A Complete Guide On Human Resource Planning

By Jacki Kilbride - Last Updated on March 10, 2020
A Brief Explanation About Human Resource Planning

Is your human resource strategy more of a fingers-crossed, hope-for-the-best type of plan than a concrete, actionable map to success? Are you sick of rushing to replace employees while your staff works overtime? The Center for American Progress estimates that turnover costs an organization 213% the cost of salary and benefits for the position. Isn’t there some way a company can cut down on that?

It turns out, there is. Human resource planning is something that just about every organization can benefit from. So, what exactly is it, and how can your company put it to work?

What is Human Resource Planning

When a company has more than one position, it becomes necessary to find and maintain an adequate amount of quality employees. Human resource planning is one way to do that. HR planning refers to the process of matching the right employee for a given job, without staffing too few or too many people. This takes a great deal of planning and foresight to successfully achieve.

Need for Human Resource Planning

Any organization with multiple employees has a need for human resource planning. An organization that shies away from HR planning runs the risk of either over or understaffing, not to mention hiring incompetent employees and wasting money on training.

Importance of Human Resource Planning

A holistic approach to HR planning is important for a number of reasons.

  1.  Assessing Future Personnel Needs:

    It requires an organization to consider things such as turnover and anticipated growth. This process allows the organization to determine accurate hiring goals.

  2. Foundation for Other HRM Functions:

    Other facets of human resource management, such as training and benefits, directly hinge on the hiring process.

  3. Investment Perspective:

    It is an investment in your organization. It does take money to hire and retain HR staff, but trying to operate without a functional HR department would cost much more in the long run.

  4. Expansion and Diversification Plans:

    If your organization plans to expand, human resource planning can help achieve that. Likewise, if you need to diversify your workforce, it may require some degree of planning.

  5.  Employee Turnover:

    Turnover is stressful for an entire company. Proper HR planning can greatly reduce this stress by anticipating turnover before it happens, leading to more continuous and consistent staffing.

  6. Government/Legislative Changes:

    Laws and acts such as the Equal Opportunity Act and the Americans With Disabilities Act can have a direct impact on the hiring process. It involves staying abreast of changes to these important acts and ensuring organizational compliance.

  7. International Expansion Strategies:

    If your organization has an eye overseas, human resource planning is a must. These kinds of expansions require competent staff, and the best way to obtain them is through HR planning.

  8. Having Highly Talented Manpower Inventory:

    It’s one thing to have a body in a chair. It’s another thing entirely to have an employee who meets or exceeds expectations. It leads to finding and retaining an inventory of talented, qualified staff.

  9. Macro Risks Drive a Systematic Approach to Human Resource Planning:

    A systematic approach is key because the following of a set process helps minimize risks and oversight.

  10. Technological Change and The New Generation:

    As technology advances and Gen-Zers increasingly enter the workforce, recruiters will need to adapt how they reach potential employees. It involves staying ahead of change and making use of new technologies to attract new hires.

( Also Read: HR Planning Tools and Techniques )

Steps in Human Resource Planning Process

As with any process, there are several steps you should follow if your organization decides to begin human resource planning.

  • Analyze Organizational Objectives

    Determine what it is that your organization wishes to accomplish in the next year or so– whether that’s growing by 5% or reducing turnover by 10%, make sure your objectives are concrete and attainable.

  • Inventory Current Human Resources

    Take a look at your current HR setup. Is your department adequately staffed? Are they trained in HR-related issues?

  • Forecasting Demand and Supply of Human Resource

    Consider what the demand and supply for your product, manpower, and human resources may be over the next year.

  • Estimating Manpower Gaps

    Once you know what the supply and demand for manpower will be, you can estimate where the gaps and surpluses will occur.

  • Formulate the Human Resource Action Plan

    Using that information, you can then begin to come up with a concrete and actionable plan to address your human resource needs

  • Integrating/Implementing the Plan

    Turn your words into action by integrating your plan into your organization’s culture.

  • Monitoring, Control, and Feedback

    Evaluate as you go, solicit feedback from recruits and existing employees, and adjust the plan accordingly for best results.

Features of Human Resource Planning

A successful human resource planning strategy may look different from organization to organization. It should, however, have some common features.

  • Well Defined Objectives:

    As with any type of planning, it’s important to clearly define your objectives. Make your goals concrete and actionable– for example, it’s better to say, “we’re going to hire two new employees in the IT department by May” than “we need to beef up the IT department this year”.

  • Determining Human Resource Needs:

    It’s also important to know what your HR department requires in order to reach your objectives. The needs of the HR department should be determined and met so that there are no roadblocks to meeting your goals.

  • Keeping Manpower Inventory:

    It involves maintaining an available inventory of qualified manpower. This can be a huge benefit in the event of turnover or sudden growth.

  • Adjusting Demand and Supply:

    One of the more trying features of human resource planning is the adjusting of supply and demand. When there is a demand for the product or service, the workforce must adapt. When demand decreases, the workforce must again adapt. A savvy HR person knows how to plan and adjust accordingly.

  • Creating Proper Work Environment:

    It also involves creating an atmosphere that is conducive to productivity in the office. This can pertain to training, development, or even just ensuring the basic safety and security needs of employees are met.

Benefits of Human Resource Planning

  • A Better View to the business decision

    HR planning leads to a better overall view of the business’s decisions by employees and the public. The actions taken by the organization become systematic and process-oriented, thus taking personal feelings out of the equation.

  • Retaining top talents

    When a human resource plan is thoughtfully executed, organizations can better retain top talents. As any organization knows, getting a talented individual hired in is only half the battle– incentivizing them to stay can be another matter entirely.

  • Addressing the organization’s manpower needs

    Human resource planning identifies a company’s needs with regards to manpower, thus allowing the organization to effectively address them.

  • Minimum Cost

    Attracting and retaining talent costs money, there’s no getting around it. Human resource planning, however, allows organizations to minimize the money they spend on these areas, thus reducing costs overall and leading to more efficient operations.

  • Ensuring that the right people are hired

    A solid human resource strategy helps organizations attract the right person for the job. This is especially important for any type of specialized position, where a specific background or knowledge is required, but it can also extend to more general positions. Finding an employee with the right attitude, for example, can greatly improve the experience of customers at a convenience store.

  • Facilitating expansion programs

    If your business plans to expand, human resource planning can help your business prepare to do so with minimal growing pains. If you know there are going to be six openings coming up in the next year, you can begin to recruit for them now instead of waiting until it’s too late.

  • Training employees

    Even the right employee for the job can’t counteract a lack of training. Human resource planning considers training an important part of the recruitment and retention process.

  • Managing employees

    Employee management can be a challenge for any organization, big or small. A solid human resource plan ensures the right employees are placed in management roles.

  • Improved Utilization

    HR planning can improve employee utilization by connecting the right employee with the right position. This increases productivity and leads to a more knowledgeable workforce.

  • Management Development

    Hiring entry-level employees is tough– hiring management can be downright impossible. A human resource plan can direct your organization to potential employees that can be successfully groomed for management.

  • Information Base

    A human resource plan serves as an information base for an organization. It contains data on the organization’s growth, hiring strategy, training plan, and retention. This can help the organization make more informed decisions in the future.

  • Coordination

    One result of a successful human resource plan is coordination amongst different departments. There must be communication between departments to ensure accurate job descriptions and staffing predictions, for example.

  • Corporate Asset

    A human resource plan can be a tremendous asset to any corporation, particularly larger ones or companies with multiple locations and moving parts.

  • Gradual Growth

    HR strategies can ultimately lead to gradual growth for an organization, which is sustainable and ideal. Unchecked growth can put unnecessary strain on an organization and actually harm it in the long run.

  • Coping with change

    Organizations must adapt to changes in the environment, both locally and abroad. A human resource plan can help a company adapt to changes, potentially even staying one step ahead.

  • Adjusting with the Rapid Technological Change

    Technological change occurs at a rapid pace, and it’s critical for organizations to keep up. Human resource plans can help make sure that your company does not get left behind.

Final Thoughts

Human resource planning is an important part of a holistic approach to HRM. A good plan allows your organization to anticipate turnover and future staffing needs, adapt to change, and to grow, among other things.

Winging your approach to HR can work in the short term, but a solid human resource plan is necessary for true and manageable growth. If your organization does not have a plan yet, consider putting one together today.

Jacki Kilbride

Jacki Kilbride | Jacki Kilbride is a freelance writer and marketing nerd who recently earned her MPA. When she’s not writing or diving into research, she can usually be found hiking or traveling with her family.

Jacki Kilbride

Jacki Kilbride | Jacki Kilbride is a freelance writer and marketing nerd who recently earned her MPA. When she’s not writing or diving into research, she can usuall...

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