The Human Resources (HR) function has played a pivotal role in shaping organizational success for decades. Today, however, its role is more important than it ever has been, as businesses worldwide are finding it more difficult than ever before to attract and retain talent. Even the very best and most effective HR teams are feeling the effects of the challenge, with 46% of HR leaders identifying recruiting as their top priority in 2023 in a report by Gartner.
If HR teams are to stay on top of their workloads and meet their recruitment goals in the face of what some have called “unprecedented challenges” and “record recruitment difficulties,” they need to work with leaders to devise and implement an effective HR planning strategy. By understanding human resources planning and its influence on organizational success, you can put together a plan that aligns with and helps achieve HR goals.
What is HR planning?
HR planning is the process of strategically identifying and aligning an organization’s current and future human resource needs with its overall business goals and objectives. It involves analyzing an organization’s current workforce, determining future workforce requirements, and developing strategies to meet those requirements.
The purpose of HR planning is to ensure that a business has the right talent spread throughout an organization so that critical roles remain sufficiently staffed. HR planning also seeks to help businesses determine what areas of their company are lacking in suitable staff, and what steps need to me taken to fill gaps that exist.
Why is HR planning important?
HR planning involves the systematic process of forecasting an organization’s future workforce needs and ensuring that it has the right people with the right skills in the right positions at the right time. Here are a few reasons why it’s important:
Helps acquire and retain talent: HR planning helps organizations identify the skills and talent they need to fill important roles and safeguard long-term growth, ensuring that they have the right number of employees with the necessary skills to meet current and future demands. In addition, it leads to better succession planning by creating a pipeline of talent for critical roles and minimizes disruption when people leave.
Promotes organizational growth: HR planning forces human resources professionals to think about how organizations will grow and change over time, and how this might impact their hiring needs in the long term. This enables them to plan and budget for future hiring needs, streamlining recruitment drives further down the line and allowing the organization to continue growing with a steady influx of new hires.
Increases employee engagement: When employees see that an organization is investing in their development and has a clear plan for their career growth, they are more likely to be engaged and motivated, which can reduce turnover and improve retention. HR planning also enables the identification of workforce risks related to talent shortages so that they can be proactively addressed.
5 Tips for Creating an Effective HR Planning Strategy
Creating an effective planning strategy is crucial for aligning an organization’s workforce with its business objectives. Here are five key tips for leaders who are looking to develop one
1. Assess Organizational Objectives and Workforce Needs
Start by comprehensively understanding your organization’s short-term and long-term goals. This involves consultations with senior management, department heads, and key stakeholders. At the same time, begin analyzing your current workforce. Ask questions like:
- What skills and talent are present within the organization, and what gaps exist?
- How do these gaps affect operations as they currently are?
- How could these gaps? lead to challenges in the future?
Understanding the alignment between business objectives and human resources forms the foundation for effective planning. You should also analyze your company’s current talent pool and what skills they offer. Consider factors like:
- Total number of employees company-wide.
- Total number of employees per department.
- Total number of employees per role.
- Ages of employees and how long until retirement.
- Skills, qualifications, and training levels for each employee.
2. Forecast Future Changes and Requirements
Utilize the insights gained in the initial assessment to predict the HR needs of your organization. Consider industry trends, technological advancements, market conditions, and regulatory changes that might impact your workforce.
This approach helps you anticipate potential challenges and opportunities and prepares you to address them proactively through supply and demand forecasting.
Supply forecasting: When HR teams evaluate current employees to determine whether they’re able to meet organizational goals and talent needs. This also accounts for projected retirements, promotions, layoffs, and resignations.
Demand forecasting: This is the opposite and is when HR teams focus on the type of talent and the number of employees that they expect that will need to be hired in order to meet projected future growth and business needs.
3. Develop Your HR/Talent Strategy
Only after you’ve identified talent gaps and future needs can you begin developing a detailed HR plan and talent strategy. This strategy should take the form of multiple steps that are completed in turn as part of a periodic employee acquisition and retention cycle. While strategies will differ between different organizations, it should ideally include or incorporate the following steps:
Recruitment: This is the initial phase of any HR or talent strategy whereby HR teams begin the search for applicants with skills that match those needed by the company by posting on job boards and searching social networks like LinkedIn for qualified potential employees.
Selection and hiring: This phase should come after the HR team has put together a pool of qualified applicants. It’s at this stage where interviews and skills evaluations take place to determine which applicants are a good fit for the roles on offer.
Training and development: Onboarding, training, and development all come once new employees have been hired. This phase is designed to introduce new hires to the company, get them up to speed with policies and procedures, and encourage them to continue developing their skills to fit the company’s requirements.
Pay and benefits: Competitive salaries and benefits packages help to keep new hires happy. Consider offering pay increases and enhanced benefits to employees who go above and beyond in their roles and make a significant contribution to the organization meeting its goals.
Performance management: Regular performance reviews are important for all employees. These help leaders to identify both successes and areas for improvement and encourage employees to stay in their roles and keep performing well with incentives for good work.
Employee retention: Competitive pay and benefits might help retention, but it is a strong organizational culture that’s truly integral in encouraging employees to stick around. There are many ways to encourage a good culture, from offering upskilling opportunities to taking employee health and mental well-being seriously.
4. Implement the Plan
Executing the plan is just as important as putting it together. It needs to be done with care and in a way that makes sense. To integrate your plan into your wider organizational strategy, start by communicating with organizational leadership to see if any training programs, approval, or additional budget allocation is needed first.
Once leadership is happy, the plan can be implemented simply by hiring, training, and developing employees according to it. This may involve creating job descriptions, launching recruitment campaigns, and designing employee development programs. Monitoring progress is essential to ensure that the strategy is on track, adjusting as necessary.
5. Evaluate and Adapt
Regularly assess the effectiveness of your HR planning strategy. This includes evaluating the performance of employees, the alignment with organizational goals, and the efficiency of HR processes.
Collect feedback from managers and employees and use this information to adapt your strategy as needed. A continuous improvement approach ensures that your HR strategy remains agile and responsive to evolving business needs.