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Strategy

Human resource planning - Process steps

By 

 — October 20th, 2007

Human resource planning - Process steps

In today's knowledge economy an organization's most valuable asset is its human resources – its employees. Their skills and knowledge, as well as their relationships with key customers, can often be irreplaceable and can determine an organization's success. So much so, human resource planning is now an integral part of an organization's strategy.

The human resource planning is a four-step process that analyzes current human resources, forecasts future requirements, identifies areas where there are gaps, and then implements a plan to tighten up those gaps. Breaking it down, the objectives of human resource planning are to make sure you have the right number of people in the right jobs at the right time.

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What are the steps in the human resource planning process?

Step 1: Assess your current human resource capacity

Start by looking at your current human resources state of play. This will involve analyzing the HR strength of your organization across factors including employee numbers, skills, qualifications, experience, age, contracts, performance ratings, titles, and compensations. During this phase, it's a good idea to gather insight from your managers who can provide real-world feedback on the human resource issues they face, as well as areas in which they think changes are necessary.

Step 2: Forecast future HR requirements

You will then need to look at the future HR needs of your organization and how human resources will be applied to meet these organizational goals. HR managers will typically look at the market or sectoral trends, new technologies that could automate certain processes, as well as industry analysis in order to gauge future requirements. Of course, there are a number of factors affecting human resource planning such as natural employee attrition, layoffs, likely vacancies, retirements, promotions and end of contract terms. Above all of this, you will need to understand the goals of the organization: are you entering a new market, launching new products or services, expanding into new areas. Forecasting HR demand is a complex task based on several dynamics. Being informed and having a seat, or at least an ear, at boardroom level is essential if you are to make accurate HR projections.

Step 3: Identify HR gaps

An effective human resource plan walks the fine line between supply and demand. By assessing the current HR capacity and projecting future requirements you should have a clear picture of any gaps that exist. Using your HR forecast you can better judge if there will be a skills gap, for example. Should you upskill existing employees or recruit employees who are already qualified in specific areas? Are all current employees being utilized in the right areas or would their skills be better suited to different roles?

Step 4: Integrate the plan with your organization's overall strategy

After you've assessed your current human resources capacity, projected future HR demands and identified the gaps, the final step is to integrate your human resources plan with your organizational strategy. On a practical level, you will need a dedicated budget for human resources recruiting, training or redundancies, and you will also need management buy-in across the business. You will need cooperation and the necessary finances in order to implement the plan and a collaborative approach from all departments to put it into practice. Learn about the benefits of strategic human resource management.

What is the importance of human resource planning?

  • HR department is prepared for changing requirements
  • Your organization is not caught off-guard in the shifting workforce market
  • Adapt faster to the introduction of automation or advanced technologies
  • Gain competitive advantage through rapid rollout of new products or into new markets
  • Better anticipate the need for critical skills during growth phases
  • Be proactive by honing the skills of current workforce in order to move into new areas
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