Human resource planning is a key to running a successful business. Analyzing your current talent pool allows you to plan for future talent needs. Effective human resource planning optimizes your company’s talent. This produces the most effective working teams, efficient delivery of products and services, and accurate allocation of capacity. The benefits of human resource planning also lead to staff and customer satisfaction and your company’s longevity and sustainability. Let’s unwrap the secrets.
What is human resource planning?
Human resource planning is to make sure the right people are doing the right jobs now and to make sure you know which people the organization needs in the future.
Human resource planning is not stagnant and it’s a moving target. It means cyclically evaluating where the company’s talent pool is and where it needs to be as future projects, needs and deliverables must be met. You’ll also need to consider your project pipeline throughout the process.
What are human resources in this context? They aren’t just mean the number of employees, freelancers, or service providers you have. It also looks at their characteristics, including current skills and knowledge, the potential for improving their talent and motivation, and how their behavior aligns with your company’s values.
Benefits of human resource planning
The most obvious benefit of human resource planning is that it enables your company to maximize its staff’s contributions efficiently. Because it is forward-looking, another big-picture benefit is that it allows your organization to be flexible and adapt to changing business needs, climate, risks, and opportunities.
More precise benefits of human resource planning include these:
- Make sure the right people are doing the right work right now. This sounds obvious, but it can be overlooked resulting in inefficiency on current projects.
- Regularly analyzing and comparing current talent compared to known upcoming project needs. This allows you to foresee the need to hire or shift personnel at the right moment.
- Pushing your organization to study and predict industry trends.
- Driving your organization to ensure the most relevant learning and development interventions are in place.
- Building career pathways. This adds transparency for both the organization and the staff member and helps demonstrate motivations and future potential.
- Keeping up with and then implementing the most appropriate hiring techniques to secure the precise talent you need.
- Making accurate records to inform future decisions and ensure current decisions are documented and remembered.
- Pushing cross-departmental communication to facilitate the right discussions and decisions in the human resource planning process.
- Spreading positive word of mouth. The better your HR planning, the more satisfied your staff may be, and the more willingly they will promote your company to their talented contacts.
The human resource planning process: Step-by-step
These are the typical steps in HR planning.
1. Evaluating the organization’s plans
The point of managing and planning human resources is to achieve the company’s short, mid, and long-term objectives. You have to start with the plan – what is the company determined and committed to achieving, and how does it want to achieve those goals? This means consultation with various departments and/or project managers. Depending on the size of the company, different areas may have different HR needs. Growth? Downsizing? Short-term freelancers to finish a project? Just to name a few.
2. Evaluating current workforce vs. company’s future needs
The main issue here is talent and skills. If your company is going to take on four new projects over the next year, do you currently have a workforce with the skills to deliver those outcomes? Do those who have the skills have the capacity? Have current staff done an up-to-date skills inventory? How does prior performance influence your decisions? Does it mean re-skilling and internal development? What is your company’s retention rate or turnover rate? Are you constrained by strict organizational charts?
3. Predicting the organization’s future context
You may know some specific upcoming projects or types of work that will be needed. But, you should also forecast the broader situation of the company and how it could change. What are the industry trends? What is the company’s financial situation and how is it changing? How are new technologies and innovations (e.g. automation, digitization) affecting your workforce or the ways the company expects people to work?
Predictions about these types of questions lead you to make SWOT analyses and/or develop different scenarios for different future paths. You can also develop gap analyses for the scenarios (i.e. skills that will be needed vs. skills the human resources have). The point is to be ready – planning for various contingencies helps you stay ready for whatever may happen.
4. Make your action plan; implement your plan
Your plan should set out the goals of the human resource planning process. It should then identify the actions needed with clear explanations, costs, timelines, and who is responsible. How exactly this is done needs to fit your company’s culture – or, is it a culture that needs to change and this is one way to do it? Be ready for Negative Nancies – not everybody will think the process or the planning is wonderful!
5. Evaluate the process
The process is cyclical. For it to work, you need to evaluate the steps and the effectiveness of the decisions. Additionally, how have the company’s goals and context changed since you started the process? Don’t get stuck on an idea from earlier planning stages if your monitoring and reviewing show things have changed.
Tips to improve the human resource planning process (H2)
Unfortunately, there isn’t one perfect way to carry out a human resource planning process. It can be messy and challenging. What works in one company may not work in another business. There will be some trial and error, but we can share a few tips to help you out.
1. Have the right HR team
The right HR team is the starting point – you won’t get the right people in the right roles if you have the wrong HR people. They will make decisions or provide guidance that will have real consequences on your company’s success.
2. Investigate
Investigate the company, departments, projects, and staff. Use surveys, focus groups, 1-2-1 chats, prior records (e.g. performance records), project plans, etc. Some things you may want to survey include perceptions of skills, preferences for types of projects/work, what makes employees feel valued, what keeps employees engaged, and what sort of training could be useful.
3. Use a human resource planning tool
Nowadays, there are numerous online cloud-based HR tools that will make your life much more efficient. Weekwise, by Blocshop, delivers a sleek and easy-to-use planning tool. Weekwise believes the people doing the work are the real resources that make a business successful. So, it provides this and much more:
- reviewing current projects
- planning future projects
- work staff skills inventory
- overview and specifics of team capacity
- clear in-time knowledge of who is working on what (and even integrated timesheets!)
- an eagle-eye view of the budget and cash flow with the invoicing feature
- team status views
- cross-project and project pipeline views.
4. Automate
Where possible, automate. Saving the HR department’s time on repetitive tasks allows them to focus on more meaningful measurements and thoughtful planning.
5. Onboarding and performance review systems
Robust onboarding and useful performance review systems help the company plan how to best use the resources over time. One trap with performance reviews is to spend too much time and get very little out of them – this comes from often rigid time-based approaches where employees and managers see it as a chore. Instead, find an efficient system to grow engagement, share knowledge, and drive the company forward.
It’s complex and challenging to plan the future course of an organization. Human resource planning is time-consuming and multi-faceted, but it can deliver strong results that greatly benefit the organization when done well. The key is to continually reevaluate ensuring the gap between current and future needs is always being filled as efficiently as possible. Why not try out Weekwise to see how a cloud-based planning tool can help?
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