What is Human Resource Planning?
Human resources planning is the core of an effective business. Read any popular business book on running a successful company, like Good to Great, and you will see success comes from having the right people, using them effectively, and treating them right. People in your organization take the actions that differentiate the business, create products, serve customers, and influence the business’s profitability. Creating plans to utilize, staff, manage, and reinforce your human resources team makes the difference in successful business execution.
Starting Point: Strategic Roadmap
The foundation of who you are and what you stand for, once defined, does not change much. Likewise, before human resources planning can occur, organizations must first clearly define these qualities and why they exist, and how they will compete in the market. Having this roadmap results in the purpose and objectives that guide human resources.
Human Resource Planning Increases Effectiveness
Your business vision (the next mountain you plan to climb) and business strategies (how you will get there) change constantly. In the words of philosopher Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” Organizations must constantly adjust their business strategies and priorities to fulfill their purpose and achieve their desired objectives. Breaking business strategy into clearly defined objectives, actions, and steps from departments to individuals ensures ownership and accountability. Aligning people practices and HR plans with strategic roadmaps will incorporate plans into your cultures and the actions of your employees – ensuring implementation.
Human Resources Planning / People Planning
HR Planning considers people practices and human resources functions that support and achieve the organization’s highest priorities, strategy, and objectives. Plans must address questions and desired actions in the following key areas:
- Staffing – How many employees and which skills are needed to support your business plan? Who can be promoted from within? Which positions will be hired from the outside, and how will you find them? What turnover do you expect, and how will you deal with it? What staffing formulas help determine the correct number of employees for each position? Do you have succession backup plans for critical positions, and have you started developing new executives? Do you have clearly defined lines of authority and organization charts to help employees know who is in the organization? Are any changes needed in your onboarding/orientation process to get employees up-to-speed quickly and clear about business strategy?
- Performance – Departments and individuals must clearly define their targeted performance plans and expectations to achieve overall business plans and objectives. What are the key performance indicators for the department and each individual? Has anyone’s job or job description changed?
- People Utilization – Do you need to utilize employees’ talents, skills, and abilities differently to achieve desired business plans? Should roles and responsibilities change? What innovations, products, or services are needed? How can you use your people to differentiate yourself from the competition? What culture, perception, or attitude changes are needed?
- People Development & Training – What employee training and development is needed to achieve desired plans? Will training and development take place internally, or do you bring in outside resources? When, how, and for whom will training take place?
- Communications – How will you communicate business strategy and priorities to employees? How will you get employee buy-in and support?
- Systems & Policy – Do any policies, procedures, or practices need to change to support and align with business strategy? Do you have clearly defined practices and accountability for all essential business needs? What is the new computer software needed?
- Compensation – Do you need to change any of your base pay, commissions, or bonus plans to support your business strategy better? What are the new bonus and incentive targets and rewards? What changes need to occur in pay practices to drive desired results and expectations? What are your base pay plans and budget? How will base pay increases be implemented to reward and reinforce strategy?
- Rewards & Recognition – How will you reward and recognize desired behaviors and results to reinforce key strategy achievements? Do you have formal and informal recognition programs and budgets in place to empower leaders and employees with the ability to recognize and reinforce? What changes to the existing program need to occur?
- Leadership – Do leaders at all levels within the organization support business plans with their actions and words? Are responsibilities, deadlines, and goals clear? How will leaders communicate expectations and hold employees accountable for the achievement of business plans and overall performance? What training is needed for leaders?
Human resources planning is essential for organizations to execute desired business plans. Creating clearly defined reasons for existence, a vision of the desired direction, and a strategy of how the company will get there sets the direction for HR planning.
HR plans in staffing, performance, how people will be utilized, training, communications, systems, compensation, rewards, and leadership help ensure overall success. Planning is not a one-time exercise. Managing and adjusting within these critical areas should occur throughout the year, ensuring the success of desired business plans.