information. As you are looking at pay for each employee in the marketing department, you notice that two employees with the same job title and performing the same job are earning different amounts of money. As you dig deeper, you notice the employee who has been with the company for the least amount of time is actually getting paid more than the person with longer tenure. A brief look at the performance evaluations shows they are both star performers. You determine that two different managers hired the employees, and one manager is no longer with the organization. How would you handle this?

As you can see from this figure, the company strategic plan ties into the HRM strategic plan, and from the HRM strategic plan, the HR plan can be developed.

The six parts of the HRM plan include the following:

• Determine human resource needs. This part is heavily involved with the strategic plan. What growth or decline is expected in the organization? How will this impact your workforce? What is the economic situation? What are your forecasted sales for next year?
• Determine recruiting strategy. Once you have a plan in place, it’s necessary to write down a strategy addressing how you will recruit the right people at the right time.
• Select employees. The selection process consists of the interviewing and hiring process.
• Develop training. Based on the strategic plan, what training needs are arising? Is there new software that everyone must learn? Are there problems in handling conflict? Whatever the training topics are, the HR manager should address plans to offer training in the HRM plan.
• Determine compensation. In this aspect of the HRM plan, the manager must determine pay scales and other compensation such as health care, bonuses, and other perks.
• Appraise performance. Sets of standards need to be developed so you know how to rate the performance of your employees and continue with their development.

Each chapter of this text addresses one area of the HR plan, but the next sections provide some basic knowledge of planning for each area.

Determine Human Resource Needs

The first part of an HR plan will consist of determining how many people are needed. This step involves looking at company operations over the last year and asking a lot of questions:

• Were enough people hired?
• Did you have to scramble to hire people at the last minute?
• What are the skills your current employees possess?
• What skills do your employees need to gain to keep up with technology?
• Who is retiring soon? Do you have someone to replace them?
• What are the sales forecasts? How might this affect your hiring?

These are the questions to answer in this first step of the HR plan process. As you can imagine, this cannot be done alone. Involvement of other departments, managers, and executives should take place to obtain an accurate estimate of staffing needs for now and in the future. We discuss staffing in greater detail in Chapter 4 “Recruitment” .

Many HR managers will prepare an inventory of all current employees, which includes their educational level and abilities. This gives the HR manager the big picture on what current employees can do. It can serve as a tool to develop employees’ skills and abilities, if you know where they are currently in their development. For example, by taking an inventory, you may find out that Richard is going to retire next year, but no one in his department has been identified or trained to take over his role. Keeping the inventory helps you know where gaps might exist and allows you to plan for these gaps. This topic is addressed further in Chapter 4 “Recruitment” .

HR managers will also look closely at all job components and will analyze each job. By doing this analysis, they can get a better picture of what kinds of skills are needed to perform a job successfully. Once the HR manager has performed the needs assessment and knows exactly how many people, and in what positions and time frame they need to be hired, he or she can get to work on recruiting, which is also called a staffing plan . This is addressed further in Chapter 4 “Recruitment” .

Recruitment is an important job of the HR manager. More detail is provided in Chapter 4 “Recruitment” . Knowing how many people to hire, what skills they should possess, and hiring them when the time is right are major challenges in the area of recruiting. Hiring individuals who have not only the skills to do the job but also the attitude, personality, and fit can be the biggest challenge in recruiting. Depending on the type of job you are hiring for, you might place traditional advertisements on the web or use social networking sites as an avenue. Some companies offer bonuses to employees who refer friends. No matter where you decide to recruit, it is important to keep in mind that the recruiting process should be fair and equitable and diversity should be considered. We discuss diversity in greater detail in Chapter 3 “Diversity and Multiculturalism” .

Depending on availability and time, some companies may choose to outsource their recruiting processes. For some types of high-level positions, a head hunter will be used to recruit people nationally and internationally. A head hunter is a person who specializes in matching jobs with people, and they usually work only with high-level positions. Another option is to use an agency that specializes in hiring people for a variety of positions, including temporary and permanent positions. Some companies decide to hire temporary employees because they anticipate only a short-term need, and it can be less expensive to hire someone for only a specified period of time.

No matter how it is done, recruitment is the process of obtaining résumés of people interested in the job. In our next step, we review those résumés, interview, and select the best person for the job.

After you have reviewed résumés for a position, now is the time to work toward selecting the right person for the job. Although we discuss selection in great detail in Chapter 6 “Compensation and Benefits” , it is worth a discussion here as well. Numerous studies have been done, and while they have various results, the majority of studies say it costs an average of $45,000 to hire a new manager (Herman, 1993). While this may seem exaggerated, consider the following items that contribute to the cost:

• Time to review résumés
• Time to interview candidates
• Interview expenses for candidates
• Possible travel expenses for new hire or recruiter
• Possible relocation expenses for new hire
• Additional bookkeeping, payroll, 401(k), and so forth
• Additional record keeping for government agencies
• Increased unemployment insurance costs
• Costs related to lack of productivity while new employee gets up to speed

Because it is so expensive to hire, it is important to do it right. First, résumés are reviewed and people who closely match the right skills are selected for interviews. Many organizations perform phone interviews first so they can further narrow the field. The HR manager is generally responsible for setting up the interviews and determining the interview schedule for a particular candidate. Usually, the more senior the position is, the longer the interview process takes, even up to eight weeks (Crant, 2009). After the interviews are conducted, there may be reference checks, background checks, or testing that will need to be performed before an offer is made to the new employee. HR managers are generally responsible for this aspect. Once the applicant has met all criteria, the HR manager will offer the selected person the position. At this point, salary, benefits, and vacation time may be negotiated. Compensation is the next step in HR management.

Determine Compensation

What you decide to pay people is much more difficult than it seems. This issue is covered in greater detail in Chapter 6 “Compensation and Benefits” . Pay systems must be developed that motivate employees and embody fairness to everyone working at the organization. However, organizations cannot offer every benefit and perk because budgets always have constraints. Even governmental agencies need to be concerned with compensation as part of their HR plan. For example, in 2011, Illinois State University gave salary increases of 3 percent to all faculty, despite state budget cuts in other areas. They reasoned that the pay increase was needed because of the competitive nature of hiring and retaining faculty and staff. The university president said, “Our employees have had a very good year and hopefully this is a good shot in the arm that will keep our morale high” (Pawlowski, 2011).

Determination of compensation systems is a balancing act. Compensation should be high enough to motivate current employees and attract new ones but not so high that it breaks the budget.

Nathan Rupert – Venice Beach Tightrope Walker – CC BY-NC-ND 2.0.

The process in determining the right pay for the right job can have many variables, in addition to keeping morale high. First, as we have already discussed, the organization life cycle can determine the pay strategy for the organization. The supply and demand of those skills in the market, economy, region, or area in which the business is located is a determining factor in compensation strategy. For example, a company operating in Seattle may pay higher for the same job than their division in Missoula, Montana, because the cost of living is higher in Seattle. The HR manager is always researching to ensure the pay is fair and at market value. In Chapter 6 “Compensation and Benefits” , we get into greater detail about the variety of pay systems, perks, and bonuses that can be offered. For many organizations, training is a perk. Employees can develop their skills while getting paid for it. Training is the next step in the HR planning process.

Develop Training

Once we have planned our staffing, recruited people, selected employees, and then compensated them, we want to make sure our new employees are successful. Training is covered in more detail in Chapter 8. One way we can ensure success is by training our employees in three main areas:

• Company culture. A company culture is the organization’s way of doing things. Every company does things a bit differently, and by understanding the corporate culture, the employee will be set up for success. Usually this type of training is performed at an orientation, when an employee is first hired. Topics might include how to request time off, dress codes, and processes.
• Skills needed for the job. If you work for a retail store, your employees need to know how to use the register. If you have sales staff, they need to have product knowledge to do the job. If your company uses particular software, training is needed in this area.
• Human relations skills. These are non-job-specific skills your employees need not only to do their jobs but also to make them all-around successful employees. Skills needed include communication skills and interviewing potential employees.

Perform a Performance Appraisal

The last thing an HR manager should plan is the performance appraisal. While we discuss performance appraisals in greater detail in Chapter 11 “Employee Assessment” , it is definitely worth a mention here, since it is part of the strategic plan. A performance appraisal is a method by which job performance is measured. The performance appraisal can be called many different things, such as the following:

• Employee appraisal
• Performance review
• Career development review

No matter what the name, these appraisals can be very beneficial in motivating and rewarding employees. The performance evaluation includes metrics on which the employee is measured. These metrics should be based on the job description, both of which the HR manager develops. Various types of rating systems can be used, and it’s usually up to the HR manager to develop these as well as employee evaluation forms. The HR manager also usually ensures that every manager in the organization is trained on how to fill out the evaluation forms, but more importantly, how to discuss job performance with the employee. Then the HR manager tracks the due dates of performance appraisals and sends out e-mails to those managers letting them know it is almost time to write an evaluation.

Human Resource Recall

Have you ever been given a performance evaluation? What was the process and the outcome?

Communication Is Key in Performance Evaluations

(click to see video)

Communication is imperative in any workplace, but especially when giving and receiving a performance evaluation.

Key Takeaways

• Human resource planning is a process that is part of the strategic plan. It involves addressing specific needs within the organization, based on the company’s strategic direction.
• The first step in HR planning is determining current and future human resource needs. In this step, current employees, available employees in the market, and future needs are all analyzed and developed.
• In the second step of the process, once we know how many people we will need to hire, we can begin to determine the best methods for recruiting the people we need. Sometimes an organization will use head hunters to find the best person for the job.
• After the recruiting process is finished, the HR manager will begin the selection process. This involves setting up interviews and selecting the right person for the job. This can be an expensive process, so we always want to hire the right person from the beginning.
• HR managers also need to work through compensation plans, including salary, bonus, and other benefits, such as health care. This aspect is important, since most organizations want to use compensation to attract and retain the best employees.
• The HR manager also develops training programs to ensure the people hired have the tools to be able to do their jobs successfully.
• Of the parts of HR planning, which do you think is most difficult, and why? Which would you enjoy the most, and why?
• Why is it important to plan your staffing before you start to hire people?
• What is the significance of training? Why do we need it in organizations?

Crant, J., “How Long Does an Interview Process Take?” Jobsinminneapolis.com, December 2, 2009, accessed October 28, 2010, http://www.jobsinminneapolis.com/articles/title/How-Long-Does-an-Interview-Process-Take/3500/422 .

Herman, S., Hiring Right: A Practical Guide (Thousand Oaks, CA: Sage, 1993), xv.

Pawlowski, S., “Illinois State University to Get Salary Bump,” WJBC Radio, July 11, 2011, accessed July 11, 2011, http://wjbc.com/illinois-state-university-faculty-to-get-salary-bump .

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.

Important Aspects of Human Resource Planning or SHRM

• Small Business
• Human Resources
• Human Resource Plans
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The Relationship Between HR & HRD Functions in a Large Organization

What are effective management and motivational theories in relation to problem solving, examples of the staffing & recruitment goals for performance management.

• How Much Influence Does a Leader Have on Employees?
• List the Purpose & the Effects of an Open-Door Policy

Planning an organization's human resources strategy often involves linking the practical aspects of employee management with the more lofty goals of coordinating services across the business's various functions. Strategic HR management links the function with the strategic objectives of business. Understanding the different aspects of hr planning can help you tailor your employee and resource plans to meet your most pressing needs.

HR Practices and Performances

One of the key human resources aspects is aligning strategy with the organization's overall business strategy helps to improve performance and leads to the business becoming more competitive in the marketplace.

Therefore, SHRM seeks to initiate organization-wide practices that lead to increased employee motivation, decreased reliance on hierarchies of management and an increased push for performance data to measure employee progress. An organization might, for instance, institute an employee compensation plan that rewards increased productivity with extended vacation time or flexible working hours.

Designing Workflow Processes

SHRM stresses the importance of organizational design and its impact on employee and resource planning. Human resources areas that need to be addressed include hiring, training, managing, payroll, benefits, morale and wellness.

Creating high-performance work systems and encouraging managers to be committed to carrying out the organization's goals and objectives can go far in developing a flattened hierarchy where employees are encouraged to voice their opinions and give feedback on what is and isn't working within their daily processes.

Workplace Learning

Your human resource organization must recognize the value of establishing workplace learning programs to help employees and managers achieve the business's goals. Sometimes called professional development or training initiatives, workplace learning teaches employees to commit to a plan of action, to be flexible in their work approaches and to aim for high quality in their outputs, explains Betterteam .

This learning can be either formal, as in training seminars or higher education courses, or informal in which training is integrated as part of the mentoring process between employees and managers. Both types of learning can strengthen the business's core competencies, which include the skills and attitudes that set it apart from the competition.

Other opportunities for employees to improve their skills include going to trade shows, conferences, lunch and learns, seminars and workshops. You might consider a tuition-reimbursement program for employees who take specific night school classes. You might pay for trade association or professional society memberships for staff members, and/or trade magazine or educational website subscriptions.

Fostering Leadership and Teamwork

Leadership is the process of transforming employee behaviors and attitudes so that they better align with the organization's mission and with the employees' individual strengths. Unlike management, leadership is a more organic process and is not necessarily concerned with hierarchy or strict planning regimes.

SHRM is specifically interested in empowering employees at all levels of the organization to exhibit respect for one another, open communication and pride in their work, and to express opinions rationally and objectively. The idea is that increased leadership leads to a higher level of teamwork, which in turns leads to increased productivity.

• Lucidchart: https://www.lucidchart.com/blog/what-is-the-human-resources-planning-process
• Betterteam: What is Strategic Staffing?

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HR Consulting Business plan Template

Written by Dave Lavinsky

HR Consulting Business Plan

You’ve come to the right place to create your Human Resources Consulting business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their HR Consulting businesses.

Below is a template to help you create each section of your Human Resource business plan.

Executive Summary

Business overview.

HR Solutions is a startup human resources company located in Spokane, Washington. The company is founded by Tremaine Jackson, a former human resources manager in a large retail company. Tremaine led a team of twenty human resources employees in overseeing all aspects of human resources for the employer and developed a unique application that he has decided to introduce in his new company, HR Solutions.

HR Solutions will be the comprehensive leader in human resource training, management, negotiations, and solutions-finding company in the state of Washington. They will provide everything human resource personnel need to hire and effectively onboard new employees, as well as everything needed to maintain proper records, effectively cover communication and employee relations, and become proactive about potential conflicts.

Product Offering

The following are the services that HR Solutions will provide:

• Proprietary app that creates comprehensive HR management plans
• Training to maximize personnel potential
• Assistance in compliance with laws and regulations
• Curated HR solutions to solve employee issues
• Assistance in establishing productive work environments
• Onboarding from A to Z
• “Support Cadre” for HR management personnel
• Recruitment and talent acquisition training
• Organizational process-and-procedure manual

Customer Focus

HR Solutions will target small-to-large businesses in the Spokane, Washington region. HR Solutions will also target Washington state with select online training programs and sales of the proprietary HR app. HR Solutions will target C-suite executives in Spokane.

Management Team

HR Solutions will be owned and operated by Tremaine Jackson. He recruited his former administrative assistant, Sharlene Harris, to be his Administrative Manager in HR Solutions, where she will provide oversight of all personnel and HR responsibilities within the company itself. He also recruited Mason Wright, a former associate and HR manager, to be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers.

Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Sharlene Harris holds a bachelor’s degree in Business Administration from Spokane College. She has been Tremaine’s administrative assistant for ten years and her new role will be the Administrative Manager in HR Solutions. She will provide oversight of all personnel and HR responsibilities within the company itself.

Mason Wright, a former associate and HR manager, developed a large following of loyal clients. He will be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers. His clients have indicated that they will follow him into the startup business.

Success Factors

HR Solutions will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of HR Solutions

Financial Highlights

HR Solutions is seeking $200,000 in debt financing to launch HR Solutions. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for HR Solutions.

Company Overview

Who is hr solutions.

HR Solutions is a newly established, full-service human resource company in Spokane, Washington. HR Solutions will be the most reliable, cost-effective, and effective choice for HR managers and leaders in Spokane. Certain online programs and the proprietary app will also be the most effective and productive options for HR personnel throughout the state of Washington. HR Solutions will provide a comprehensive menu of training, recruitment, personnel, solution-finding services for any company to utilize. Their full-service approach includes a comprehensive set of training, management, and solution options.

  HR Solutions will be able to provide superior HR support and solutions to every business. The team of professionals are highly qualified and experienced in onboarding, training and creating solutions for every human resource quandary. HR Solutions removes all headaches and issues of the human resource personnel and ensures clients find the best answers to all their HR needs with the outstanding customer service found at HR Solutions.

HR Solutions History

HR Solutions is owned and operated by Tremaine Jackson. Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Since incorporation, HR Solutions has achieved the following milestones:

• Registered HR Solutions, LLC to transact business in the state of Washington.
• Has a contract in place for a 20,000 square foot office space within a downtown Spokane building.
• Reached out to numerous former clients and contacts to include those who will refer and recommend HR Solutions.
• Began recruiting a staff of ten HR managers and three office personnel to work at HR Solutions.

HR Solutions Services

The following will be the services HR Solutions will provide:

Industry Analysis

The human resources industry is expected to grow during the next five years to over $35 billion. The growth will be driven by an increased number of young employees who require extensive training and onboarding. The growth will be driven by an increased need for employees as the older demographic employee retires. The growth will be driven by an increase in the number of employees who are new to the U.S. and require assistance in onboarding and training. The growth will be driven by new technological advances that are not yet known. Costs will likely be reduced as new applications, such as the one created by HR Solutions, are created and introduced into the industry.

Customer Analysis

Demographic profile of target market, customer segmentation.

HR Solutions will primarily target the following customer profiles:

• Small-to-large businesses in the Spokane region
• Small-to-large businesses throughout Washington (select programs/app)
• C-suite executives in Spokane

Competitive Analysis

Direct and indirect competitors.

HR Solutions will face competition from other companies with similar business profiles. A description of each competitor company is below.

Human Resource RX

Human Resource RX was founded in 2005 by Reme and Janette Choux. As former human resource negotiators within a large firm, they developed distinctive programs that can help HR managers reduce conflicts in the workplace. In addition, the programs assist personnel in recuperating from workplace trauma and other difficulties or issues that arise in the office.

Human Resource RX, headquartered in Spokane, claims to be the “Best HR Prescription” for companies that require assistance in the form of management and oversight in trauma or difficulty. Human Resource RX also assists in compliance issues within the state of Washington, bringing expert advice into thorny issues that can potentially lead to litigation. The company has three offices throughout Washington, each with a staff of twelve “HR managers” who service local businesses. The company has maintained a good standing within the state of Washington, although there have been two separate issues of incorrect legal advice offered to clients. The matters were both brought by former clients to the court system and eventually resolved.

Premier Human Resource Associates

Premier Human Resource Associates is owned and operated by Tami Watson, an HR executive with over thirty years of experience. She is joined in the company by her daughter, Reyna Watson, a recent graduate of Spokane College, where she earned a bachelor’s degree in Communication. Premier Human Resource Associates is located in Spokane and offers an extensive onboarding and training program to support HR managers within local hospitals and medical clinics.

The bulk of services provided to HR managers includes various specific onboarding and training needs of nurses, LVNs, and other care providers. Attention is given in particular to the processes of sanitation and hygienic practices, along with the methods of communication used within these specific businesses. To date, the company has assisted in successfully onboarding over 5,000 nurses and other caregivers.

Transport HR Training

Transport HR Training was started in 1997 as a result of multiple difficult issues within the truck driving industry in Washington. In the decades since, Transport HR Training has established the full spectrum of services and products for HR associates in the long-haul and short-transport businesses. Specific practices and procedures relating to, in particular, medical issues of drivers, have been developed to smooth the HR process and align truck drivers with services they need. Transport HR Training offers a comprehensive package of services that includes negotiation in conflict, onboarding specifics, driver training, legal procedures and processes, and other truck driver-specific conditions.

Competitive Advantage

HR Solutions will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

HR Solutions will offer the unique value proposition to its clientele:

Promotions Strategy

The promotions strategy for HR Solutions is as follows:

Word of Mouth/Referrals

HR Solutions has built up an extensive list of clients and contacts over the years by providing exceptional service and expertise to their clients. Associates will follow them to their new company and help spread the word of HR Solutions.

Professional Associations and Networking

HR Solutions will extensively network throughout HR association and industry events. They will take an active role in leadership wherever invited to do so and will work to support the efforts of all associates or members.

Website/SEO Marketing

HR Solutions will fully utilize their website. The website will be well organized, informative, and list all the services that HR Solutions provides. The website will also list their contact information and list their available times to make reservations during the week. This will allow HR managers to speak with HR Solutions when most beneficial to the client. The website presence will engage SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Human Resources company” or “HR near me”, HR Solutions will be listed at the top of the search results.

The pricing of HR Solutions will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for HR Solutions. Operation Functions:

• Tremaine Jackson will be the Owner and President of the company. He will oversee all staff and manage client relations. He has spent the past year recruiting the following staff:

Milestones:

HR Solutions will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the HR Solutions
• 6/1/202X – Finalize contracts for new HR Solutions clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into HR Solutions office
• 7/1/202X – HR Solutions opens its office for business

Financial Plan

Key revenue & costs.

The revenue drivers for HR Solutions are the fees they will charge to clients for their services, online training and proprietary app.

The cost drivers will be the overhead costs required in order to staff HR Solutions. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

HR Solutions is seeking $200,000 in debt financing to launch its human resources company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Clients Per Month: 40
• Average Revenue per Month: $80,000
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, human resource business plan faqs, what is a human resource business plan.

A human resource business plan is a plan to start and/or grow your human resource business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Human Resource business plan using our Human Resource Business Plan Template here .

What are the Main Types of Human Resource Businesses? 

There are a number of different kinds of human resource businesses , some examples include: Human Capital Strategy, Compensation & Benefits, Talent Management, and Professional Development.

How Do You Get Funding for Your Human Resource Business Plan?

Human Resource businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Human Resource Business?

Starting a human resource business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Human Resource Business Plan - The first step in starting a business is to create a detailed human resource business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your human resource business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your human resource business is in compliance with local laws.

3. Register Your Human Resource Business - Once you have chosen a legal structure, the next step is to register your human resource business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your human resource business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Human Resource Equipment & Supplies - In order to start your human resource business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your human resource business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Human Resource Planning: Definition, Importance, Objectives, Process & Prerequisites

In this article we will discuss about human resource planning. Learn about:-

1. Introduction to Human Resource Planning 2. Meaning of Human Resource Planning 3. Definition 4. Need and Importance

5. Objectives 6. Organisation 7. Factors Affecting 8. Human Resource Planning at Different Levels 9. Quantitative and Qualitative Dimensions 10. Prerequisites and Other Details.

• Introduction to Human Resource Planning
• Meaning of Human Resource Planning
• Definition of Human Resource Planning
• Need and Importance of Human Resource Planning
• Objectives of Human Resource Planning
• Organisation of Human Resource Planning
• Factors Affecting Human Resource Planning
• Human Resource Planning at Different Levels
• Quantitative and Qualitative Dimensions of Human Resource Planning
• Prerequisites of Human Resource Planning
• Relationship of Human Resource Planning with Other Personnel Processes
• Cost-Contribution Analysis in Human Resource Planning
• Responsibility of Human Resource Planning
• Integration of Strategic Planning and Human Resource Planning
• Human Resource Planning and Environmental Scanning
• Human Resource Planning – Mapping an Organisation’s Human Capital Architecture
• Edgar Schein’s Human Resource Planning and Development System
• Human Resource Planning – Benefits
• Problems of Human Resource Planning
• Recent Implications of Human Resource Planning
• Recent Trends of Human Resource Planning

Human Resource Planning – Introduction :

Human resources undoubtedly play the most important part in the functioning of an organization. The term ‘resource’ or ‘hu­man resource’ signifies potentials, abilities, capacities, and skills, which can be developed through continuous interaction in an organizational setting.

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The interactions, interrelationships, and activities performed all contribute in some way or other to the development of human potential. Organizational productivity, growth of companies, and economic development are to a large extent contingent upon the effective utilization of human capa­cities.

Hence, it is essential for an organization to take steps for effective utilization of these resources. In the various stages in the growth of an organization, effective planning of human resources plays a key role. Matching the requirements of the job with the individual is important at all stages, including the recruitment procedures, in this endeavour.

When organizations contemplate diversification or expansion, or when employees have to be promoted, human resource planning plays an import­ant role. Further, the organizational plans, goals, and strategies also require effective human resource planning.

Human Resource Planning – Meaning :

E.W. Vetter viewed human resource planning as “a process by which an organisation should move from its current manpower position to its desired manpower position. Through planning, management strives to have the right number and right kind of people at the right places at the right time, doing things which result in both the organisation and the individual receiving maximum long-run benefit.”

According to Leon C. Megginson human resource planning is “an integrated approach to performing the planning aspects of the personnel function in order to have a sufficient supply of adequately developed and motivated people to perform the duties and tasks required to meet organisational objectives and satisfy the individual needs and goals of organisational members.”

Human resource planning may be viewed as foreseeing the human resource requirements of an organisation and the future supply of human resources and- (i) making necessary adjustments between these two and organisational plans; and (ii) foreseeing the possibility of developing the supply of human resources in order to match it with requirements by introducing necessary changes in the functions of human resource management. In this definition, human resource means skill, knowledge, values, ability, commitment, motivation, etc., in addition to the number/of employees.

Human resource planning (HRP) is the first step in the HRM process. HRP is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.

HRP translates the organization’s objectives and plans into the number of workers needed to meet those objectives. The actual HRM process starts with the estimation of the number and kind of people required by the organization for the coming period.

HRP is also known by other names such as ‘Manpower Planning’, ‘Employment Planning’, ‘Labour Planning’, ‘Personnel Planning’, etc. HRP is a sub-system in the total organizational planning. In other words, HRP is derived from the organizational planning just like production planning, sales planning, material planning, etc.

Human Resource Planning – Definition :

The organisation’s objectives and strategies for the future determine future requirement of human resources. It only means that the number and mix of human resources are reaction to the overall organisational strategy. If the intent is to get closer to people possessing requisite qualifications, the organisation should act quickly.

Human Resource Planning or Manpower Planning (HRP) is the process of systematically reviewing HR requirements to ensure that the required number of employees with the required skills is available when they are needed. Getting the right number of qualified people into the right job is the crux of the problem here.

In actual practice, this is not easy. Due to constant changes in labour market conditions, qualified people possessing relevant qualifications are not readily available. The organisation needs to go that extra mile, dig up every source of information and exploit every opportunity that comes its way in order to identify talent.

HRP is simply not a process of matching the supply of people (existing employees and those to be hired or searched for) with openings the organisation expects over a given timeframe. It goes a step further in order to reach out to right kind of people at right time, spending time, resources and energies. Without careful planning, advance thinking and prompt actions, it is next to impossible to get competent and talented people into the organisation.

Human resource planning is the responsibility of both the line and the staff manager. The line manager is responsible for estimating manpower requirements. For this purpose, he provides the necessary information on the basis of the estimates of the operating levels. The staff manager provides the supplementary information in the form of records and estimates.

Human Resource Planning – Need and Importance :

The following points highlight the need and importance of HRP in the organizations:

I. Assessing Future Personnel Needs:

Whether it is surplus labour or labour shortage, it gives a picture of defective planning or absence of planning in an organization. A number of organizations, especially public sector units (PSUs) in India are facing the problem of surplus labour.

It is the result of surplus labour that the companies later on offer schemes like Voluntary Retirement Scheme (VRS) to eliminate surplus staff. Thus, it is better to plan well about employees in advance. Through HRP, one can ensure the employment of proper number and type of personnel.

II. Foundation for Other HRM Functions:

HRP is the first step in all HRM functions. So, HRP provides the essential information needed for the other HRM functions like recruitment, selection, training and development, promotion, etc.

III. Coping with Change:

Changes in the business environment like competition, technology, government guidelines, global market, etc. bring changes in the nature of the job. This means changes in the demand of personnel, content of job, qualification and experience needed. HRP helps the organization in adjusting to new changes.

IV. Investment Perspective:

As a result of change in the mindset of management, investment in human resources is viewed as a better concept in the long run success of the enterprise. Human assets can increase in value as opposed to physical assets. Thus, HRP is considered important for the proper planning of future employees.

V. Expansion and Diversification Plans:

During the expansion and diversification drives, more employees at various levels are needed. Through proper HRP, an organization comes to know about the exact requirement of personnel in future plans.

VI. Employee Turnover:

Every organization suffers from the small turnover of labour, sometime or the other. This is high among young graduates in the private sector. This necessitates again doing manpower planning for further recruiting and hiring.

VII. Conformity with Government Guidelines:

In order to protect the weaker sections of the society, the Indian Government has prescribed some norms for organizations to follow. For example, reservations for SC/ST, BC, physically handicapped, ex-servicemen, etc. in the jobs. While planning for fresh candidates, HR manager takes into consideration all the Government guidelines.

VIII. International Expansion Strategies:

International expansion strategies of an organization depend upon HRP. Under International Human Resource Manage­ment (IHRM), HRP becomes more challenging. An organization may want to fill the foreign subsidiary’s key positions from its home country employees or from host-country or from a third country. All this demands very effective HRP.

IX. Having Highly Talented Manpower Inventory:

Due to changing business environment, jobs have become more challenging and there is an increasing need for dynamic and ambitious employees to fill the positions. Efficient HRP is needed for attracting and retaining well qualified, highly skilled and talented employees.

Human Resource Planning – Objectives :

The main objectives of HRP are:

(i) Proper assessment of human resources needs in future.

(ii) Anticipation of deficient or surplus manpower and taking the corrective action.

(iii) To create a highly talented workforce in the organization.

(iv) To protect the weaker sections of the society.

(v) To manage the challenges in the organization due to modernization, restructuring and re-engineering.

(vi) To facilitate the realization of the organization’s objectives by providing right number and types of personnel.

(vii) To reduce the costs associated with personnel by proper planning.

(viii) To determine the future skill requirements of the organization.

(ix) To plan careers for individual employee.

(x) Providing a better view of HR dimensions to top management.

(xi) Determining the training and development needs of employees.

Human Resource Planning – Organisation :

Every line manager is responsible for planning manpower of the respective department and the top management is responsible for the planning of resources for the entire organisation. The personnel department supplies relevant information and data to all the line managers and helps those regarding interdepartmental transfers, promotions, demotions etc. Personnel department also helps in using the techniques and forecasting the manpower.

Personnel department forecasts internal mobility surplus or deficit of human resources for the entire organisation, prepares action plans regarding redeployment, redundancy, employment, development and internal mobility and submits plans to the management at the top which either by its own or by appointing a committee reviews departmental plans and overall plans, make necessary adjustments and finalises the plans. Personnel department in its turn prepares modified plans for the departments based on finalised overall plan and communicates them to respective heads of department.

Personnel department may co-ordinate the control activity of human resource plan and it has to send coordinated reports to the management at the top for actual review, control and monitor the human resource system. The management at the top may appoint a committee consisting of heads of department and external identification of deviations, reasons thereof and steps to be taken to correct the deviations. The committee further helps the management in executing the programmes of corrections.

Human Resource Plan – Factors :

Several factors affect HRP. These factors can be classified into external factors and internal factors.

External Factors :

i. Government Policies – Policies of the government like labour policy, industrial relations policy, policy towards reserving certain jobs for different communities and sons-of the soil, etc. affect the HRP.

ii. Level of Economic Development – Level of economic development determines the level of HRD in the country and thereby the supply of human resources in the future in the country.

iii. Business Environment – External business environmental factors influence the volume and mix of production and thereby the future demand for human resources.

iv. Level of Technology – Level of technology determines the kind of human resources required.

v. International Factors – International factors like the demand for resources and supply of human resources in various countries.

vi. Outsourcing – Availability of outsourcing facilities with required skills and knowledge of people reduces the dependency on HRP and vice-versa.

Internal Factors :

i. Company policies and strategies – Company policies and strategies relating to expansion, diversification, alliances, etc. determines the human resource demand in terms of quality and quantity.

ii. Human resource policies – Human resources policies of the company regarding quality of human resource, compensation level, quality of work-life, etc., influences human resource plan.

iii. Job analysis – Fundamentally, human resource plan is based on job analysis. Job description and job specification determines the kind of employees required.

iv. Time horizons – Companies with stable competitive environment can plan for the long run whereas the firms with unstable competitive environment can plan for only short- term range.

v. Type and quality of information – Any planning process needs qualitative and accurate information. This is more so with human resource plan; strategic, organisational and specific information.

vi. Company’s production operations policy – Company’s policy regarding how much to produce and how much to buy from outside to prepare a final product influence the number and kind of people required.

vii. Trade unions – Influence of trade unions regarding number of working hours per week, recruitment sources, etc., affect the HRP.

Human Resource Planning at Different Levels:

Different institutions make HRP at different levels for their own purposes, of which national level, industry level, unit level, departmental level and job level are important.

i. National level – Generally, government at the centre plan for human resources at the national level. It forecasts the demand for and supply of human resource, for the entire nation.

ii. Sector level – Manpower requirements for a particular sector like agricultural sector, industrial sector or tertiary sector are projected based on the government policy, projected output/operations, etc.

iii. Industry level – Manpower needs of a particular industry like cement, textiles, chemical are predicted taking into account the output/operational level of that particular industry.

iv. Unit level – This covers the estimation of human resource needs of an organisation or company based on its corporate/business plan.

v. Departmental level – This covers the manpower needs of a particular department in a company.

vi. Job level – Manpower needs of a particular job family within department like Mechanical Engineer is forecast at this level.

vii. Information technology – The impact of information technology on business activities, human resource requirement and human resource plan is significant. It requires multi skilled expe rts, preferably less in number.

Human Resource Planning – Quantitative and Qualitative Dimensions :

Human resources have a dual role to play in the economic development of a country. On one hand they are the consumers of the products and services produced by the organizations while on the other hand they are one of the factors of production.

Along with capital and other factors of production, human resources can lead to increase in production and economic development. The rate of growth of human resources is determined by two aspects quantitative and qualitative.

Variables Determining the Quantity of Human Resources:

1. Population Policy:

Some population policies operate by influencing the factors responsible for growth such as fertility, marriage and mortality. These are known as population influencing policies. Another category of policies known as responsive policies are implemented to adjust to observed population trends with the help of programmes like health, nutrition, education, housing, etc. The aim of population policies is to achieve an optimum population for enhancing the country’s development.

2. Population Structure:

The structure or composition of the population is determined by two factors, sex composition and age composition.

(i) Sex Composition:

Sex ratio is the ratio of males to females in the population. It is the basic measure of the sex composition of the population of any area. Higher the number of females, higher will be the population growth rate in future.

(ii) Age Composition:

It is the distribution of population by age groups. Age composition is the result of past trends in fertility and mortality. The supply of labour depends on age composition as economically active population falls in range of 15-65 age groups.

3. Migration:

Net migration is another factor which causes changes in the population. Age and sex composition determine the natural growth in population, but for calculating the overall changes in population it is important to consider net migration also.

Net migration = total immigrants – total emigrants

A positive net migration will lead to a rise in population growth rate while negative net migration will reduce the growth rate of population. Migration can be both inter­regional and international.

4. Labour Force Participation:

The population of any country consists of workers and non-workers. The workers are the people, usually in age group of 15-65, who participate in economically productive activities by their mental or physical presence.

These include:

i. Employers,

ii. Employees,

iii. Self-employed persons, and

iv. Those engaged in family enterprises without pay.

The others in the population are the non-workers such as students, infants, elderly, beggars, retired people, inmates of jail or mental institutions, unemployed, etc. They do not contribute to any productive economic activity. It is the changes in the working population which affect the growth of human resources. The number of people who are unemployed but available for work also impacts the availability of labour.

Qualitative Aspects of Human Resource Planning:

The quantitative dimensions help to ascertain human resources in numbers while the productive power of human resources is assessed by the qualitative dimensions. For example, there may be hundreds of applicants for 20 vacancies, but out of these only a few may meet the quality standards required for the job.

Factors which determine the quality of human resources are:

1. Education and Training:

The quantity and quality of education and training received by human resources impacts their knowledge and skills. Education and training are important for the upliftment of both individual and society. It can be of two types, formal and informal.

Formal education is imparted through schools and colleges while informal education and training takes place through on-the-job training methods. Formal education stresses the transfer of theoretical knowledge, while informal education emphasizes on practical application of knowledge.

2. Health and Nutrition:

Health and nutrition along with education are vital for Human Resource Development. Health and nutrition impact the quality of life, productivity of labour and the average life expectancy.

Health status is determined by:

(i) Purchasing power of people.

(ii) Public sanitation, climate and availability of medical facilities.

(iii) People’s understanding and knowledge of health, hygiene and nutrition.

3. Equality of Opportunity:

Not all segments of people comprising human resources get equal employment opportunities. There is bound to be some discrimination.

The most common forms of discrimination are:

(i) Social discrimination – Discrimination on basis of gender, religion or social standing.

(ii) Economic discrimination – Discrimination based on financial positions or possession of wealth by the sections of workforce.

(iii) Regional discrimination – These are in form of discrimination between rural and urban population or between people belonging to different regions/ states.

Discrimination affects the quality and productivity of the human resources belonging to different sections of the population. The privileged classes get access to best education, nutrition and health facilities while underprivileged are deprived of their right share in the development process. For the overall, well rounded development of the country’s human resources, effective policies need to be implemented to deal with the problem of discrimination.

Human Resource Planning – Prerequisites :

i. There should be a proper linkage between HR plan and organizational plan.

ii. Top management support is essential.

iii. Proper balance should be kept between the qualitative and quantitative approaches to HRP.

iv. Involvement of operating managers is necessary.

v. Proper alignment between short-term HR plans and long-term HR plans should be there.

vi. HR plan should have in-built flexibility in order to adopt environmental uncertainties.

vii. Time period of HR plan should be appropriate to needs and circumstances of the organization.

Human Resource Planning – Relationship with Other Personnel Processes:

From a systems view, human resource planning is interrelated with many of the organization’s other endeavors in personnel management. The strongest relationship exists between human resource planning and selection. In fact, all selection efforts really are an integral part of the whole human resource planning process.

Organizations that have either stable or increasing human resource needs must go into the external labour market and hire employees even though they generally follow a promotion-from within policy.

In addition, human resource planning is related to both performance appraisal and training and development. Performance appraisals can pinpoint the skills that will be required for employees to move into higher-level positions via promotion, while training and development efforts may then be designed to provide these skills.

To meet organizational goals, human resource planning seeks to ensure that the organization’s demand for individuals at any particular time will be just met by available human resources. This view assumes that “stockpiling” employees at levels greater than needed and being understaffed are both undesirable.

This assumption represents a major difference between planning for human resources and planning for non-human resources. Although it is generally unacceptable to stockpile or build inventories of human resources, organizations may find it necessary or desirable to build up raw materials or finished-goods inventories.

It is unacceptable to hold human resource inventories for three reasons. First, human resources are costly and it may be difficult to justify the expense of excess personnel. There are sounder and more cost-effective options available to personnel planners in business firms. Second, excess people are not engaged in productive work, and are likely to be bored and frustrated by the lack of anything constructive to do.

Such boredom and frustration can create problems because excess people may make unnecessary work for productive people and may even inhibit the firm’s total productive efforts.

Third, since human resources, particularly skilled and professional people, may be in short supply, taking productive workers out of the economy’s labour pool may be considered socially unacceptable.

It is equally undesirable for an organization to operate with too few employees. As with “stockpiled” employees, individuals may feel frustrated, but in this case because of overwork rather than a lack of productive activity. This situation may also be dysfunctional to an organization’s goals.

Consider, for example, a department store during the holiday season with a shortage of sales personnel. In addition to the frustrations experienced by employees, such understaffing may also result in loss of employee efficiency.

Customers may respond to long lines and excessive waiting by taking their business elsewhere, with resultant loss of sales by the organization. Having too many or too few employees may create numerous problems for organizations-problems that can be reduced or eliminated through effective human resource planning.

Human Resource Planning – Cost Contribution Analysis :

Cost-contribution analysis of human resources is most important in HRP with a view to plan for more effective human resource system. The human resource components necessary to maximise employee contribution to the job and the organisation, and minimise the cost, should be determined in advance with the help of human resource accounting techniques.

The optimum human resource system should be planned and determined as the human resources system is the control system in the organisation because it emphasises the human contribution which critically influences the organisational effectiveness. Planning the human resource system includes determining the type of human resource components like creative and innovative skills and abilities, dynamism, leadership qualities, commitment, identification with the organisation, etc., considering the measures to acquire those human resources through recruitment, training and development and adjusting the components.

Similarly, cost of human resource should be streamlined and it should be taken as investment on human resources and not as mere cost. These items include remuneration cost (Pay, allowances, fringe benefits, other indirect costs), recruitment cost (cost of job design, advertising cost, cost for conducting tests, interview, reference checks, medical examination and induction), training costs, etc.

Human Resource Accounting (HRA) envisages capitalisation of all expenses like cost of recruitment, training etc. One of the systems of HRA i.e., replacement cost of human asset is an important tool for the formulation of manpower budget and plan for human resources.

Human Resource Planning – Responsibility :

Human resource planning is the responsibility of the personnel department. In this task, it is aided by the industrial engineering department, the top management and the team of directors of different departments. It is mostly a staffing or personnel function.

The overall responsibility lies with the Board of Directors because, as the manpower planning scheme of Hindustan Lever indicates, “these members are in a position to direct the future course of business, set appropriate goals for the management concerned in the formulation of personnel policies.”

The personnel department’s responsibility is “to recommend relevant personnel policies in respect of manpower planning, devise methods of procedure, and determine the quantitative aspects of manpower planning.”

The responsibilities of the personnel department in regard to manpower planning have been stated by Geisler in the following words:

(i) To assist, counsel and pressurise the operating management to plan and establish objectives;

(ii) To collect and summarise data in total organisation terms and to ensure consistency with long- range objectives and other elements of the total business plan;

(iii) To monitor and measure performance against the plan and keep the top management informed about it; and

(iv) To provide the research necessary for effective manpower and organisational planning.

Integration of Strategic Planning and Human Resource Planning:

Human resource planning like production planning, financial planning and marketing planning, should be a unified, comprehensive and integrated part of the total corporation. Human resource manager provides inputs like key HR areas, HR environmental constraints and internal HR capabilities and HR capability constraints to the corporate strategists. The corporate strategists in turn communicate their needs and constraints to the HR manager. The corporate strategic plan and HR plan thus incorporates both HR and other functional plans.

Corporations formulate plans to fit four time spans:

i. Strategic plans that establish company’s vision, mission and major long-range objectives. The time span for strategic plans is usually considered to be five or more years.

ii. Intermediate – range plans covering about a three year period. These are more specific plans in support of strategic plan.

iii. Operating plans cover about one year. Plans are prepared month by month in sufficient detail for profit, human resources, budget and cost control.

iv. Activity plans are the day-by-day and week-by-week plans. These plans may not be documented presents the link between strategic plan and human resource plan.

Strategic Plan Vis-a-Vis Human Resource Plan- Corporate — Level Plan :

Top management formulates corporate-level plan based on corporate philosophy, policy, vision and mission. The HRM role is to raise the broad and policy issues relating to human resources. The HR issues are related to employment policy, HRD policies, remuneration policies, etc. The HR department prepares HR strategies, objectives and policies consistent with company strategy.

I. Intermediate – Level Plan :

Large-scale and diversified companies organise Strategic Business Units (SBU) for the related activities. SBUs prepare intermediate plans and implement them. HR managers prepare specific plans for acquiring future managers, key personnel and total number of employees in support of company requirements over the next three years.

II. Operation Plan :

Operation plans are prepared at the lowest business profit centre level. These plans are supported by the HR plans relating to recruitment of skilled personnel, developing compensation structure, designing new jobs, developing leadership, improving work-life, etc.

III. Short-Term Activities Plan:

Day-to-day business plans are formulated by the lowest level strategists. Day-to-day HR plans relating to handling employee benefits, grievances, disciplinary cases, accident reports, etc., are formulated by the HR managers.

Human Resource Planning and Environmental Scanning :

Environment influences human resource management as well as business. Environmental scanning helps to know the nature and degree of environmental influence on human resource plan as well as business plan.

Managers have to scan the following environmental factors in particular:

i. Social factors including cultural factors, religious factors, child-care, educational programmes and priorities.

ii. Technological developments including information technology, people soft, automation and robotics.

iii. Economic factors including international, national and regional factors.

iv. Political factors including legal issues, laws and administrative factors.

v. Demographic factors including gender, age and literacy.

vi. Industry growth trends, competitive trends, new products, new processes, services and innovations.

The environmental scanning will help the managers to foresee the possible changes and make the adjustments in order to prevent the possible negative effects and get ready for the positive effects.

In addition to scanning the external environmental factors, organisations like Infosys, Satyam, Volvo and Southwest Airlines scan internal environmental factors. Organisational cultures, employees’ cultures affect the human resource plan as well as other areas of HRM. Organisations conduct cultural audits to know the impact of attitudes, values and activities of employees. As observed by Sears, employee positive attitude has direct and positive impact on customer satisfaction and revenue.

Most of the companies benchmark their standing and progress against each other as environmental scanning and HR planning are aimed at competitive advantage. Benchmarking is identifying the best HR practices like training and compensation in the industry, compare them with those of the firm and take steps to improve the practices to match with those of the best practices in the industry.

Target for benchmarking need not be a competitor, but the best in the industry, or companies in other industries. ‘Human Capital Benchmarking Report’ published by the Saratoga Institute provides information of 900 companies’ practices. Companies can use this source as well as the survey report of ‘Business Today’, published every year in addition to various research reports on pay structure, return on investment per employee, turnover rates, cost per hire, etc.

Human Resource Planning – Mapping an Organisation’s Human Capital Architecture :

The linkage between strategy and HR should focus on the development of core competencies. Some of the MNCs like Sony, Starbucks, Domino’s Pizza and South-West Airlines revolutionised their companies by developing core competencies.

These competencies helped these companies to have leverage by learning faster than others. Core competency is a portfolio of employee skills. Different skills of employees can be grouped based on ‘Strategic value’ they create and their distinctiveness to the organisation.

They are as follows:

i. Core Knowledge Workers:

This group of employees possesses firm-specific skills which are linked to the company’s strategy like R&D skills for pharmaceutical company and teaching skills for university employees. Companies invest in training of these employees, provide them with freedom and autonomy and offer higher salaries.

ii. Traditional Job-Based Employees:

This group of employees possesses skills that are important to the organisation, but are not critical/unique (like accountants, finance, marketing personnel). Companies invest less in developing these employees, but provide short-term financial benefits.

iii. Contract Labour:

This category of employees possesses skills, which are of less strategic value (like clerks, receptionists, drivers, security, etc.). This category of employees is normally hired from external agencies on contact basis. Organisations do not invest in training these employees and the employment relations are transactional.

iv. Alliance/Partners:

This group of employees has unique skills, but not directly related to organisation’s core function like lawyers, auditors and consultants. Companies do not employ them on regular basis, given their tangible link to the strategy but establish long- term alliances and partnerships with them.

HR managers make decisions with regard to whom to employ internally, whom to contract externally and the type of the employment relationship to be maintained. HR manager also considers the cost-benefit approach of internal employment vs. external contract in HRP.

v. Ensuring Fit and Flexibility :

Alignment between strategic planning and programmes, policies and practices of HR is vital and need to achieve two types of fit viz., external fit and internal fit.

A. External Fit:

External fit brings alignment between the business objectives/goals and major HR initiatives/practices. Growth strategy of the company is to be aligned with recruiting people with creative and innovative skills, providing freedom to them and investing on training for developing such skills. Low cost strategy is to be aligned with employing performance/productivity oriented employees.

B. Internal Fit:

Internal fit brings alignment among various HR policies and practices in order to establish configuration that is mutually reinforcing. Efficiency and creativity come from integrated effort of job design, HR Plan, recruitment and selection, training, performance management, compensation and motivation. Therefore, there should be integration among all HR functions. In addition, management should follow either individual approach or team approach for all HR functions.

Successful external and internal strategy and HRM alignment helps the organisation to increase organisational capability and competitive advantage.

vi. Cohort Analysis :

It is an analysis of risk factors of groups in which a group having one or more similar characteristics is closely monitored over time simultaneously with another group. It is one type of clinical study design and should be compared with a cross-sectional study. Cohort studies are largely about the life histories of segments of populations, and the individual people who constitute these segments. This method is used where case study approach is not feasible, creates too many statistical problems, or generally produces unreliable results. This is also called follow up study.

Cohort analysis helps to separate growth metrics from engagement metrics and helps to measure growth and identify growth problems.

Edgar Schein’s Human Resource Planning and Development System:

In his article entitled Increasing Organizational Effectiveness through Better Human Resource Planning and Development, Edgar Schein suggests that the process of HR planning and developing staff must take into account two important sets of needs – the needs of the company, and the needs and desires of the individual employees.

In the new millennium with companies showing less concern about employee career development, it’s useful to pay attention to the idea that when both employee and corporate needs are taken into account, the results, for both parties are much superior to the situation where only one set is considered.

Schein’s approach integrates HR planning and employee development.

This approach contains the following components:

1. Strategic business planning

2. Job/Role planning

3. Manpower planning and Human Resource Inventorying.

In addition staffing processes also form a part of the model

4. Job analysis

5. Recruitment and selection

6. Induction/socialization and initial training

7. Job design and job assignment

8. Development planning

9. Inventorying of development plans

10. Follow-up of development activities

11. Career development processes and a good deal more.

When doing an internal scan for purposes of human resource planning the questions that should be addressed.

When evaluating an organization’s current human resource capabilities for the purposes of human resource planning, the following questions and issues need to be addressed:

1. Are there any key forces affecting the organization’s operations (collective agreements, staffing issues, cultural issues, work/life balance, demographics, technology requirements, budget issues, expectation of clients)?

2. What knowledge, skills, abilities and capabilities does the organization have?

3. What is the company’s current internal environment? What elements support the company’s strategic direction? What elements deter the organization from reaching its goals?

4. How has the organization changed its organizational structure? How is it likely to change in the future?

5. How has the organization changed with respect to the type and amount of work it does and how is it likely to change in the future?

6. How has the organization changed regarding the use of technology and how will it change in the future?

7. How has the company changed with respect to the way people are recruited?

8. What is the public’s (or customers’) perceptions of the quality of the organization’s products, programmes, and/or services? What is being done well? What can be done better?

9. Are current programmes, processes or services contributing to the achievement of specific organizational goals?

When doing an external scan of the environment for purposes of human resources planning (HR planning), we should look for:

In order to do human resource planning, we need to have a sense of both the current external environment, and anticipate things that may happen in the future in the labour market place. We do this via an external scan or environmental scan that can address the following issues and questions.

1. How is the current external environment? What elements of the current environment are relevant to the company? Which are likely to inhibit the company from arriving its goals?

2. What are the company’s specific issues and implications of these issues? What key forces in this environment need to be addressed and which ones are less critical?

3. What is the impact of local trends on the company (demographic, economic, political, intergovernmental, cultural, technology, etc.)?

4. Are there comparable operations that provide a similar service? How might that change? How would that affect the company?

5. Where does the work of the company come from? How might that change and how would it affect the organization?

6. How might the external environment differ in the future? What forces at work might change the external environment? What implications will this have for the organization?

7. What kinds of trends or forces affect similar work in other jurisdictions?

8. What kinds of trends or forces affect the company’s partners/stakeholders and customers?

Human Resource Planning – Benefits :

Human Resource Planning (HRP) anticipates not only the required kind and number of employees but also determines the action plan for all the functions of personnel management.

The major benefits of human resource planning are:

i. It checks the corporate plan of the organisation.

ii. HRP offsets uncertainties and changes to the maximum extent possible and enables the organisation to have right men at right time and in right place.

iii. It provides scope for advancement and development of employees through training, development, etc.

iv. It helps to anticipate the cost of salary enhancement, better benefits, etc.

v. It helps to anticipate the cost of salary, benefits and all the cost of human resources facilitating the formulation of budgets in an organisation.

vi. To foresee the need for redundancy and plan to check it or to provide alternative employment in consultation with trade unions, other organisations and government through remodeling organisational, industrial and economic plans.

vii. To foresee the changes in values, aptitude and attitude of human resources and to change the techniques of interpersonal, management, etc.

viii. To plan for physical facilities, working conditions and the volume of fringe benefits like canteen, schools, hospitals, conveyance, child care centres, quarters, company stores, etc.

ix. It gives an idea of type of tests to be used and interview techniques in selection based on the level of skills, qualifications, intelligence, values, etc., of future human resource.

x. It causes the development of various sources of human resources to meet the organisational needs.

xi. It helps to take steps to improve human resource contributions in the form of increased productivity, sales, turnover, etc.

xii. It facilitates the control of all the functions, operations, contribution and cost of human resources.

Human Resource Planning – Problems:

Though HRP is beneficial to the organisation, employees and trade unions, some problems crop up in the process of HRP.

Important among them are:

1. Resistance by Employers and Employees:

Many employers resist HRP as they think that it increases the cost of manpower as trade unions demand for employees based on the plan, more facilities and benefits including training and development. Further, employers feel that HRP is not necessary as candidates are/will be available as and when required in India due to unemployment situation. Employers’ version may be true about unskilled and clerical staff but it is not true in the case of all other categories as there is shortage for certain categories of human resources.

Trade unions and employees also resist HRP as they view that it increases the workload of employees and prepares programme for securing the human resources mostly from outside. The other reason for their resistance is that HRP aims at controlling the employees through productivity maximisation, etc.

2. Uncertainties:

Uncertainties are quite prominent in human resource practices in India due to absenteeism, seasonal employment, labour turnover, etc. Further, the uncertainties in industrial scene like technological change, marketing conditions also cause uncertainties in human resource management. The uncertainties make the HRP less reliable.

3. Inadequacies of Information System:

Information system regarding human resources has not yet fully developed in Indian industries due to low status given to personnel department and less importance attached to HRP. Further, reliable data and information about the economy, other industries, labour market, trends in human resources, etc., are not available.

Human Resource Planning – Recent Implications :

Most of the organisations, employed human resources without proper HR plans before 1990s. This was more acute in the public sector whose objective was creation of employment opportunities. The absence of human resources planning before 1990s led to the following implications in Indian companies.

(i) Overstaffing – Most of the organisations are found to be overstaffed compared to their counterparts in other countries.

(ii) VRSI Golden-handshake – The absence of human resources planning led to overstaffing. Consequently, most of the organisations announced VRS/Golden-handshake programmes in order to reduce the consequences of overstaffing.

(iii) Delayering and Downsizings Most of the organisations de-layered their organisations and announced downsizing programmes to rectify the consequences of overstaffing.

Human Resource Planning – Recent Trends :

Unfortunately, the human resource planning efforts of organizations have often been inadequate by failing to emphasize the truly systematized approach geared toward meeting overall objectives.

As Lopez and others have observed:

Some organizations have perceived manpower planning primarily in terms of budgeting to control labour costs; others have viewed it as a management development technique; still others see it as a table of back-ups and replacements for current employees; and finally, others have viewed it as a means of establishing a human resource information system and a personnel inventory.

Since each of these approaches is necessarily limited in scope, the state of the art in human resource planning has limped along quite slowly.

Toward More Sophisticated Human Resource Planning:

In recent years, both personnel practitioners and researchers emphasized some of the basic facets of personnel decision making (1) taking systems and contingency approaches, and (2) developing more sophisticated human resource forecasting and planning models. For example, the growth of equal employment opportunity regulations in recent years has increased the awareness of human resource planners of the effects of external changes on personnel systems.

The observations are in order regarding these more sophisticated approaches. First, more complex planning systems have generally been used in larger firms. Large organizations generally must undertake complex human resource planning and can afford the higher costs of such approaches.

Second, although a wide range of human resource models have been developed, some of these models have ignored so many “real life” personnel variables that they have had virtually no practical application. On the positive side, there have been numerous quantitative models that have been very useful to organizations.

There are a number of reasons for the recent increase in the use of more sophisticated human resource planning models. For example, organizations simply have been growing larger and more complex, requiring more sophisticated approaches. This has been especially true in those organizations in which interdependencies have increased.

The invention and development of the computer has made possible the analysis of complex human resource problems that would previously have been so time-consuming as to be cost prohibitive or virtually impossible to deal with by manual computations.

“The manpower mix in organizations had gradually come to focus around highly skilled managerial and technical talent.” Such personnel have at times been in short supply, and more of a lead time has been required for their training and development.

Once an integrated, well-thought-out human resource planning programme has been initiated, managers tend to appreciate its benefits and work together with the firm’s human resource specialists in developing viable programmes-“they are more willing to plan in this area, if only they are shown how to begin,”

Problems with Sophistication in Human Resource Planning:

Despite these reasons for the growth of more sophisticated human resource planning, such approaches face a number of problems:

1. There is an inherent mathematical complexity associated with efforts to model human resource systems.

2. Always there is a lack of certainty surrounding human resource needs in the future, coupled with the existence of an acquisition lead time for meeting those needs. Even if an organization’s human resource planning experts were completely uncertain about the number of operation researchers that would be needed at a point in future, the organization would face no problems if it could at that future time instantaneously obtain any number of such personnel to meet its objectives.

However, lead times are needed to recruit and train new personnel and to train and promote existing employees for new positions or assignments. Acquisition lead times have become more of a problem in recent years because of the needs for highly skilled managerial and professional personnel.

Since this trend is expected to continue in future years, the problem of acquisition lead times creates forecasting difficulties for most organizations.

Finally, human resource plans must be updated more frequently in firms (or in any of their subsystems) in which greater uncertainty exists. As one observer has observed-

“Increasing instability and the greater uncertainties associated with certain job requirements (e.g., research and development or marketing) indicate a requirement for more up-to-date information on emerging needs. This manpower data is increasingly subject to change, and organizational needs dictate timely information with appropriate systems support”.

Related Articles:

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• Features of Human Resource Planning
• Definition of Human Resource Management