What is a human resources plan?
A systematic HR plan makes sure that a company hires enough staff to help meet important business goals around profitability, productivity, and growth.
Any company with more than a few employees needs to draft an effective human resources plan. Without making an HR plan, your business risks running into issues around understaffing, skills shortages, not hiring the right employees, and wasting money on training people who don’t plan on working with you long term.
Benefits of creating an effective human resources plan
HR planning involves a lot of work, including analyzing, brainstorming, forecasting, and making tough decisions. However, the benefits of an effective HR plan make it a worthwhile effort for your business. Here are some of the benefits of creating an effective human resources plan:
Talent retention
Hiring talented employees is important, but retaining your best performers is a challenge that warrants serious planning. Talented staff make invaluable contributions towards company goals, and a low retention rate signifies something wrong with the HR department’s approach. Without good talent retention strategies in your HR plan, you run the risk of your employees leaving your company, potentially taking their skills to your competitors.
An effective HR plan helps identify particular factors that keep employees engaged and committed to the company culture. Providing competitive levels of compensation is the most obvious place to start. Other things that an effective HR plan can identify to engage employees include providing opportunities to diversify the type of work they do or helping them upskill on the job.
Meeting staffing needs
A lot of thought and effort goes into recruiting and screening new employees. From creating good job descriptions to interviewing candidates and making a job offer, there are many steps along the way. An effective HR plan ensures companies meet staffing needs by preparing ahead of time for situations when employees leave the company. The labour demand forecasts that form a big part of an HR plan help companies identify projects and time periods for which there may arise an urgent need to hire more skilled employees.
Hiring the right employees
A critical part of effective HR planning is determining the skills employees need for specific roles and ensuring any interviewing process thoroughly vets for those skills. The benefit that results from this aspect of HR planning is that companies only hire the most qualified individuals for varying roles.
Ensuring proper onboarding and training for new recruits
Even with the right employees hired, most companies need an onboarding process and some degree of training for new recruits. Onboarding and training are used to educate new employees about the company policies, culture, specific software used, information security best practices, and other relevant topics. An effective HR plan involves creating training modules and onboarding guides that make the settling-in process for new recruits as smooth as possible.
Facilitating growth
Most companies have a growth mindset; they continually look for ways to innovate and expand. If your business wants to grow, it’s essential to bear in mind that any growth comes with an increased demand for new employees. Effective HR planning helps to facilitate growth by ensuring that a growing business is not left unprepared to deal with its expansion projects with not enough skilled labour to fill the higher workloads.
Minimizing costs
The costs of attracting and retaining the right employees are high, but they can be minimized with proper HR planning. Thorough planning reduces inefficiencies around screening prospective employees and decreases staff turnover which, in turn, reduces your costs.
Keeping updated on regulatory issues
Regulations can change quickly and new regulations regularly come into force in many industries. An effective HR plan makes sure your company stays on top of any potential regulatory issues around employee welfare, health, and data protection. There are few situations that are more difficult to contend with as a company than being unprepared for an important regulatory change.
What are the features of effective human resources planning?
Drafting an effective HR plan might differ in certain ways between businesses and across industries. There are some general guidelines, however, that lead to an effective plan. Here are some features of effective human resources planning:
Setting clear objectives
Creating any type of effective plan begins with setting clear objectives. When thinking about goals for human resources, it’s important to think of the wider company context. Since employees are the most valuable company asset, the objectives to start with are your company’s objectives. You need to consider the business goals and the type of workforce that can help achieve those goals. Setting out clear objectives for your workforce allows you to make actionable human resources plans such as, “we need to hire two information security specialists by the end of the first quarter”.
Assessing the current workforce
An effective HR plan doesn’t just attempt to match wider business objectives with new recruits. An important feature of a good plan is that you assess your current workforce’s skills and abilities to clarify what they’re capable of and whether you really need external recruitment to help achieve your company’s goals.
Many of your current employees may have untapped potential or skills you weren’t aware of, and an HR plan can help you to identify these critical details. The easiest way to assess your current workforce is to simply ask them questions about their strengths and weaknesses, and keep a record of their answers.
Having a succession plan
A succession plan is a critical feature of prudent human resources planning that prepares for the unexpected by taking proactive steps. People leave their positions at unexpected times, and the more important the position, the bigger impact of not having a backup plan to replace that person. Furthermore, more rapid adoption than expected of new technologies and software by competitors can create new positions to fill. By considering the unexpected and having a succession plan, your HR plan becomes much more well-rounded.
Establishing recruitment and selection guidelines
Another key feature of effective human resources planning is establishing and refining recruitment and selection guidelines for new employees. Your workforce might need to change and there may be new positions to fill. It’s unwise to be haphazard when recruiting and selecting people because disorganization increases the time spent on recruiting and decreases the likelihood of selecting the right candidate for the roles you want to fill.
Brainstorming retention incentives
An effective human resources plan needs to prioritize strategies for retaining your best employees. People like to work at companies where they feel challenged, they feel engaged with their work, they feel integrated with an identifiable company culture, and they feel their employers offer fair compensation for the work they do. Brainstorming retention incentives provides a platform with which to get employees on board with wider company goals.
How do you write a human resources plan?
Writing a human resource plan involves the following important steps:
- Analyzing the current workforce
- Forecasting the future demand for various roles within your company and in the wider industry in which your business operates
- Attempting to identify gaps and ensure no future surpluses or shortages of employees
- Integrate the plan
1. Analyzing the current workforce
Writing a human resources plan begins with examining your current workforce. You want to get a clear picture of your employees’ strengths, weaknesses, skills, qualifications, experience levels, titles, performance reviews, responsibilities, and compensation. With this analysis conducted, the HR department can determine the current staffing needs of the business and how well they are met. A useful part of this analysis is creating an employee database with all the relevant information organized for easy retrieval.
2. Forecasting future needs
Forecasting future human resources needs means looking at several factors, including promotions, upcoming retirements, market trends, and new technologies that might automate certain roles. The idea is to be in a place to accurately gauge future requirements around whether to hire more employees or improve the skill levels of current staff with training programs.
The company’s main strategic goals play an important role in forecasting future labour needs, so it’s important for HR managers to have insight into the boardroom-level plans of the company. Forecasting future needs is a complex task involving many dynamics, and it usually calls for special data analysis techniques to get more accurate projections.
3. Identifying gaps
An important next step in writing an HR plan is to identify and clarify any gaps that the company needs to address in its workforce. This gap analysis combines the picture of the current workforce with future projections to help judge where those gaps exist and how best to address them.
A gap analysis can inform you of whether it’s best to upskill existing employees or hire people with proven skills in certain areas, especially around emerging technologies. The gap analysis also shows you how well your company uses its existing human resources. For example, perhaps some employees have skills that they could put to better use in a different role at the company.
4. Integrating the plan
With HR gaps identified, the final step of writing the plan is determining how to integrate it with the wider organizational strategy. Integrating the plan means establishing requirements around the budget needed for recruitment drives, training programs, and potential redundancies.
Not only do you need to specify a budget, but you also need to get executive-level buy-in for the HR plan and budget. Cooperation and obtaining the necessary finances from the boardroom are critical parts of integrating an HR plan. Due to the level of complexity involved in all steps of writing the plan, this is where analytics dashboards, organizational charts, and employee databases really help convey a clear picture of the HR strategy and how it benefits the company going forward.
