Planning for the future is an integral part of every business, regardless of industry. Human resource planning (HRP) is no different from a typical supply and demand scenario: It's about understanding how to utilize your available talent and anticipating business needs to know what talent will be needed in the months and years ahead.
Keeping a strategic eye on your company's staffing needs helps avoid worker shortages and leads to a smoother hiring process. In this article, we define the meaning of human resource planning, outline why effective human resource planning is crucial, and share some strategies to hone your HR planning process.
What Exactly Is Human Resource Planning?
HRP is a type of forecasting done by your current human resources team to plan for hiring and training initiatives. It's a proactive measure that takes into consideration any talent gaps within your organization and starts the recruitment process to address them.
This type of workforce planning involves recruitment, training and development, and talent retention. It's an essential part of organizational strategy because it helps businesses plan for their future needs and ensure they have the optimal number of employees.
4 Steps to Strategic Human Resource Management
HR professionals have the unique ability to assess competency within the existing workforce and produce an action plan to obtain new employees to supplement future demand. Your HR department plays a critical role in these four steps.
1. Assess the Potential of Current Employees
HR managers typically consult department leaders to better understand the new skills they would like their current staff to develop or the areas they see for improvement.
In addition to manager feedback, other factors can help you better understand the potential of your current workforce, like:
- How many employees there are in the organization
- How many employees there are in each department
- The number of aging employees who might soon retire
- Employee skill sets
- The required education or training for each role within the organization
- Employee performance within their current roles
2. Predict and Plan for Future Changes
Studying the team's current metrics can help predict future outcomes and human resources’ needs. There are two main types of forecasting that help:
Supply forecasting: This is when HR evaluates current team strengths to see how they fit in with the larger business strategy. The HR strategy might involve planning for expected leaves, promotions, layoffs, and retirements that create potential employee vacancies.
Demand forecasting: This type of forecasting addresses your future business goals and the kinds of talent and number of employees required to support them. For example, if a web-based marketing agency wants to expand into mobile projects, they might set a goal for onboarding 10 full-time mobile designers and finding another five mobile developers for outsourcing on a contract basis.
These forecasting methods support effective human resource planning and provide a sense of stability during your organization’s growth process.
3. Use Gap Analysis to Assess Potential Employee Vacancies
Gap analysis is a form of performance management. It evaluates where employees are with their performance and where your organization will need them to be in the future by:
- Studying the performance level of your current employees, often using assessments
- Setting the optimal performance level organization-wide
- Identifying the gaps between the present and ideal performance levels
- Creating strategic, employee-focused plans to get from current to optimal levels, whether it's through training current employees or recruiting new ones
The gap analysis is crucial in the human resource planning process. It highlights the other factors that can influence employee performance, such as company culture, benefits and compensation, and training and development opportunities.
4. Incorporate Learnings Into the Larger Business Strategy
After assessing your current human capital and where the talent gaps are, you can work on a strategy with managers. Deciding whether you want to train existing employees or hire new employees will determine both your short-term and long-term strategies. One involves investing in training programs so employees can gain new skills, while the other will include a recruitment plan — but both will involve the HR team.
How Smart Human Resource Planning Can Benefit the Whole Company
An effective human resource plan helps the HR team better understand the current and future needs of the organization and develop strategies to support those needs. Keep reading for a few more reasons why human resource planning is essential for your business.
Strengthen Career Development in Current Staff
Developing the skills and strengths of your employees adds value to your organization and saves on exponentially high recruiting costs. It can also serve as a source of job satisfaction if employees feel that you're investing in their growth and development, creating loyalty.
Meet the Challenge of Industry Changes Head-On
First, you must understand your business' growth goals in relation to the broader industry. Accepting the coming changes and putting a plan together is the next step.
If your business is shifting its priorities or expanding, your HR team can help handle talent needs and plan strategic budgets so you’ll have an abundance of resources ready to help you grow.
Stay Current and Beat Out Competition
HR professionals keep their finger on the pulse of hiring trends and what attracts talent (benefits, work-life balance, and other perks), and they can make sure the job offers you're putting out are competitive. Regular HR resource planning aligns you with the current marketplace.
Support Organizational Growth
The workplace is an ever-changing landscape with employees at different stages of their tenure, and a lot can change in a few years!
Whether you have employees who are retiring or changing career paths altogether, it’s easier to predict those changes and anticipate future needs once you’ve done human resource planning.
New Business Objectives Require Strategic Human Resource Planning
The HR team is like the heart of your organization since they organize and manage your most valuable asset: your people. When the HR team has helpful resources and tools that make their work more efficient, it can make a world of difference.
Human resource planning revolves around elements of supply and demand, in combination with a thorough understanding of the available talent and the business needs. This forethought helps create a smoother recruitment process and better productivity within both the HR team and the larger organization. Incorporate human resource planning to sidestep talent shortages and keep the talent cup brimming with great options.
Pulpstream helps automate time-consuming tasks so that your HR team can focus on other more urgent priorities. Whether it's onboarding, training and development, or personal improvement planning, these employee processes all require heavy documentation. Pulpstream helps streamline processes and increase productivity with thoughtful features that make collaboration across the company easier and faster.
Don't arrive late to the party, only to discover that the competition scoops up all the best talent. Request a demo to find out how Pulpstream can effortlessly support your talent management process.
