Human resources planning is the process of identifying current and future human resources needs within an organization, across an industry sector, or even at a national level when significant trends affect an entire working population.
HR planning within an organization involves:
- Understanding the vision of the organization
- Understanding the external context in which that vision will be expressed
- Projecting future HR needs based on that vision and context
- Securing the right people
- Developing the capacity to successfully meet the organization's evolving needs
Understanding the Vision
As an HR Professional planning to meet future human resources requirements, you first must understand the vision of the organization and be able to quantify it in terms of future staffing needs; from the addition of executive and/or management roles through to an expanded sales force and incremental front line positions.
For smaller organizations, this might be as simple as sitting down with the CEO and fleshing out what the ideal organizational chart will look like three years from now, and then creating a plan to fill any empty roles.
For larger organizations, it will require analysis of existing numbers to arrive at some metrics that can be used to estimate future hiring expectations (e.g. average gross revenue per employee, ratio of managers to reports) and then applying those metrics to business growth projections that reflect the vision.
Understanding the External Context
It’s also important to remember that businesses and other organizations don’t operate in a vacuum. Never has this been more apparent than now. With emerging demographic shifts, rapidly changing technology, and clear differences in employee expectations, HRs ability to project and meet future human resources needs is being severely challenged.
While a clear organizational vision will drive the demand side of the human resources planning equation, external forces will shape, and sometimes limit, the supply side. You will have to factor these labor market realities into your planning process, while also considering other changes in the labor landscape, such as labor law and regulatory trends.
Projecting Future Needs
Arriving at a realistic assessment of net future HR needs involves a number of factors including:
- Projected workforce requirements based on the vision (growth, new markets, new product lines, acquisitions, etc.);
- Estimated backfill requirements to replace attrition due to retirement and typical workforce fluctuations; and
- Anticipated workforce reductions due to automation or technology adoption that improves productivity.
If a review of the external environment suggests that meeting future hiring needs will be difficult, due to limited supply or a lack of required skills, then possible strategies for addressing those shortfalls should form part of your long-term HR plan.
Such strategies might include the development of an internship or mentoring program to cultivate early relationships with future hires; collaborating with post-secondary institutions to address skills gaps; or investigating the viability of shifting one or more business units offshore where labor is more readily available.
At a minimum, your planning process should bring any anticipated challenges in meeting future hiring needs to the attention of the management team, since potential talent shortages will impact the organizations ability to achieve its vision.
Securing the Right People
Once future HR needs and potential shortfalls have been identified, the next step is to create a hiring plan that identifies the positions, numbers, and anticipated timelines for future hires. An assessment of existing talent should be undertaken to determine which positions might be filled internally, through promotions or lateral moves that support the career objectives of current employees. By looking internally first, you reap the added benefit of improved retention by offering opportunities for growth and advancement within the organization.
A significant part of human resources planning will involve developing the capacity your organization needs to support its vision and encompasses career development plans for all employees, including those being groomed for advancement. At this stage you begin matching the developmental needs of your employees with the anticipated HR needs of the organization over the long term, and then mapping out training and development plans that bring these end goals together at the right time.
The Value of Pro-active HR Planning
Human resources planning, by its very nature, is pro-active; providing a link between day-to-day human resources management activities and the overall strategic direction of an organization. Implementing good HR planning practices demonstrates the strategic importance of the HR function to the organization, while delivering a number of benefits, including:
- The development of a qualified pool of candidates ready to fill key areas and positions as needed
- Better appreciation of current employees on the part of managers as they become more aware of existing skill sets and career development goals
- Improved employee satisfaction and retention as a result of clear career paths and development plans
- Strategies to retain organizational knowledge
- Strategies to address anticipated gaps in the labor pool
- Increased ability to achieve business vision and goals
Although the type and extent of human resources planning will differ from one organization to the next, it is essential to business stability and sustainability to have an established process for meeting long-term staffing requirements.
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