Human Resource Planning is essential for the success of any organization since it helps optimize the human capital in an organization. By implementing an effective human resource planning process, you can stay ahead of your competition since it helps you plan for the most valuable resources in your organization – your employees.
Hence, we are sharing the goals of human resource planning, its importance for organizations, the factors that influence it, as well as the 5-step human resource planning process in this article.
What is Human Resource Planning Process?
Human Resource Planning (HRP) Process is an activity which identifies the current and future requirements of an organization related to its human resources, which will help in achieving its goals and targets. It is usually an ongoing process and hence, it comes with its set of data-driven and time-bound goals.
The HRP process provides HR with a robust idea of how well the jobs within the organization are aligned with the employee skills, enabling them to understand whether they need to make any changes to their workforce. Similarly, it also helps in planning for future hiring, helping the organization stay competitive.
5-Step Human Resource Planning Process
Since we have understood the various aspects of human resource planning, let us move on to the most important part of HRP: the actual process of planning. While there is no fixed consensus on the number of steps required to undertake the process, it is usually accomplished using a 5-step process.
The 5 steps in the human resource planning process are:
1. Analyse Organizational Objectives
The most important and the first step in HRP is to analyze the organizational objectives. By scrutinizing these goals, HR will be able to create the right plans, which will help in accomplishing them within the required timeframe.
Since the HR team works with the management to ensure the success of the organization, they have a clear idea of the organizational-level objectives. They can use this information to align these objectives with their employees’ personal agenda, resulting in a more productive workforce. By analyzing the organizational objectives, the HR team can also understand which goal to tackle first and how to go about it.
2. Evaluate Current Scenario & Uncover Gaps
Once the organizational goals for HRP are identified and documented, the next step is to evaluate the current workforce. The HR team should document the current company strength, skills and experience, and understand how they can align the organizational goals with these attributes.
While analyzing the workforce, they should also focus on the total number of employees, their designations, their performance details, as well as their skills to gather in-depth insights into the organizational workforce.
Additionally, one should also identify gaps between the skills required for a job and the skillset possessed by the employee undertaking the job. Understanding this difference will help in either upskilling the employee or replacing them with someone with a better skillset.
3. Predict Future HR Requirements
Once the HR has all the information about their existing workforce as well as identified the skills gap within the organization, they can move on to forecasting the future requirements of the company. Since HR has a robust idea of the workforce and their skillsets, along with the organizational goals of the organization, they can develop strategies to ensure their fulfilment through HRP.
Additionally, since the HR would also possess knowledge of the industry trends, they can make changes to the plan to ensure that the conditions remain suitable for organizational growth. Hence, the human resource plans can be tweaked accordingly to stay relevant to future HR requirements.
4. Develop & Implement Action Plans
Once the objectives are set and the current and future workforce scenarios are defined, the HR team can move on to developing robust strategies to ensure organizational success. Through HRP, they can develop and implement action plans which would enable the organization to thrive in any industry conditions.
The HR team can provide the goals along with the timeframe, the action steps required to achieve the goal and the personnel responsible for achieving the goals as a template to ensure that the action plans are accomplished within the given timeframe. Once the plans are developed, regular follow-ups will also be required to ensure its completion.
5. Monitor & Implement Changes
Once the action plans are put into motion, the HR team should also check on it regularly to understand whether it is on track. They should also review the strategies regularly and ensure that it is aligned with the industry changes. Similarly, they should also monitor these plans for any optimizations, and make changes whenever required.
Similarly, it is essential to understand the effect of the changes undertaken with the help of HRP. To accomplish this goal, the HR can ask the managers and supervisors to take feedback from their staff to understand the impact of their plans.
Importance of Human Resource Planning
The relevance of human resource planning arises from the fact that it is required to plan for managing the most important resource within any organization – its employees. It enables the organizations to plan for any future requirements as well as fulfil current vacancies with ease.
Some major factors which make the HRP process extremely essential for an organization are:
➔ Standardized Approach
With HRP, you can develop a standardized approach towards managing your employees effectively. Once you develop a standardized process, you can repeat it as many times as needed, providing you with a template, which you can tweak later based on industry changes. With the help of a standardized approach, you will also be able to continuously optimize it to ensure complete efficiency.
➔ Enhanced Employee Value
The HRP process also helps in enhancing employee value since their performance is evaluated using dedicated performance management system, during the human resource planning process. Their performance is then benchmarked against the required performance for their designation and training is provided if it is found to be inadequate. Hence, HRP enhances employee value by effectively upskilling them, resulting in increased trust and loyalty.
➔ Adaptability to Industry Changes
Through HRP, companies can stay prepared for any changes in the industry, which helps them dynamically change business strategies whenever required. With the help of HRP, HR teams can also train their staff with succession planning initiatives, ensuring that the leadership remains agile and ready for any changes.
➔ Increased Employee Engagement
HRP also enables the HR teams to understand the staff requirements for every department within the organization. Hence, they can allocate KRAs and KPIs effectively, ensuring that their staff does not suffer from burnout. Similarly, it also enables them to upskill the employees ensuring increased levels of engagement since they realize that their organization values them.
➔ Competitive Business
Human resource planning also provides the organization with robust plans for business development and human resource management, ensuring long-term success. It also provides a competitive edge for the company as they stay ready for any industry-wide changes. It also enables the HR teams to empower their staff to adapt to any technological changes.
➔ Improved Long-term Growth
By implementing plans developed through HRP, companies can ensure their long-term growth since it makes them ready for any changes, both externally and internally. Similarly, it also allows them to allocate budgets judiciously, resulting in increased cost savings, which can be utilized in other initiatives.
Goals of Human Resource Planning
The main goal of human resource planning is to ensure that the company has enough employees to undertake its tasks efficiently as well as achieve its long-term and short-term organizational goals. To ensure that these goals are met, human resource planning should be undertaken considering certain factors.
Hence, we are sharing the goals of human resource planning:
1. Utilizing HR Effectively
Through human resource planning, the HR department can utilize their employees effectively as it helps them understand the skills, experience, and requirements of every job role in the organization. By utilizing the resources efficiently, organizations can maximize their productivity, while keeping their staff engaged and satisfied with the company.
2. Alignment with Organizational Goals
Another major goal of HRP is to align the organizational goals with those of the employees. It helps the HRs understand the individual professional aspirations of their staff members and help them achieve them. With this process, they will be motivated to undertake their duties to the best of their abilities, resulting in enhanced company growth and overall success.
3. Providing Flexibility to the Organization
With the help of robust planning and implementation of the right strategies, HRP enables organizations to become more flexible. It enables the company to change according to the changing business environment, helping it thrive even in the face of industry-wide calamities. Through HRP, organizations can have contingencies in place for any scenario, making it essential for all companies.
4. Hiring and Training Talent
Through the process of HRP, you can also remain ready for the changing dynamics of the job market, resulting in an enhanced recruitment management system. Hence, recruitment and retention are vital goals of the human resource planning processes. As a result, HRs can deploy successful hiring and employee retention strategies through effective planning undertaken through HRP.
5. Predicting Company’s Future Requirements
The HRP process also helps in planning the company’s future by helping the HR teams identify future job requirements. Using HRP, the HR department can avoid talent gaps as well as vacant positions by strategizing succession planning operations. Hence, predicting the company’s future requirements is one of the most important goals of human resource planning.
Factors Influencing the Human Resource Planning Process
Various factors influence human resource planning and the HR teams are required to take them into account while developing these plans. While some of these factors are external to the organization, most of them stem from the organization and its structure.
Hence, let us check out these factors that affect HRP:
➔ The Planning Approach
Depending on the organization, its industry, and how it approaches planning, HRP can be undertaken in different ways. Similarly, the organizational approach to planning will also affect the HRP in general. For example, while some companies may try to hire more employees to accomplish organizational goals, others will try to optimize their workforce through upskilling and defining KRAs to maximize efficiency for attaining the same goals.
➔ Type of Organization
Similarly, the organizational type also impacts HRP since the successful implementation of the plans laid out by HRP is the responsibility of the management. The company structure, the management, and their decisions, also play a vital role in ensuring the success of HRP. Hence, the organizational type plays a major role in ensuring the success of HRP.
➔ Data Collection Mechanism
Since HRP requires the collation of data, how this information is collected and processed is also an essential factor in successfully implementing HRP. Similarly, the accuracy of this data also plays a major role in assuring the effectiveness of HRP. Hence, it is essential to collate the data using tried and tested methods as well as utilize modern technologies to maintain data security and integrity.
➔ Development Cycle
Companies generally go through different development cycles during their lifetime. Along with the different cycles, the HR team, along with the management, develops different organizational goals and strategies to ensure the maximum benefit during the cycle. These goals are also applicable to HRP, and hence, organizational development cycles are an essential factor for crafting and implementing human resource planning.
Conclusion
The human resource planning process provides organizations with robust strategies to ensure organizational success. Hence, we have shared what it is, what its goals and relevance are for businesses, as well as understand the factors that influence HRP. We have also shared the 5-step process required for effective human resource planning to help you get started. If you are planning on developing and implementing an HRP in your organization, feel free to use these tips, as they would help you understand the concept of HRP along with the various factors influencing it.
