The important process of human capital planning
Businesses can change fast – that means the needs of a business can fluctuate and companies need to be ready to keep up with the changes that will help them continue to grow their success. One of the most important areas to focus on in the battle to keep up with business growth in the area of human capital. Human capital management always includes planning for the future.
Human capital planning means looking past the current human capital situation at a company and being able to predict future needs and plan for any changes. The objectives of human resource planning include being able to support all future business goals and ensure both business tasks and business strategy have the right people – and the right number of people – in place to keep moving forward.
What are the crucial steps for human capital planning process?
Here are some of the most important human capital planning process steps.
1. Understand how human capital relates to other business goals
Human capital cannot be separated from overall company objectives, as human capital is meant to support the business goals and execute strategies. If the yearly company review rolls around and a new corporate goal is to break into international markets within the next 12 months, the HR department will know that it will have to source additional candidates to support these goals, or work with other business leaders to re-allocate staff to find internal candidates who can support these goals.
2. Assess your current human capital resources
This means assessing the strengths, weaknesses, and capabilities of your current employees. Do they fit the needs and requirements of the position or department? Are their performance reviews positive? Do they show potential for leadership or would they be a better fit in another department?
Connect with management to find out what changes they would recommend, which can help support the decision-making process down the line. Assessing your human capital assets is an important step in understanding if these assets are supporting the current business goals overall and going through this crucial step can help you identify any potential gaps in employment and human capital.
3. Plan for additions or changes
Planning ahead is how disasters and setbacks are avoided. Regularly communicating with leadership and internal stakeholders is important to stay informed. If your business is predicting an uptick in business over a particular season or supporting a new product or service launch, it’s important to know the timing around that to be able to build your recruiting efforts.
If your company is branching out into new markets, it is important to understand if that will require additional staffing or restricting of departments. If your business is struggling to pay shareholders, HR leadership needs to be aware of this so that it can plan for potential layoffs. Having as much advance notice on goals as well as circumstances is key to best planning practices.
4. Use the best practices that are best for your business
Ultimately, the processes that support your best planning might depend on your specific business or industry. Startups, for instance, have very different goals than a Fortune 500 companies, as well as fewer data to be able to support predictions. Even though Google is a highly successful global company, it doesn’t mean that you should simply try to emulate their processes. Tailoring your process to your business is an important step.
The importance of the human capital planning process is significant for businesses looking to have the staff and resources available to be successful. Having a strategic human resource planning process helps support your business goals at every level and is an investment worth making for your company.