How Is Human Resource Planning Integrated With Strategic Planning?
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Alignment of Strategies
Transformational strategy, operational strategy problems.
- About Strategic HR: Theory & Principles
- List of HRM Competencies
All businesses, no matter how small, have three categories of resources available to them: the technology they use to create a product or service; the finance they use to operate and grow the business, and the people whose talents they use to accomplish the company's goals.
Strategic planning is the process of figuring out why the organization is in business and what long-term goals it wants to achieve with its available resources. Human talent is one of those resources, so there's a direct link between strategic and human resources planning – neither one can exist without the other.
What Is Strategic Planning?
The purpose of strategic planning is out figure out what a company wants to do and why it is in business. For example, an organization might decide that it wants to diversify into new markets because it has gone as far as it can go in its current markets. The strategic options here include:
- Developing new products to sell to its existing customers.
- Selling the same products to a completely new group of customers, such as people in a different country.
- Buying a company that operates a different business model that may or may not complement the company's business model.
The process of strategic planning would involve investigating all of these options and deciding which one represents the company's vision of the future. From there, the company's leadership team would start drilling down into the specific strategies that can enable the company to meet its big-picture goals.
What Is the Strategic Planning Process?
Businesses typically look three to five years ahead when formulating a strategic plan, and the process results in a document that articulates the company's vision, mission, big-picture goals and the broad strategies it will use to reach those goals. This planning document is intended to guide leadership in its decision-making.
A key part of strategic planning is assessing the company's resources. It's easy for any company to dream big and have stratospheric ambitions, but what the company can realistically achieve is limited by the number and type of resources it has at its disposal. For most businesses, those resources fall into three main categories:
Technology resources : This includes all the equipment, processes and infrastructure the business uses to create the products and services that it brings to market.
Financial resources : Finance comprises all the liquid resources the company can use to carry out its business operations – namely cash in hand, short-term and long-term bank deposits, liquid financial investments like stocks and bonds, and approved bank loans.
Human resources : This resource comprises the people whose talents, skills and personal characteristics the business can use to accomplish its strategic goals. While technology and money are important assets, human resources are the most important, because technology and money need people to manage them.
As you can see, human resources are an integral part of any strategic plan. If the business does not have the right skills and talent in place to achieve its goals, then the strategic plan will fail due to a lack of knowledge and manpower. Similarly, if talent is acquired and deployed without reference to the company's strategic goals, then you're going to end up with a lot of people doing jobs that don't add value to the business, and which don't move the company closer to where it wants to be.
What Is Human Resource Strategic Planning?
The purpose of human resource planning is look into the future and decide what skills, knowledge and competencies the business is going to need in one, three or five years' time to meet its strategic goals. For example, if the company is currently outsourcing its marketing function but intends to bring this function in-house, then an obvious early strategy is to recruit a full marketing team, from a senior manager all the way down to a junior marketing associate or intern.
Whatever the mission of the business, one of the major objectives of human resource planning is to dig into the talent pipeline and answer the following questions:
- How can the business attract the right type of people in the right numbers?
- What kind of training and development can it offer to its current employees, to close any knowledge gaps?
- How can it balance projected labor demand with supply so there is no labor surplus or understaffing?
- Who are its key people, and how can it incentivize them to stay?
Answering these questions ensures the business has the right people in the right numbers in the right job roles to ensure the company's profitability.
What Is the Relationship Between Human Resource Planning and Business Strategy?
Strategic planning and human resources planning basically have a symbiotic relationship, in that each function is dependent on the other. Here are some examples of how the relationship works in practice:
Impact assessments
When leaders start developing a strategic plan, they will liaise with different department heads to see how the proposed business strategies might affect them. The human resources planning team will figure out the financial impact of the initiative based on the recruiting, training and retention strategies that may be necessary to support the plan. If the initiative involves downsizing, for example, then human resources managers must look at the various options for decreasing the labor supply through dismissals, retirements, transfers out of the department, sabbaticals and voluntary quitting.
Invariably, there will be a time cost associated with a new initiative. It's up to HR to feedback how long it will take to hire or upskill permanent staff members and whether the company can work with contractors in the interim. This helps senior leaders develop a timescale for the new initiative.
Executing the plan
As soon as a strategic initiative receives the green light, the human resources team must ready the company's employees for the changes that are about to ensue. This might include changing people's job descriptions, moving people between job units, policy making, motivation strategies, developing training programs, and pinpointing and eliminating labor shortages through recruitment and outsourcing.
Feedback and monitoring
Once the strategic initiative is implemented, HR will monitor the changes that are being made to the workforce to establish whether the policies are sufficient , affordable and sustainable . Because the strategic plan is a long-term plan, it is crucial for the business to keep monitoring its talent pipeline, and keep updating its demand forecast, to ensure that the business always has the right people in place to meet its objectives.
Which Comes First, the Chicken or the Egg?
Because strategic planning and HR planning are interdependent, it really doesn't matter which plan the leadership team begins to develop first. In fact, they probably should be developed in conjunction with each other. That's because the strategic plan cannot be finalized until there are supporting talent strategies in place from human resources, and the human resources plan cannot be finalized until the long-term goals of the company are clear.
The most effective organizations are those that achieve alignment between the technology, finance and human resources of the business and the formulation and implementation stages of the strategic plan. It should be an integrative activity, rather than a leader-follower process.
- Investopedia: Human Resources Planning
- Clearpoint Strategy: Strategic Planning
- HRM Practice: Linking Organizational Strategy to Human Resource Planning
- Fast Company: Four Reasons To Invite HR To Your Strategic Planning Meetings
Jayne Thompson earned an LLB in Law and Business Administration from the University of Birmingham and an LLM in International Law from the University of East London. She practiced in various “big law” firms before launching a career as a business writer. Her articles have appeared on numerous business sites including Typefinder, Women in Business, Startwire and Indeed.com. Find her at www.whiterosecopywriting.com.
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2.1 Strategic Planning
Learning objectives.
- Explain the differences been HRM and personnel management.
- Be able to define the steps in HRM strategic planning.
In the past, human resource management (HRM) was called the personnel department. In the past, the personnel department hired people and dealt with the hiring paperwork and processes. It is believed the first human resource department was created in 1901 by the National Cash Register Company (NCR). The company faced a major strike but eventually defeated the union after a lockout. (We address unions in Chapter 12 “Working with Labor Unions” .) After this difficult battle, the company president decided to improve worker relations by organizing a personnel department to handle grievances, discharges, safety concerns, and other employee issues. The department also kept track of new legislation surrounding laws impacting the organization. Many other companies were coming to the same realization that a department was necessary to create employee satisfaction, which resulted in more productivity. In 1913, Henry Ford saw employee turnover at 380 percent and tried to ease the turnover by increasing wages from $2.50 to $5.00, even though $2.50 was fair during this time period (Losey, 2011). Of course, this approach didn’t work for long, and these large companies began to understand they had to do more than hire and fire if they were going to meet customer demand.
More recently, however, the personnel department has divided into human resource management and human resource development, as these functions have evolved over the century. HRM is not only crucial to an organization’s success, but it should be part of the overall company’s strategic plan, because so many businesses today depend on people to earn profits. Strategic planning plays an important role in how productive the organization is.
Table 2.1 Examples of Differences between Personnel Management and HRM
Most people agree that the following duties normally fall under HRM. Each of these aspects has its own part within the overall strategic plan of the organization:
- Staffing. Staffing includes the development of a strategic plan to determine how many people you might need to hire. Based on the strategic plan, HRM then performs the hiring process to recruit and select the right people for the right jobs. We discuss staffing in greater detail in Chapter 4 “Recruitment” , Chapter 5 “Selection” , and Chapter 6 “Compensation and Benefits” .
- Basic workplace policies. Development of policies to help reach the strategic plan’s goals is the job of HRM. After the policies have been developed, communication of these policies on safety, security, scheduling, vacation times, and flextime schedules should be developed by the HR department. Of course, the HR managers work closely with supervisors in organizations to develop these policies. Workplace policies will be addressed throughout the book.
- Compensation and benefits. In addition to paychecks, 401(k) plans, health benefits, and other perks are usually the responsibility of an HR manager. Compensation and benefits are discussed in Chapter 6 “Compensation and Benefits” and Chapter 7 “Retention and Motivation” .
- Retention. Assessment of employees and strategizing on how to retain the best employees is a task that HR managers oversee, but other managers in the organization will also provide input. Chapter 9 “Successful Employee Communication” , Chapter 10 “Managing Employee Performance” , and Chapter 11 “Employee Assessment” cover different types of retention strategies, from training to assessment.
- Training and development. Helping new employees develop skills needed for their jobs and helping current employees grow their skills are also tasks for which the HRM department is responsible. Determination of training needs and development and implementation of training programs are important tasks in any organization. Training is discussed in great detail in Chapter 9 “Successful Employee Communication” , including succession planning. Succession planning includes handling the departure of managers and making current employees ready to take on managerial roles when a manager does leave.
- Regulatory issues and worker safety. Keeping up to date on new regulations relating to employment, health care, and other issues is generally a responsibility that falls on the HRM department. While various laws are discussed throughout the book, unions and safety and health laws in the workplace are covered in Chapter 12 “Working with Labor Unions” and Chapter 13 “Safety and Health at Work” .
In smaller organizations, the manager or owner is likely performing the HRM functions (de Kok & Uhlaner, 2001). They hire people, train them, and determine how much they should be paid. Larger companies ultimately perform the same tasks, but because they have more employees, they can afford to employ specialists, or human resource managers, to handle these areas of the business. As a result, it is highly likely that you, as a manager or entrepreneur, will be performing HRM tasks, hence the value in understanding the strategic components of HRM.
HRM vs. Personnel Management
Human resource strategy is an elaborate and systematic plan of action developed by a human resource department. This definition tells us that an HR strategy includes detailed pathways to implement HRM strategic plans and HR plans. Think of the HRM strategic plan as the major objectives the organization wants to achieve, and the HR plan as the specific activities carried out to achieve the strategic plan. In other words, the strategic plan may include long-term goals, while the HR plan may include short-term objectives that are tied to the overall strategic plan. As mentioned at the beginning of this chapter, human resource departments in the past were called personnel departments. This term implies that the department provided “support” for the rest of the organization. Companies now understand that the human side of the business is the most important asset in any business (especially in this global economy), and therefore HR has much more importance than it did twenty years ago. While personnel management mostly involved activities surrounding the hiring process and legal compliance, human resources involves much more, including strategic planning, which is the focus of this chapter. The Ulrich HR model, a common way to look at HRM strategic planning, provides an overall view of the role of HRM in the organization. His model is said to have started the movement that changed the view of HR; no longer merely a functional area, HR became more of a partnership within the organization. While his model has changed over the years, the current model looks at alignment of HR activities with the overall global business strategy to form a strategic partnership (Ulrich & Brockbank, 2005). His newly revised model looks at five main areas of HR:
- Strategic partner. Partnership with the entire organization to ensure alignment of the HR function with the needs of the organization.
- Change agent. The skill to anticipate and respond to change within the HR function, but as a company as a whole.
- Administrative expert and functional expert. The ability to understand and implement policies, procedures, and processes that relate to the HR strategic plan.
- Human capital developer. Means to develop talent that is projected to be needed in the future.
- Employee advocate . Works for employees currently within the organization.
According to Ulrich (Ulrich, 2011), implementation of this model must happen with an understanding of the overall company objectives, problems, challenges, and opportunities. For example, the HR professional must understand the dynamic nature of the HRM environment, such as changes in labor markets, company culture and values, customers, shareholders, and the economy. Once this occurs, HR can determine how best to meet the needs of the organization within these five main areas.
To be successful in writing an HRM strategic plan, one must understand the dynamic external environment.
HRM as a Strategic Component of the Business
(click to see video)
David Ulrich discusses the importance of bringing HR to the table in strategic planning.
Keeping the Ulrich model in mind, consider these four aspects when creating a good HRM strategic plan:
- Make it applicable. Often people spend an inordinate amount of time developing plans, but the plans sit in a file somewhere and are never actually used. A good strategic plan should be the guiding principles for the HRM function. It should be reviewed and changed as aspects of the business change. Involvement of all members in the HR department (if it’s a larger department) and communication among everyone within the department will make the plan better.
- Be a strategic partner. Alignment of corporate values in the HRM strategic plan should be a major objective of the plan. In addition, the HRM strategic plan should be aligned with the mission and objectives of the organization as a whole. For example, if the mission of the organization is to promote social responsibility, then the HRM strategic plan should address this in the hiring criteria.
- Involve people. An HRM strategic plan cannot be written alone. The plan should involve everyone in the organization. For example, as the plan develops, the HR manager should meet with various people in departments and find out what skills the best employees have. Then the HR manager can make sure the people recruited and interviewed have similar qualities as the best people already doing the job. In addition, the HR manager will likely want to meet with the financial department and executives who do the budgeting, so they can determine human resource needs and recruit the right number of people at the right times. In addition, once the HR department determines what is needed, communicating a plan can gain positive feedback that ensures the plan is aligned with the business objectives.
- Understand how technology can be used. Organizations oftentimes do not have the money or the inclination to research software and find budget-friendly options for implementation. People are sometimes nervous about new technology. However, the best organizations are those that embrace technology and find the right technology uses for their businesses. There are thousands of HRM software options that can make the HRM processes faster, easier, and more effective. Good strategic plans address this aspect.
HR managers know the business and therefore know the needs of the business and can develop a plan to meet those needs. They also stay on top of current events, so they know what is happening globally that could affect their strategic plan. If they find out, for example, that an economic downturn is looming, they will adjust their strategic plan. In other words, the strategic plan needs to be a living document, one that changes as the business and the world changes.
A good HRM strategic plan acknowledges and addresses the use of software in HRM operations.
Howard Russell – Lefroy House – CC BY-NC-ND 2.0.
Human Resource Recall
Have you ever looked at your organization’s strategic plan? What areas does the plan address?
The Steps to Strategic Plan Creation
As we addressed in Section 2.1.2 “The Steps to Strategic Plan Creation” , HRM strategic plans must have several elements to be successful. There should be a distinction made here: the HRM strategic plan is different from the HR plan. Think of the HRM strategic plan as the major objectives the organization wants to achieve, while the HR plan consists of the detailed plans to ensure the strategic plan is achieved. Oftentimes the strategic plan is viewed as just another report that must be written. Rather than jumping in and writing it without much thought, it is best to give the plan careful consideration.
The goal of Section 2 “Conduct a Strategic Analysis” is to provide you with some basic elements to consider and research before writing any HRM plans.
Conduct a Strategic Analysis
A strategic analysis looks at three aspects of the individual HRM department:
Understanding of the company mission and values. It is impossible to plan for HRM if one does not know the values and missions of the organization. As we have already addressed in this chapter, it is imperative for the HR manager to align department objectives with organizational objectives. It is worthwhile to sit down with company executives, management, and supervisors to make sure you have a good understanding of the company mission and values.
Another important aspect is the understanding of the organizational life cycle. You may have learned about the life cycle in marketing or other business classes, and this applies to HRM, too. An organizational life cycle refers to the introduction, growth, maturity, and decline of the organization, which can vary over time. For example, when the organization first begins, it is in the introduction phase, and a different staffing, compensation, training, and labor/employee relations strategy may be necessary to align HRM with the organization’s goals. This might be opposed to an organization that is struggling to stay in business and is in the decline phase. That same organization, however, can create a new product, for example, which might again put the organization in the growth phase. Table 2.2 “Lifecycle Stages and HRM Strategy” explains some of the strategies that may be different depending on the organizational life cycle.
Understanding of the HRM department mission and values. HRM departments must develop their own departmental mission and values. These guiding principles for the department will change as the company’s overall mission and values change. Often the mission statement is a list of what the department does, which is less of a strategic approach. Brainstorming about HR goals, values, and priorities is a good way to start. The mission statement should express how an organization’s human resources help that organization meet the business goals. A poor mission statement might read as follows: “The human resource department at Techno, Inc. provides resources to hiring managers and develops compensation plans and other services to assist the employees of our company.”
A strategic statement that expresses how human resources help the organization might read as follows: “HR’s responsibility is to ensure that our human resources are more talented and motivated than our competitors’, giving us a competitive advantage. This will be achieved by monitoring our turnover rates, compensation, and company sales data and comparing that data to our competitors” (Kaufman, 2011). When the mission statement is written in this way, it is easier to take a strategic approach with the HR planning process.
- Understanding of the challenges facing the department. HRM managers cannot deal with change quickly if they are not able to predict changes. As a result, the HRM manager should know what upcoming challenges may be faced to make plans to deal with those challenges better when they come along. This makes the strategic plan and HRM plan much more usable.
Table 2.2 Lifecycle Stages and HRM Strategy
Source: Seattle University Presentation , accessed July 11, 2011, http://fac-staff.seattleu.edu/gprussia/web/mgt383/HR%20Planning1.ppt .
Identify Strategic HR Issues
In this step, the HRM professionals will analyze the challenges addressed in the first step. For example, the department may see that it is not strategically aligned with the company’s mission and values and opt to make changes to its departmental mission and values as a result of this information.
Many organizations and departments will use a strategic planning tool that identifies strengths, weaknesses, opportunities, and threats (SWOT analysis) to determine some of the issues they are facing. Once this analysis is performed for the business, HR can align itself with the needs of the business by understanding the business strategy. See Table 2.3 “Sample HR Department SWOT Analysis for Techno, Inc.” for an example of how a company’s SWOT analysis can be used to develop a SWOT analysis for the HR department.
Once the alignment of the company SWOT is completed, HR can develop its own SWOT analysis to determine the gaps between HR’s strategic plan and the company’s strategic plan. For example, if the HR manager finds that a department’s strength is its numerous training programs, this is something the organization should continue doing. If a weakness is the organization’s lack of consistent compensation throughout all job titles, then the opportunity to review and revise the compensation policies presents itself. In other words, the company’s SWOT analysis provides a basis to address some of the issues in the organization, but it can be whittled down to also address issues within the department.
Table 2.3 Sample HR Department SWOT Analysis for Techno, Inc.
Prioritize Issues and Actions
Based on the data gathered in the last step, the HRM manager should prioritize the goals and then put action plans together to deal with these challenges. For example, if an organization identifies that they lack a comprehensive training program, plans should be developed that address this need. (Training needs are discussed in Chapter 8 “Training and Development” .) An important aspect of this step is the involvement of the management and executives in the organization. Once you have a list of issues you will address, discuss them with the management and executives, as they may see other issues or other priorities differently than you. Remember, to be effective, HRM must work with the organization and assist the organization in meeting goals. This should be considered in every aspect of HRM planning.
Draw Up an HRM Plan
Once the HRM manager has met with executives and management, and priorities have been agreed upon, the plans are ready to be developed. Detailed development of these plans will be discussed in Section 2.2 “Writing the HRM Plan” . Sometimes companies have great strategic plans, but when the development of the details occurs, it can be difficult to align the strategic plan with the more detailed plans. An HRM manager should always refer to the overall strategic plan before developing the HRM strategic plan and HR plans.
Even if a company does not have an HR department, HRM strategic plans and HR plans should still be developed by management. By developing and monitoring these plans, the organization can ensure the right processes are implemented to meet the ever-changing needs of the organization. The strategic plan looks at the organization as a whole, the HRM strategic plan looks at the department as a whole, and the HR plan addresses specific issues in the human resource department.
Key Takeaways
- Personnel management and HRM are different ways of looking at the job duties of human resources. Twenty years ago, personnel management focused on administrative aspects. HRM today involves a strategic process, which requires working with other departments, managers, and executives to be effective and meet the needs of the organization.
- In general, HRM focuses on several main areas, which include staffing, policy development, compensation and benefits, retention issues, training and development, and regulatory issues and worker protection.
- To be effective, the HR manager needs to utilize technology and involve others.
- As part of strategic planning, HRM should conduct a strategic analysis, identify HR issues, determine and prioritize actions, and then draw up the HRM plan.
- What is the difference between HR plans and HRM strategic plans? How are they the same? How are they different?
- Of the areas of focus in HRM, which one do you think is the most important? Rank them and discuss the reasons for your rankings.
de Kok, J. and Lorraine M. Uhlaner, “Organization Context and Human Resource Management in the Small Firm” (Tinbergen Institute Discussion Papers 01-038/3, Tinbergen Institute, 2001), accessed August 13, 2011, http://ideas.repec.org/s/dgr/uvatin.html .
Kaufman, G., “How to Fix HR,” Harvard Business Review , September 2006, accessed July 11, 2011, http://hbr.org/2006/09/how-to-fix-hr/ar/1 .
Losey, M., “HR Comes of Age,” HR Magazine , March 15, 1998, accessed July 11, 2011, http://findarticles.com/p/articles/mi_m3495/is_n3_v43/ai_20514399 .
Ulrich, D., “Evaluating the Ulrich Model,” Acerta, 2011, accessed July 11, 2011, http://www.goingforhr.be/extras/web-specials/hr-according-to-dave-ulrich#ppt_2135261 .
Ulrich, D. and Wayne Brockbank, The HR Value Proposition (Boston: Harvard Business Press, 2005), 9–14.
Human Resource Management Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.
How Is Human Resource Planning Integrated With Strategic Planning?
All businesses, no matter how small, have three categories of resources available to them: the technology they use to create a product or service; the finance they use to operate and grow the business, and the people whose talents they use to accomplish the company’s goals.
Strategic planning is the process of figuring out why the organization is in business and what long-term goals it wants to achieve with its available resources. Human talent is one of those resources, so there’s a direct link between strategic and human resources planning – neither one can exist without the other.
What Is Strategic Planning?
The purpose of strategic planning is out figure out what a company wants to do and why it is in business. For example, an organization might decide that it wants to diversify into new markets because it has gone as far as it can go in its current markets. The strategic options here include:
Developing new products to sell to its existing customers.
Also Read: How Is Human Resource Planning Integrated With Strategic Planning?
Selling the same products to a completely new group of customers, such as people in a different country.
Buying a company that operates a different business model that may or may not complement the company’s business model.
The process of strategic planning would involve investigating all of these options and deciding which one represents the company’s vision of the future. From there, the company’s leadership team would start drilling down into the specific strategies that can enable the company to meet its big-picture goals.
What Is the Strategic Planning Process?
Businesses typically look three to five years ahead when formulating a strategic plan, and the process results in a document that articulates the company’s vision, mission, big-picture goals and the broad strategies it will use to reach those goals. This planning document is intended to guide leadership in its decision-making.
A key part of strategic planning is assessing the company’s resources. It’s easy for any company to dream big and have stratospheric ambitions, but what the company can realistically achieve is limited by the number and type of resources it has at its disposal. For most businesses, those resources fall into three main categories:
Technology resources: This includes all the equipment, processes and infrastructure the business uses to create the products and services that it brings to market.
Financial resources: Finance comprises all the liquid resources the company can use to carry out its business operations – namely cash in hand, short-term and long-term bank deposits, liquid financial investments like stocks and bonds, and approved bank loans.
Human resources: This resource comprises the people whose talents, skills and personal characteristics the business can use to accomplish its strategic goals. While technology and money are important assets, human resources are the most important, because technology and money need people to manage them.
As you can see, human resources are an integral part of any strategic plan. If the business does not have the right skills and talent in place to achieve its goals, then the strategic plan will fail due to a lack of knowledge and manpower. Similarly, if talent is acquired and deployed without reference to the company’s strategic goals, then you’re going to end up with a lot of people doing jobs that don’t add value to the business, and which don’t move the company closer to where it wants to be.
What Is Human Resource Strategic Planning?
The purpose of human resource planning is look into the future and decide what skills, knowledge and competencies the business is going to need in one, three or five years’ time to meet its strategic goals. For example, if the company is currently outsourcing its marketing function but intends to bring this function in-house, then an obvious early strategy is to recruit a full marketing team, from a senior manager all the way down to a junior marketing associate or intern.
Whatever the mission of the business, one of the major objectives of human resource planning is to dig into the talent pipeline and answer the following questions:
How can the business attract the right type of people in the right numbers? What kind of training and development can it offer to its current employees, to close any knowledge gaps? How can it balance projected labor demand with supply so there is no labor surplus or understaffing? Who are its key people, and how can it incentivize them to stay?
Answering these questions ensures the business has the right people in the right numbers in the right job roles to ensure the company’s profitability.
What Is the Relationship Between Human Resource Planning and Business Strategy?
Strategic planning and human resources planning basically have a symbiotic relationship, in that each function is dependent on the other. Here are some examples of how the relationship works in practice:
Impact assessments
When leaders start developing a strategic plan, they will liaise with different department heads to see how the proposed business strategies might affect them. The human resources planning team will figure out the financial impact of the initiative based on the recruiting, training and retention strategies that may be necessary to support the plan. If the initiative involves downsizing, for example, then human resources managers must look at the various options for decreasing the labor supply through dismissals, retirements, transfers out of the department, sabbaticals and voluntary quitting.
Invariably, there will be a time cost associated with a new initiative. It’s up to HR to feedback how long it will take to hire or upskill permanent staff members and whether the company can work with contractors in the interim. This helps senior leaders develop a timescale for the new initiative.
Executing the plan
As soon as a strategic initiative receives the green light, the human resources team must ready the company’s employees for the changes that are about to ensue. This might include changing people’s job descriptions, moving people between job units, policy making, motivation strategies, developing training programs, and pinpointing and eliminating labor shortages through recruitment and outsourcing.
Feedback and monitoring
Once the strategic initiative is implemented, HR will monitor the changes that are being made to the workforce to establish whether the policies are sufficient, affordable and sustainable. Because the strategic plan is a long-term plan, it is crucial for the business to keep monitoring its talent pipeline, and keep updating its demand forecast, to ensure that the business always has the right people in place to meet its objectives.
Which Comes First, the Chicken or the Egg?
Because strategic planning and HR planning are interdependent, it really doesn’t matter which plan the leadership team begins to develop first. In fact, they probably should be developed in conjunction with each other. That’s because the strategic plan cannot be finalized until there are supporting talent strategies in place from human resources, and the human resources plan cannot be finalized until the long-term goals of the company are clear.
The most effective organizations are those that achieve alignment between the technology, finance and human resources of the business and the formulation and implementation stages of the strategic plan. It should be an integrative activity, rather than a leader-follower process.
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4 steps to strategic human resource planning
Reading time: about 6 min
4 steps to strategic human resources planning
- Assess current HR capacity
- Forecast HR requirements
- Develop talent strategies
- Review and evaluate
It’s easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer demands. But despite its obvious importance, many organizations do not have a strategic human resource planning process in place, with many HR professionals reporting their departments need to improve strategic alignment.
If you’ve considered developing an HR planning process, you’re in the right place. This article will explain what human resource planning entails and how to document your strategic plan. With this knowledge under your belt, you’ll be filling positions and growing as a company in no time.
Introduction to strategic human resource planning
In order to improve the strategic alignment of staff and other resources, it’s essential to understand how to create a strategic HR planning process. At its most basic level, strategic human resource planning ensures adequate staffing to meet your organization’s operational goals, matching the right people with the right skills at the right time.
It’s important to ask where your organization stands currently and where it is going for your plan to remain flexible. Each company’s plan will look slightly different depending on its current and future needs, but there is a basic structure that you can follow to ensure you’re on the right track.
The strategic human resource planning process begins with an assessment of your current staff, evaluating whether it fits the organization’s needs. After that, you can move on to forecasting future staffing needs based on business goals. From there, you’ll need to align your organization’s strategy with employment planning and implement a plan to not only to hire new employees but also to retain and properly train the new hires —and your current employees—based on business changes.
Read on to understand human resource planning in more detail.
1. Assess current HR capacity
The first step in the human resource planning process is to assess your current staff. Before making any moves to hire new employees for your organization, it’s important to understand the talent you already have at your disposal. Develop a skills inventory for each of your current employees.
You can do this in a number of ways, such as asking employees to self-evaluate with a questionnaire, looking over past performance reviews, or using an approach that combines the two. Use the template below to visualize that data.
2. Forecast HR requirements
Once you have a full inventory of the resources you already have at your disposal, it’s time to begin forecasting future needs. Will your company need to grow its human resources in number? Will you need to stick to your current staff but improve their productivity through efficiency or new skills training? Are there potential employees available in the marketplace?
It is important to assess both your company’s demand for qualified employees and the supply of those employees either within the organization or outside of it. You’ll need to carefully manage that supply and demand.
Demand forecasting
Demand forecasting is the detailed process of determining future human resources needs in terms of quantity—the number of employees needed—and quality—the caliber of talent required to meet the company's current and future needs.
Supply forecasting
Supply forecasting determines the current resources available to meet the demands. With your previous skills inventory, you’ll know which employees in your organization are available to meet your current demand. You’ll also want to look outside of the organization for potential hires that can meet the needs not fulfilled by employees already present in the organization.
Need advice on calculating your staffing needs and developing a staffing plan?
Matching demand and supply
Matching the demand and supply is where the hiring process gets tricky—and where the rest of the human resources management planning process comes into place. You’ll develop a plan to link your organization’s demand for quality staff with the supply available in the market. You can achieve this by training current employees, hiring new employees, or combining the two approaches.
3. Develop talent strategies
Recruitment
In the recruitment phase of the talent development process , you begin the search for applicants that match the skills your company needs. This phase can involve posting on job websites, searching social networks like LinkedIn for qualified potential employees, and encouraging current employees to recommend people they know who might be a good fit.
Once you have connected with a pool of qualified applicants, conduct interviews and skills evaluations to determine the best fit for your organization. If you have properly forecasted supply and demand, you should have no trouble finding the right people for the right roles.
Decide the final candidates for the open positions and extend offers.
Bring clarity to the hiring process to find the best candidates for your company.
Training and development
After hiring your new employees, it's time to bring them on board. Organize training to get them up to speed on your company’s procedures. Encourage them to continue to develop their skills to fit your company’s needs as they change. Find more ideas on how to develop your own employee onboarding process , and then get started with this onboarding timeline template.
Employee remuneration and benefits administration
Keep your current employees and new hires happy by offering competitive salary and benefit packages and by properly rewarding employees who go above and beyond. Retaining good employees will save your company a lot of time and money in the long run.
Performance management
Institute regular performance reviews for all employees. Identify successes and areas of improvement. Keep employees performing well with incentives for good performance.
Employee relations
A strong company culture is integral in attracting top talent. Beyond that, make sure your company is maintaining a safe work environment for all, focusing on employee health, safety, and quality of work life.
4. Review and evaluate
Once your human resource process plan has been in place for a set amount of time, you can evaluate whether the plan has helped the company to achieve its goals in factors like production, profit, employee retention, and employee satisfaction. If everything is running smoothly, continue with the plan, but if there are roadblocks along the way, you can always change up different aspects to better suit your company’s needs.
Why document your strategic HR plan
Now that you know the steps to strategic human resource planning, it's time to adapt those steps to your own organization and determine how to execute.
There are a number of reasons to document your strategic human resources plan, particularly in a visual format like a flowchart. Through documentation, you standardize the process, enabling repeated success. Documentation also allows for better evaluation, so you know what parts of your plan need work. In addition, a properly documented plan allows you to better communicate the plan throughout the organization, including how everyone, from the top down, can contribute to make sure the plan works.
Document every step of the process, from beginning to end, and find room for improvement in your human resources process along the way.
Start creating your own strategic human resource plan with this template.
Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.
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Module 5: Workforce Planning
Business strategy and workforce planning, learning outcomes.
- Describe the relationship between business strategy and workforce planning
What is Workforce Planning?
We’ve previously discussed the strategic planning process and the role that HR management plays in supporting the planning and implementation process. As stated in Human Resources Today , the role of human resource management is to ensure that an organization has the talent—the right combination of skills, knowledge, aptitude and attitude—to achieve its strategic goals. The organization’s strategy, including its mission or “why,” core values and culture as well as its competitive strategy, has implications for not only human resource structure, policies and practices but how roles are designed and valued. Workforce planning is not simply a matter of filling open requisitions, it is a complex research and design problem that involves developing a detailed understanding of a role, it’s requirements and how that role relates to organizational strategy and to other roles within the organization.
The state of California’s Human Resource Department abbreviated definition of workforce planning is “having the right number of people with the right skills in the right jobs at the right time.” [1] Good as far as it goes, but this definition doesn’t capture the complexity of workforce planning in what is, practically speaking, a full employment economy on the verge of the next industrial revolution. HRZone’s definition better reflects these operating realities: “workforce planning is the process of ensuring an organisation has current and future access to the human capital it needs to perform effectively.” [2] Using the term “access” also reflects the increasing use of alternative employment—for example, contract and temporary—rather than a traditional full-time employee relationship.
PRactice Question
The workplace planning process.
Figure 1. The Workplace Planning Process
Workplace planning is generally done based on a multi-year horizon (for example, 3–5 or 5–10 years) and consists of a six step process, as illustrated in Figure 1. The steps in the process are fleshed out based largely on the federal Office of Personnel Management’s workforce management training materials. [3]
- Strategic planning. Align the workforce planning process with the organization’s strategic plan and annual business plan to support achievement of long-term (strategic plan) and short-time (annual performance) goals and objectives.
- Current workforce analysis. Analyze current resources, including projections for training and development and turnover.
- Identification of future workforce requirements. Develop specifications for the types, quantity, and location of human resources required to accomplish strategic objectives
- Gap analysis. Identify the gaps between current and projected workforce needs.
- Action planning. Identify how to close resource gaps, including development of implementation plans and associated evaluation metrics. Plans may encompass a range of activities including recruiting, training, reskilling, organizational restructuring, contracting/outsourcing, automation and succession planning.
- Execution and evaluation. Execution involves, in brief, establishing roles and responsibilities and securing required resources. Evaluation involves monitoring progress relative to goals and making adjustments as necessary to reflect changes in plan assumptions or other relevant factors.
As the circular design implies, this is a continuous rather than linear—start to end—process. For perspective on the significance of this process, the state of California’s HR departments notes that “workforce planning informs recruitment, retention, employee development, knowledge transfer and succession planning.” [4] For perspective on sequencing, author, blogger (HR Bartender) and president of human resource consulting firm ITM Group, Inc., Sharlyn Lauby notes that “before companies can start thinking about their succession plans, they have to understand their jobs.” [5]
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- " Statewide Workforce Planning ." California Department of Human Resources. Accessed September 10, 2019. ↵
- " What is Workforce Planning? " HR Zone. Accessed September 10, 2019. ↵
- " OPM's Workforce Planning Model ." opm.gov. Accessed September 10, 2019. ↵
- " State of California Workforce Planning Model ." California Department of Human Resources. Accessed September 10, 2019. ↵
- Rassi, Elias. " 6 Quotes About the Value of Succession Planning from 2015 ." SABA Blog. December 30, 2015. Accessed September 10, 2019. ↵
- Business Strategy and Workforce Planning. Authored by : Nina Burokas. Provided by : Lumen Learning. License : CC BY: Attribution
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- Human Resource Planning (HRP)
- Understanding HRP
What Is the Goal of Human Resource Planning (HRP)?
- Human Resource Planning FAQs
The Bottom Line
- Business Essentials
Human Resource Planning (HRP) Meaning, Process, and Examples
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
What Is Human Resource Planning (HRP)?
Human resource planning (HRP) is the continuous process of systematic planning to achieve optimum use of an organization's most valuable asset—quality employees. Human resources planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.
There are four key steps to the HRP process. They include analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and supporting organizational goals. HRP is an important investment for any business as it allows companies to remain both productive and profitable.
Key Takeaways
- Human resource planning (HRP) is a strategy used by a company to maintain a steady stream of skilled employees while avoiding employee shortages or surpluses.
- Having a good HRP strategy in place can mean productivity and profitability for a company.
- There are four general steps in the HRP process: identifying the current supply of employees, determining the future of the workforce, balancing between labor supply and demand, and developing plans that support the company's goals.
Michela Buttignol
What Is Human Resource Planning (HRP) Used For?
Human resource planning allows companies to plan ahead so they can maintain a steady supply of skilled employees. The process is used to help companies evaluate their needs and to plan ahead to meet those needs.
Human resource planning needs to be flexible enough to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term. HRP starts by assessing and auditing the current capacity of human resources.
Here, identifying a company's skill set and targeting the skills a company needs enables it to strategically reach business goals and be equipped for future challenges. To remain competitive, businesses may need advanced skills or to upskill their employees as the market environment evolves and changes.
To retain employees and remain competitive, HRP often looks at organizational design, employee motivation, succession planning, and increasing return on investment overall.
Challenges of Human Resource Planning (HRP)
The challenges to HRP include forces that are always changing. These include employees getting sick, getting promoted, going on vacation, or leaving for another job. HRP ensures there is the best fit between workers and jobs, avoiding shortages and surpluses in the employee pool.
To help prevent future roadblocks and satisfy their objectives, HR managers have to make plans to do the following:
- Find and attract skilled employees.
- Select, train, and reward the best candidates.
- Cope with absences and deal with conflicts.
- Promote employees or let some of them go.
Investing in HRP is one of the most important decisions a company can make. After all, a company is only as good as its employees, and a high level of employee engagement can be essential for a company's success. If a company has the best employees and the best practices in place, it can mean the difference between sluggishness and productivity, helping to lead a company to profitability.
What Are the Four Steps to Human Resource Planning (HRP)?
There are four general, broad steps involved in the human resource planning process. Each step needs to be taken in sequence in order to arrive at the end goal, which is to develop a strategy that enables the company to successfully find and retain enough qualified employees to meet the company's needs.
Analyzing labor supply
The first step of human resource planning is to identify the company's current human resources supply. In this step, the HR department studies the strength of the organization based on the number of employees, their skills, qualifications, positions, benefits, and performance levels.
Forecasting labor demand
The second step requires the company to outline the future of its workforce. Here, the HR department can consider certain issues like promotions, retirements, layoffs, and transfers—anything that factors into the future needs of a company. The HR department can also look at external conditions impacting labor demand , such as new technology that might increase or decrease the need for workers.
Balancing labor demand with supply
The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis that lays out specific needs to narrow the supply of the company's labor versus future demand. This analysis will often generate a series of questions, such as:
- Should employees learn new skills?
- Does the company need more managers?
- Do all employees play to their strengths in their current roles?
Developing and implementing a plan
The answers to questions from the gap analysis help HR determine how to proceed, which is the final phase of the HRP process. HR must now take practical steps to integrate its plan with the rest of the company. The department needs a budget , the ability to implement the plan, and a collaborative effort with all departments to execute that plan.
Common HR policies put in place after this fourth step may include policies regarding vacation, holidays, sick days, overtime compensation, and termination.
The goal of HR planning is to have the optimal number of staff to make the most money for the company. Because the goals and strategies of a company change over time, human resource planning must adapt accordingly. Additionally, as globalization increases, HR departments will face the need to implement new practices to accommodate government labor regulations that vary from country to country.
The increased use of remote workers by many corporations will also impact human resource planning and will require HR departments to use new methods and tools to recruit, train, and retain workers.
Why Is Human Resource Planning Important?
Human resource planning (HRP) allows a business to better maintain and target the right kind of talent to employ—having the right technical and soft skills to optimize their function within the company. It also allows managers to better train the workforce and help them develop the required skills.
What Is "Hard" vs. "Soft" Human Resource Planning?
Hard HRP evaluates various quantitative metrics to ensure that the right number of the right sort of people are available when needed by the company. Soft HRP focuses more on finding employees with the right corporate culture, motivation, and attitude. Often these are used in tandem.
What Are the Basic Steps in HRP?
HRP begins with an analysis of the available labor pool from which a company can draw. It then evaluates the firm's present and future demand for various types of labor and attempts to match that demand with the supply of job applicants.
Quality employees are a company's most valuable asset. Human resource planning involves the development of strategies to ensure that a business has an adequate supply of employees to meet its needs and can avoid either a surplus or a lack of workers.
There are four general steps in developing such a strategy: first, analyzing the company's current labor supply; second, determining the company's future labor needs; third, balancing the company's labor needs with its supply of employees; and fourth, developing and implementing the HR plan throughout the organization.
A solid HRP strategy can help a company be both productive and profitable.
International Journal of Business and Management Invention. " Human Resource Planning-An Analytical Study ," Page 64.
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Describe the dominant approaches to HR planning
Evaluate the effectiveness of commonly used analytical HR planning techniques
- Design work
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Malik, A. (2022). Work Design and HR Planning: A Strategic Perspective. In: Malik, A. (eds) Strategic Human Resource Management and Employment Relations. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-90955-0_8
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2.2: Strategic Planning
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Learning Objectives
- Explain the differences been HRM and personnel management.
- Be able to define the steps in HRM strategic planning.
In the past, human resource management (HRM) was called the personnel department. In the past, the personnel department hired people and dealt with the hiring paperwork and processes. It is believed the first human resource department was created in 1901 by the National Cash Register Company (NCR). The company faced a major strike but eventually defeated the union after a lockout. (We address unions in Chapter 12 .) After this difficult battle, the company president decided to improve worker relations by organizing a personnel department to handle grievances, discharges, safety concerns, and other employee issues. The department also kept track of new legislation surrounding laws impacting the organization. Many other companies were coming to the same realization that a department was necessary to create employee satisfaction, which resulted in more productivity. In 1913, Henry Ford saw employee turnover at 380 percent and tried to ease the turnover by increasing wages from $2.50 to $5.00, even though $2.50 was fair during this time period (Losey, 2011). Of course, this approach didn’t work for long, and these large companies began to understand they had to do more than hire and fire if they were going to meet customer demand.
More recently, however, the personnel department has divided into human resource management and human resource development, as these functions have evolved over the century. HRM is not only crucial to an organization’s success, but it should be part of the overall company’s strategic plan, because so many businesses today depend on people to earn profits. Strategic planning plays an important role in how productive the organization is.
Most people agree that the following duties normally fall under HRM. Each of these aspects has its own part within the overall strategic plan of the organization:
- Staffing. Staffing includes the development of a strategic plan to determine how many people you might need to hire. Based on the strategic plan, HRM then performs the hiring process to recruit and select the right people for the right jobs. We discuss staffing in greater detail in Chapter 4 , Chapter 5 , and Chapter 6 .
- Basic workplace policies. Development of policies to help reach the strategic plan’s goals is the job of HRM. After the policies have been developed, communication of these policies on safety, security, scheduling, vacation times, and flextime schedules should be developed by the HR department. Of course, the HR managers work closely with supervisors in organizations to develop these policies. Workplace policies will be addressed throughout the book.
- Compensation and benefits. In addition to paychecks, 401(k) plans, health benefits, and other perks are usually the responsibility of an HR manager. Compensation and benefits are discussed in Chapter 6 and Chapter 7 .
- Retention. Assessment of employees and strategizing on how to retain the best employees is a task that HR managers oversee, but other managers in the organization will also provide input. Chapter 9 , Chapter 10 , and Chapter 11 cover different types of retention strategies, from training to assessment.
- Training and development. Helping new employees develop skills needed for their jobs and helping current employees grow their skills are also tasks for which the HRM department is responsible. Determination of training needs and development and implementation of training programs are important tasks in any organization. Training is discussed in great detail in Chapter 9 , including succession planning. Succession planning includes handling the departure of managers and making current employees ready to take on managerial roles when a manager does leave.
- Regulatory issues and worker safety. Keeping up to date on new regulations relating to employment, health care, and other issues is generally a responsibility that falls on the HRM department. While various laws are discussed throughout the book, unions and safety and health laws in the workplace are covered in Chapter 12 and Chapter 13 .
In smaller organizations, the manager or owner is likely performing the HRM functions (de Kok & Uhlaner, 2001). They hire people, train them, and determine how much they should be paid. Larger companies ultimately perform the same tasks, but because they have more employees, they can afford to employ specialists, or human resource managers, to handle these areas of the business. As a result, it is highly likely that you, as a manager or entrepreneur, will be performing HRM tasks, hence the value in understanding the strategic components of HRM.
HRM vs. Personnel Management
Human resource strategy is an elaborate and systematic plan of action developed by a human resource department. This definition tells us that an HR strategy includes detailed pathways to implement HRM strategic plans and HR plans. Think of the HRM strategic plan as the major objectives the organization wants to achieve, and the HR plan as the specific activities carried out to achieve the strategic plan. In other words, the strategic plan may include long-term goals, while the HR plan may include short-term objectives that are tied to the overall strategic plan. As mentioned at the beginning of this chapter, human resource departments in the past were called personnel departments. This term implies that the department provided “support” for the rest of the organization. Companies now understand that the human side of the business is the most important asset in any business (especially in this global economy), and therefore HR has much more importance than it did twenty years ago. While personnel management mostly involved activities surrounding the hiring process and legal compliance, human resources involves much more, including strategic planning, which is the focus of this chapter. The Ulrich HR model, a common way to look at HRM strategic planning, provides an overall view of the role of HRM in the organization. His model is said to have started the movement that changed the view of HR; no longer merely a functional area, HR became more of a partnership within the organization. While his model has changed over the years, the current model looks at alignment of HR activities with the overall global business strategy to form a strategic partnership (Ulrich & Brockbank, 2005). His newly revised model looks at five main areas of HR:
- Strategic partner. Partnership with the entire organization to ensure alignment of the HR function with the needs of the organization.
- Change agent. The skill to anticipate and respond to change within the HR function, but as a company as a whole.
- Administrative expert and functional expert. The ability to understand and implement policies, procedures, and processes that relate to the HR strategic plan.
- Human capital developer. Means to develop talent that is projected to be needed in the future.
- Employee advocate . Works for employees currently within the organization.
According to Ulrich (Ulrich, 2011), implementation of this model must happen with an understanding of the overall company objectives, problems, challenges, and opportunities. For example, the HR professional must understand the dynamic nature of the HRM environment, such as changes in labor markets, company culture and values, customers, shareholders, and the economy. Once this occurs, HR can determine how best to meet the needs of the organization within these five main areas.
HRM as a Strategic Component of the Business
- David Ulrich discusses the importance of bringing HR to the table in strategic planning.
Keeping the Ulrich model in mind, consider these four aspects when creating a good HRM strategic plan:
- Make it applicable. Often people spend an inordinate amount of time developing plans, but the plans sit in a file somewhere and are never actually used. A good strategic plan should be the guiding principles for the HRM function. It should be reviewed and changed as aspects of the business change. Involvement of all members in the HR department (if it’s a larger department) and communication among everyone within the department will make the plan better.
- Be a strategic partner. Alignment of corporate values in the HRM strategic plan should be a major objective of the plan. In addition, the HRM strategic plan should be aligned with the mission and objectives of the organization as a whole. For example, if the mission of the organization is to promote social responsibility, then the HRM strategic plan should address this in the hiring criteria.
- Involve people. An HRM strategic plan cannot be written alone. The plan should involve everyone in the organization. For example, as the plan develops, the HR manager should meet with various people in departments and find out what skills the best employees have. Then the HR manager can make sure the people recruited and interviewed have similar qualities as the best people already doing the job. In addition, the HR manager will likely want to meet with the financial department and executives who do the budgeting, so they can determine human resource needs and recruit the right number of people at the right times. In addition, once the HR department determines what is needed, communicating a plan can gain positive feedback that ensures the plan is aligned with the business objectives.
- Understand how technology can be used. Organizations oftentimes do not have the money or the inclination to research software and find budget-friendly options for implementation. People are sometimes nervous about new technology. However, the best organizations are those that embrace technology and find the right technology uses for their businesses. There are thousands of HRM software options that can make the HRM processes faster, easier, and more effective. Good strategic plans address this aspect.
HR managers know the business and therefore know the needs of the business and can develop a plan to meet those needs. They also stay on top of current events, so they know what is happening globally that could affect their strategic plan. If they find out, for example, that an economic downturn is looming, they will adjust their strategic plan. In other words, the strategic plan needs to be a living document, one that changes as the business and the world changes.
Human Resource Recall
Have you ever looked at your organization’s strategic plan? What areas does the plan address?
The Steps to Strategic Plan Creation
As we addressed in “The Steps to Strategic Plan Creation” , HRM strategic plans must have several elements to be successful. There should be a distinction made here: the HRM strategic plan is different from the HR plan. Think of the HRM strategic plan as the major objectives the organization wants to achieve, while the HR plan consists of the detailed plans to ensure the strategic plan is achieved. Oftentimes the strategic plan is viewed as just another report that must be written. Rather than jumping in and writing it without much thought, it is best to give the plan careful consideration.
The goal of “Conduct a Strategic Analysis” is to provide you with some basic elements to consider and research before writing any HRM plans.
Conduct a Strategic Analysis
A strategic analysis looks at three aspects of the individual HRM department:
- Understanding of the company mission and values. It is impossible to plan for HRM if one does not know the values and missions of the organization. As we have already addressed in this chapter, it is imperative for the HR manager to align department objectives with organizational objectives. It is worthwhile to sit down with company executives, management, and supervisors to make sure you have a good understanding of the company mission and values.
- Another important aspect is the understanding of the organizational life cycle. You may have learned about the life cycle in marketing or other business classes, and this applies to HRM, too. An organizational life cycle refers to the introduction, growth, maturity, and decline of the organization, which can vary over time. For example, when the organization first begins, it is in the introduction phase, and a different staffing, compensation, training, and labor/employee relations strategy may be necessary to align HRM with the organization’s goals. This might be opposed to an organization that is struggling to stay in business and is in the decline phase. That same organization, however, can create a new product, for example, which might again put the organization in the growth phase. Table \(\PageIndex{2}\) explains some of the strategies that may be different depending on the organizational life cycle.
- Understanding of the HRM department mission and values. HRM departments must develop their own departmental mission and values. These guiding principles for the department will change as the company’s overall mission and values change. Often the mission statement is a list of what the department does, which is less of a strategic approach. Brainstorming about HR goals, values, and priorities is a good way to start. The mission statement should express how an organization’s human resources help that organization meet the business goals. A poor mission statement might read as follows: “The human resource department at Techno, Inc. provides resources to hiring managers and develops compensation plans and other services to assist the employees of our company.”
- A strategic statement that expresses how human resources help the organization might read as follows: “HR’s responsibility is to ensure that our human resources are more talented and motivated than our competitors’, giving us a competitive advantage. This will be achieved by monitoring our turnover rates, compensation, and company sales data and comparing that data to our competitors” (Kaufman, 2011). When the mission statement is written in this way, it is easier to take a strategic approach with the HR planning process.
- Understanding of the challenges facing the department. HRM managers cannot deal with change quickly if they are not able to predict changes. As a result, the HRM manager should know what upcoming challenges may be faced to make plans to deal with those challenges better when they come along. This makes the strategic plan and HRM plan much more usable.
Source: Seattle University Presentation , accessed July 11, 2011, fac-staff.seattleu.edu/gprussia/web/mgt383/HR%20Planning1.ppt.
Identify Strategic HR Issues
In this step, the HRM professionals will analyze the challenges addressed in the first step. For example, the department may see that it is not strategically aligned with the company’s mission and values and opt to make changes to its departmental mission and values as a result of this information.
Many organizations and departments will use a strategic planning tool that identifies strengths, weaknesses, opportunities, and threats (SWOT analysis) to determine some of the issues they are facing. Once this analysis is performed for the business, HR can align itself with the needs of the business by understanding the business strategy. See Table \(\PageIndex{3}\) for an example of how a company’s SWOT analysis can be used to develop a SWOT analysis for the HR department.
Once the alignment of the company SWOT is completed, HR can develop its own SWOT analysis to determine the gaps between HR’s strategic plan and the company’s strategic plan. For example, if the HR manager finds that a department’s strength is its numerous training programs, this is something the organization should continue doing. If a weakness is the organization’s lack of consistent compensation throughout all job titles, then the opportunity to review and revise the compensation policies presents itself. In other words, the company’s SWOT analysis provides a basis to address some of the issues in the organization, but it can be whittled down to also address issues within the department.
Prioritize Issues and Actions
Based on the data gathered in the last step, the HRM manager should prioritize the goals and then put action plans together to deal with these challenges. For example, if an organization identifies that they lack a comprehensive training program, plans should be developed that address this need. (Training needs are discussed in Chapter 8 .) An important aspect of this step is the involvement of the management and executives in the organization. Once you have a list of issues you will address, discuss them with the management and executives, as they may see other issues or other priorities differently than you. Remember, to be effective, HRM must work with the organization and assist the organization in meeting goals. This should be considered in every aspect of HRM planning.
Draw Up an HRM Plan
Once the HRM manager has met with executives and management, and priorities have been agreed upon, the plans are ready to be developed. Detailed development of these plans will be discussed in Section 2.2 . Sometimes companies have great strategic plans, but when the development of the details occurs, it can be difficult to align the strategic plan with the more detailed plans. An HRM manager should always refer to the overall strategic plan before developing the HRM strategic plan and HR plans.
Even if a company does not have an HR department, HRM strategic plans and HR plans should still be developed by management. By developing and monitoring these plans, the organization can ensure the right processes are implemented to meet the ever-changing needs of the organization. The strategic plan looks at the organization as a whole, the HRM strategic plan looks at the department as a whole, and the HR plan addresses specific issues in the human resource department.
Key Takeaways
- Personnel management and HRM are different ways of looking at the job duties of human resources. Twenty years ago, personnel management focused on administrative aspects. HRM today involves a strategic process, which requires working with other departments, managers, and executives to be effective and meet the needs of the organization.
- In general, HRM focuses on several main areas, which include staffing, policy development, compensation and benefits, retention issues, training and development, and regulatory issues and worker protection.
- To be effective, the HR manager needs to utilize technology and involve others.
- As part of strategic planning, HRM should conduct a strategic analysis, identify HR issues, determine and prioritize actions, and then draw up the HRM plan.
- What is the difference between HR plans and HRM strategic plans? How are they the same? How are they different?
- Of the areas of focus in HRM, which one do you think is the most important? Rank them and discuss the reasons for your rankings.
de Kok, J. and Lorraine M. Uhlaner, “Organization Context and Human Resource Management in the Small Firm” (Tinbergen Institute Discussion Papers 01-038/3, Tinbergen Institute, 2001), accessed August 13, 2011, ideas.repec.org/s/dgr/uvatin.html.
Kaufman, G., “How to Fix HR,” Harvard Business Review , September 2006, accessed July 11, 2011, http://hbr.org/2006/09/how-to-fix-hr/ar/1 .
Losey, M., “HR Comes of Age,” HR Magazine , March 15, 1998, accessed July 11, 2011, findarticles.com/p/articles/mi_m3495/is_n3_v43/ai_20514399.
Ulrich, D., “Evaluating the Ulrich Model,” Acerta, 2011, accessed July 11, 2011, www.goingforhr.be/extras/web-specials/hr-according-to-dave-ulrich#ppt_2135261.
Ulrich, D. and Wayne Brockbank, The HR Value Proposition (Boston: Harvard Business Press, 2005), 9–14.
The new possible: How HR can help build the organization of the future
Business leaders watching their organizations experience profound upheaval because of the COVID-19 crisis may find it difficult to understand what it all means until the dust settles.
But the pandemic hasn’t afforded them, or any of us, that luxury. It has created profound and immediate changes to how societies operate and how individuals interact and work. We have all witnessed an at-scale shift to remote work, the dynamic reallocation of resources, and the acceleration of digitization and automation to meet changing individual and organizational needs.
Organizations have by and large met the challenges of this crisis moment. But as we move toward imagining a postpandemic era , a management system based on old rules—a hierarchy that solves for uniformity, bureaucracy, and control—will no longer be effective. Taking its place should be a model that is more flexible and responsive, built around four interrelated trends: more connection, unprecedented automation, lower transaction costs, and demographic shifts.
To usher in the organization of the future, chief human-resources officers (CHROs) and other leaders should do nothing less than reimagine the basic tenets of organization. Emerging models are creative, adaptable, and antifragile . 1 Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder , New York, NY: Random House Trade Paperbacks, 2012. Corporate purpose fuels bold business moves. “Labor” becomes “talent.” Hierarchies become networks of teams . Competitors become ecosystem collaborators. And companies become more human: inspiring, collaborative, and bent on creating an employee experience that is meaningful and enjoyable .
After the pandemic erupted last year, we spoke with 350 HR leaders about the role of uncertainty in their function. They told us that over the next two years they wanted to prioritize initiatives that strengthen their organization’s ability to drive change in leadership, culture, and employee experience.
How are they doing? In this article, we discuss ways that CHROs can continue to meet the moment by rethinking processes in three fundamental areas: identity, agility, and scalability.
How HR fits in the big picture
McKinsey has recently conducted research on how businesses can best organize for the future . The experimentation underway suggests that future-ready companies share three characteristics: they know what they are and what they stand for; they operate with a fixation on speed and simplicity; and they grow by scaling up their ability to learn and innovate.
HR can help propel this transformation by facilitating positive change in these three key areas, as well as with nine imperatives that radiate out from them (Exhibit 1).
Identity: HR can clarify the meaning of purpose, value, and culture
Companies that execute with purpose have greater odds of creating significant long-term value generation , which can lead to stronger financial performance, increased employee engagement, and higher customer trust.
Home in on the organization’s purpose
What is your company’s core reason for being, and where can you have a unique, positive impact on society? Now more than ever, you need good answers to those questions—purpose is not a choice but a necessity.
CHROs play a vital role in making sure the organization is living its purpose and values . HR can articulate and role-model desired individual mindsets and behaviors linked to purpose by identifying “moments that matter” in the company’s culture and translating purpose into a set of leadership and employee norms and behaviors.
For instance, commercial-vehicle manufacturer Scania holds an annual “Climate Day,” during which the company stops operations for one hour to hold sustainability training, in line with its purpose to “drive the shift toward a sustainable transport system.” 2 Scania Annual and Sustainability Report 2019 , Scania, scania.com.
HR can also ensure that clear changes are made to recruitment and capability-building processes by determining the characteristics of a “purpose driven” employee and embedding these attributes within recruitment, development, and succession planning.
HR can also incorporate purpose-driven metrics into compensation and performance decisions. Companies across industries have embarked on these metrics lately. For example, Seventh Generation, a maker of cleaning and personal-care products, recently built into its incentive system sustainability targets for the company’s entire workforce, in service of its goal of being a zero-waste company by 2025. Shell has plans to set short-term carbon-emissions targets and link executive compensation to performance against them.
Think deeply about talent
Organizations that can reallocate talent in step with their strategic plans are more than twice as likely to outperform their peers. To link talent to value, the best talent should be shifted into critical value-driving roles. That means moving away from a traditional approach, in which critical roles and talent are interchangeable and based on hierarchy.
Getting the best people into the most important roles requires a disciplined look at where the organization really creates value and how top talent contributes . Consider Tesla’s effort to create a culture of fast-moving innovation, or Apple’s obsessive focus on user experience. These cultural priorities are at the core of these companies’ value agendas. The roles needed to turn such priorities into value are often related to R&D and filled with talented, creative people.
To enable this shift, HR should manage talent rigorously by building an analytics capability to mine data to hire, develop, and retain the best employees. HR business partners, who articulate these staffing needs to the executive management team, should consider themselves internal service providers that ensure high returns on human-capital investments. For example, to engage business leaders in a regular review of talent, they can develop semiautomated data dashboards that track the most important metrics for critical roles.
Create the best employee experience possible
Companies know that a better employee experience means a better bottom line. Successful organizations work together with their people to create personalized, authentic, and motivating experiences that tap into purpose to strengthen individual, team, and company performance.
The HR team plays a crucial role in forming employee experience. Organizations in which HR facilitates a positive employee experience are 1.3 times more likely to report organizational outperformance, McKinsey research has shown . This has become even more important throughout the pandemic, as organizations work to build team morale and positive mindsets .
HR should facilitate and coordinate employee experience. Organizations can support this by helping HR evolve, strengthening the function’s capability so that it becomes the architect of the employee experience. Airbnb, for instance, rebranded the CHRO role as global head of employee experience. PayPal focused on HR’s capability and processes to create a better experience for employees, including coaching HR professionals on measuring and understanding that experience, and using technology more effectively.
Strengthen leadership and build capacity for change
Culture is the foundation on which exceptional financial performance is built. Companies with top-quartile cultures (as measured by McKinsey’s Organizational Health Index ) post a return to shareholders 60 percent higher than median companies and 200 percent higher than those in the bottom quartile.
Culture change should be business-led, with clear and highly visible leadership from the top, and execution should be rigorous and consistent. Companies are more than five times more likely to have a successful transformation when leaders have role-modeled the behavior changes they were asking their employees to make.
To strengthen an organization’s identity, HR should ask the following questions:
- How can we develop an energizing sense of purpose that has a tangible impact on our strategic choices and ways of working?
- How can we identify key talent roles and focus them on creating value?
- How can we build a data-driven, systemic understanding of our organizational health?
Agility: HR’s role in flattening the organization
Organizational agility improves both company performance and employee satisfaction . HR can be instrumental in shifting an organization from a traditional hierarchy to a marketplace that provides talent and resources to a collection of empowered small teams, helping them to achieve their missions and acting as a common guiding star.
Adopt new organizational models
For instance, as a part of a multiyear agile transformation, a large European bank worked to establish an in-house agile academy led jointly by coaches and the HR function to drive capability building for the transformation.
To be successful, a transformation should touch every facet of an organization—people, process, strategy, structure, and technology. HR can help create an iterative approach by developing core elements of the people-management process, including new career paths for agile teams, revamped performance management, and capability building. It should lead by example as well, by shifting to agile “flow to work” pools in which individuals are staffed to prioritized tasks.
Create a flexible—and magnetic—workforce
Because many roles are becoming disaggregated and fluid, work will increasingly be defined in terms of skills . The accelerating pace of technological change is widening skill gaps, making them more common and more quick to develop. To survive and deliver on their strategic objectives, all organizations will need to reskill and upskill significant portions of their workforce over the next ten years.
According to a 2018 McKinsey survey , 66 percent of executives said that “addressing potential skills gaps related to automation/digitization” within their workforces was at least a “top ten priority.” HR should help prioritize these talent shifts.
In a more recent survey McKinsey conducted with global executives about the postpandemic workforce, more than a third of respondents said that their organizations were unprepared to address the skill gaps exacerbated by automation and digitization. The shift to digitization has accelerated during the pandemic: 85 percent of companies have picked up the pace of their digitization (including a 48 percent rise in the digitization of customer channels). In light of these trends and the need to shift skills, there is a clear business rationale behind workforce strategy and planning.
HR should be a strategic partner for the business in this regard, by ensuring that the right talent is in place to deliver on core company objectives. HR can also drive workforce planning by reviewing how disruptive trends affect employees, identifying future core capabilities, and assessing how supply and demand apply to future skills gaps.
Moving to a skills focus also requires innovative sourcing to meet specific work-activity needs (for example, the gig economy and automation), and changing which roles companies need to source with traditional full-time-equivalent positions and which can be done by temporary workers or contractors. In the survey with global executives, about 70 percent said that two years from now they expect to use more temporary workers and contractors than they did before the COVID-19 crisis.
During the pandemic, we’ve seen how organizations have come together to utilize talent with transferable skills. For instance, McKinsey has supported Talent Exchange , a platform that uses artificial intelligence to help workers displaced by the crisis.
Make better decisions—faster
Companies that make decisions at the right organizational level and that have fewer reporting layers are more likely to deliver consistently on quality, velocity, and performance outcomes and thus outperform their industry peers. The pandemic has trained the spotlight on the power of fast decision making, as many organizations have had to move dramatically more quickly than they had originally envisioned. For example, one retailer had a plan for curbside delivery that would take 18 months to roll out; once the COVID-19 crisis hit, the plan went operational in just two days.
HR can help with strong decision making by empowering employees to take risks in a culture that rewards them for doing so. McKinsey research revealed that employees who are empowered to make decisions and who receive sufficient coaching from leaders were three times more likely to say that their companies’ delegated decisions were both high quality and speedy .
Introduce next-generation performance management
Companies are experimenting with a wide variety of approaches to improve how they manage performance. According to a McKinsey Global Survey , half of respondents said that performance management had not had a positive effect on employee or organizational performance. Two-thirds reported the implementation of at least one meaningful modification to their performance-management systems.
We identified three practices—managers’ coaching, linking employee goals to business priorities, and differentiated compensation—that increase the chances that a performance-management system will positively affect employee performance. HR plays an important role in embedding these practices in performance management by supporting the goal-setting process, decoupling the compensation and development discussion, investing in manager’s capability building, and embedding technology and analytics to simplify the performance-management process.
To strengthen an organization’s agility, HR should ask the following questions:
- Can we enable more effective decision making by pushing decisions to the edges of the organization, creating psychological safety that empowers people, and building capabilities?
- How do we accelerate the shift to a more diverse and deeply motivated talent base, one that is supported through a human-centric culture that enables outperformance and superior experience?
- Which organizational areas or end-to-end value-creation streams would most benefit from a shift to new ways of working and organizing?
Scalability: How HR can drive value creation
The new normal of large, rapidly recurring skills gaps means that reskilling efforts must be transformational, not business as usual or piecemeal.
Lean into a learning culture by reskilling and upskilling
Effective reskilling and upskilling will require employees to embark on a blended-learning journey that includes traditional learning (training, digital courses, job aids) with nontraditional methods (enhanced peer coaching, learning networks, the mass personalization of change , “nudging” techniques).
For instance, Microsoft shifted from a “know it all” to a “learn it all” ethos, incorporating open learning days, informal social learning opportunities, learning data for internal career paths, and new platforms and products for its partner network.
Memo to HR: Look in the mirror
To drive and facilitate these workforce initiatives, HR must transform itself first. Talent is consistently ranked as a top three priority for CEOs, yet many lack confidence in HR’s ability to deliver. 3 Dominic Barton, Dennis Carey, and Ram Charan, “People before strategy: A new role for the CHRO,” Harvard Business Review , July– August 2015, Volume 93, Number 7–8, pp. 62–71, hbr.org. The HR function is often overburdened with transactional work and not well equipped to create value for the enterprise.
Yet people-first organizations look at business problems from the perspective of how talent creates value, and HR is well positioned to bring data-driven insights to talent decisions. HR can arm itself with data-driven insights and people analytics to support talent-driven transformation, and HR business partners can then consistently make talent decisions based on data.
Create a value-enhancing HR ecosystem
McKinsey analysis has shown that a preponderance of executives recognize how much external partnerships help companies differentiate themselves. Increased value can be created through ecosystems where partners share data, code, and skills. Success now requires “blurry boundaries” and mutually dependent relationships to share value. The need of the hour is for HR to collaborate on and leverage the landscape of HR tech solutions across the employee life cycle—from learning, talent acquisition, and performance management to workforce productivity—to build an effective HR ecosystem.
To strengthen an organization’s scalability, HR should ask the following questions:
- How can we set up platforms spanning multiple players in the ecosystem and enable new sources of value and employee experience through them?
- How can we become the best company to partner with in the ecosystem? How can we set ourselves up for fast partnering and make the ecosystem accessible?
- What are the critical skills that drive future value creation and how can we upskill our talent base accordingly?
Looking ahead: How transformation happens
As the organization of the future takes shape, HR will be the driving force for many initiatives: mapping talent to value; making the workforce more flexible; prioritizing strategic workforce planning, performance management, and reskilling; building an HR platform; and developing an HR tech ecosystem. For other initiatives, HR can help C-suite leaders push forward on establishing and radiating purpose, improving employee experience, driving leadership and culture, and simplifying the organization.
Given the magnitude of the task and the broad portfolio of value-creating HR initiatives, prioritization is critical.
In May of 2020, HR leaders attending a McKinsey virtual conference indicated that over the next two years, they wanted to prioritize initiatives that strengthen agility and identity. That included 27 percent who said that they would focus on responding with agility and 25 percent who prioritized driving leadership, culture, and employee experience. Next came mapping talent to value and establishing and radiating purpose, each at 13 percent (Exhibit 2).
At a second conference for HR leaders, 4 Survey of human-resources leaders at “Reimagine: Organizing for the future,” a McKinsey virtual conference held in June 2020. about half of the assembled CHROs said that they were focusing on reimagining the fundamentals of the organization and rethinking the operating model and ways of working in the next normal.
We see organizations making this shift. Throughout the pandemic, HR has played a central role in how companies build organizational resilience and drive value . CHROs and their teams can continue on this path by connecting talent to business strategy and by implementing changes in the three core areas of identity, agility, and scalability, as well as the nine imperatives that flow from them.
A more flexible and responsive model will also help organizations meet coming demographic shifts and other workforce changes. Millennials are becoming the dominant group in the workforce (with Gen Z close behind), creating novel challenges for organizations to meet their needs. The prominence of the gig economy and alternate models of working will only grow, with 162 million workers in the European Union and the United States working independently— 70 percent of them by choice . And the rapid spread of digital technology and automation is dramatically reshaping the global economy, with half the tasks people perform already automatable today.
These trends are not new, but they are approaching tipping points, placing organization at the top of the CEO agenda. CHROs can help leadership by transforming their own HR organizations: developing and reinforcing clear priorities; embracing new ways of working, including rapid iteration and testing with the business and seeking explicit feedback; and revamping the HR skill set by embracing agility and digital capabilities.
While clearly a trial by fire, the pandemic also provides an opportunity for HR to accelerate its shift from a service to a strategic function, helping to shape a more dynamic organization that is ready to meet the postcrisis future.
Asmus Komm is a partner in McKinsey’s Hamburg office, Florian Pollner is a partner in the Zurich office, Bill Schaninger is a senior partner in the Philadelphia office, and Surbhi Sikka is a consultant in the Gurugram office.
The authors wish to thank Talha Khan for his contributions to this article.
This article was edited by Barbara Tierney, a senior editor in the New York office.
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Hrp And Strategic Planning Have a Reciprocal Relationship Which Means
The relationship between HRP and strategic planning is reciprocal, which means that the two processes are interdependent on each other. HRP ensures that the organization has the right people with the right skills in the right place at the right time. Strategic planning ensures that the organization’s goals are aligned with its human resources.
In business, HR and strategic planning have a reciprocal relationship which means that each one affects the other. Good strategic planning can help an organization to identify and achieve its goals, as well as to develop the necessary human resources to achieve those goals. Likewise, an effective HR strategy can contribute to organizational success by attracting, developing and retaining the talent needed to execute the company’s business strategy.
What is the Relationship between Hrp And Strategic Planning?
In order to answer this question, it is first important to understand the difference between HRP and strategic planning. HRP, or Human Resource Planning, is the process of forecasting future human resource needs and ensuring that the necessary resources are available when needed. Strategic planning, on the other hand, is the process of developing a long-term plan for achieving specific organizational goals. While both processes are important for businesses, they serve different purposes and should not be confused with one another. Now that we have a clear understanding of the difference between HRP and strategic planning, we can answer the question at hand: What is the relationship between HRP and strategic planning? The two processes are closely related in that they both involve making decisions about the future of an organization. However, while strategic planning focuses on setting overall goals and objectives, HRP focuses specifically on forecasting future human resource needs and ensuring that those needs are met. In short, without a well-developed HRP process in place, it would be difficult for an organization to achieve its long-term goals laid out in its strategic plan.
What is the Relationship between Hrm And Strategy?
In order to answer this question, it is first important to understand the individual meanings of “HRM” and “strategy.” Human resources management (HRM) can be defined as “the process of managing people in organizations.” Strategy, on the other hand, can be defined as “a plan of action designed to achieve a specific goal.” Now that we have a basic understanding of the two terms, we can begin to discuss their relationship. Generally speaking, HRM is responsible for ensuring that an organization’s human resources are used effectively and efficiently. In order to do this, HRM must align itself with the organization’s strategy. That is, HRM must ensure that the organization’s human resources are being used in a way that supports and furthers the organization’s strategic goals. If HRM and strategy are not aligned, it is likely that the organization’s human resources will not be used effectively or efficiently, which could lead to negative consequences for the organization. There are many different ways in which HRM can support and further an organization’s strategy. For example, HRM can help to identify talent gaps within an organization and develop strategies for recruiting and retaining top talent. Additionally, HRM can develop training and development programs that help employees acquire the skills they need to support the organization’s strategic goals.
What is the Relationship between Business Planning And Human Resource Planning?
There is a close relationship between business planning and human resource planning. Business planning sets the overall direction for the company, and human resource planning ensures that the company has the right people in place to achieve its objectives. Human resource planning starts with an analysis of the current workforce. This includes looking at skills, experience and education levels, as well as identifying any gaps. Once the current workforce is assessed, future needs can be forecasted. This forecasting takes into account things like planned growth or expansion, changes in technology or processes, and retirements or other turnover. Once the future workforce needs are known, a plan can be put in place to acquire or develop the necessary skills. This may involve training existing staff, recruiting new employees, or outsourcing certain functions. The goal is to ensure that there are enough qualified people available to meet the demands of the business. Businesses need to have both short-term and long-term plans in place. The business plan provides direction for where the company wants to go, while human resource planning ensures that it has the right people in place to get there.
What is the Relationship between Human Resource Management And Human Resource Planning?
Human resource management (HRM) is the process of recruiting, selecting, onboarding, training, appraising, and rewarding employees. Human resource planning (HRP) is the process of identifying the need for and sourcing candidates for future positions within an organization. In order for an organization to be successful, HRM and HRP must work hand-in-hand to ensure that the right people are in the right roles at the right time. One of the key functions of HRM is recruiting. When done effectively, recruiting can help to identify top talent that can be brought into an organization to help achieve its goals and objectives. Recruiting is also a key part of HRP; by sourcing candidates for future positions, organizations can plan ahead to make sure they have the human resources they need to continue operating successfully. Another important function of HRM is training. By providing employees with adequate training, organizations can set them up for success in their roles and help to improve job satisfaction and retention rates. Training is also crucial from a HRP perspective; by ensuring that new hires are properly trained before they start their jobs, organizations can avoid disruptions down the road caused by inexperience or lack of knowledge. Appraisals are another key function of HRM. Through performance appraisals, organizations can provide feedback to employees about their work and identify areas where improvement is needed. Appraisals are also important from a HRP standpoint; by assessing employee performance on a regular basis, organizations can get a better understanding of which individuals have the potential to move into leadership roles in the future. Finally, rewards and recognition are essential components of HRM. By offering incentives like bonuses or salary increases, organizations can motivate employees to perform at their best. Similarly, public recognition or awards can show employees that their hard work is appreciated and valued by upper management.
Strategic Human Resource Planning| Review Class| 03-03-2021||
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Relationship between Human Resource Planning And Strategic Planning Pdf
Organizations today are under pressure to do more with less. This means that they need to be strategic in their approach to human resource planning. The relationship between human resource planning and strategic planning is essential to organizational success. Human resource planning is the process of identifying the workforce requirements of an organization and ensuring that the right people are in the right jobs at the right time. Strategic planning is the process of developing a long-term vision for an organization and setting goals that will help it achieve that vision. The relationship between human resource planning and strategic planning is evident in several ways. First, both processes involve taking a long-term view of organizational needs. Second, both processes require an understanding of the business environment in which the organization operates. Third, both processes must be aligned with each other in order to be effective. Finally, both processes must be reviewed and updated on a regular basis to ensure that they remain relevant. The bottom line is that organizations cannot achieve their long-term goals without effective human resource planning and vice versa. By understanding and managing this relationship, organizations can improve their chances of success significantly.
Difference between Human Resource Planning And Strategic Planning
In any organization, there are two types of planning that are essential for its success: human resource planning and strategic planning. Although both types of planning are important, they are quite different from each other. Here is a look at the key differences between human resource planning and strategic planning: 1. Purpose The main purpose of human resource planning is to ensure that the organization has the right number of employees with the right skills in order to meet its business goals. On the other hand, the main purpose of strategic planning is to develop long-term plans for the overall direction of the organization. 2. Time Frame Human resource planning is typically done on a yearly basis, while strategic planning is usually done on a longer time frame, such as 3-5 years. This is because it can take some time to implement changes based on Strategic Plans. For example, if an organization wants to expand into new markets, it will take some time to research those markets and develop marketing plans before anything else can happen.3 Scope Strategic Planning looks at the “big picture” for an organization while Human Resource Planning focuses more on specific departments or functions within an organization. For example, when developing a Strategic Plan, factors such as company culture, mission/vision statements and core values will be taken into account while these things may not be considered during Human Resource Planning.4 Process The process for human resource planning is more reactive in nature as it responds to changes within the organization (e.g., downsizing). On the other hand, strategic planning is proactive in nature as it sets out specific goals and objectives that need to be met by taking specific actions 4 Output The output from human resource planning includes things like job descriptions and organizational charts while the output from strategicplanning includes documents like business plans and marketing plans.
Internal Analysis Focuses on Culture And Conflicts With an Organization
Internal analysis is a process in which an organization looks at its own culture and conflicts. This type of analysis can help an organization to identify areas that need improvement and make changes accordingly. It can also help to prevent future problems by addressing current issues.
Strategic Planning And Human Resource Planning
Strategic planning and human resource planning are important tools that organizations use to ensure that they have the right people in place to achieve their business goals. By aligning your human resources with your overall business strategy, you can create a more cohesive and effective organization. There are a few key elements to consider when integrating your human resources into your strategic plan: 1. Define your business goals. What are you trying to achieve? How will you know if you’ve been successful? Be as specific as possible. 2. Assess your current workforce. Do you have the skills and experience necessary to achieve your goals? If not, what gaps need to be filled? 3. Develop a recruiting and retention plan. How will you attract the talent you need? Once you have them, how will you keep them engaged and motivated? 4. Create development plans for your employees. What training and development opportunities will help them grow in their roles and contribute to the company’s success? 5. Evaluate progress regularly. As your business grows and changes, so too should your HR strategies.
In any organization, the HR department and strategic planning must have a reciprocal relationship. This means that they both need to communicate and work together on a regular basis. By doing so, they can ensure that the company’s goals are being met and that its employees are being treated fairly.
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Human resources planning (HRP) and strategic planning have a reciprocal relationship, which means\table [ [A,HRP is the implementation of strategic planning], [B,HRP is a product of strategic planning], [,strategic planning decisions affect and are affected by HR concerns], [D,there is no distinction between strategic and HR planning]]
Writer Bio. Human resource strategic planning is the process of forecasting a company's demand for people so the business has the right skills and competencies to meet its long-term business ...
2.1 Strategic Planning - Human Resource Management 2.1 Strategic Planning Learning Objectives Explain the differences been HRM and personnel management. Be able to define the steps in HRM strategic planning. In the past, human resource management (HRM) was called the personnel department.
HRP and strategic planning have a reciprocal relationship, which means. strategic planning decisions affect and are affected by HR concerns. ... when the knowledge, skills, and abilities of a firms Human Resources are not equally available to competitors, these resources are known as: valuable.
The process involves knowing the goals of your company, its abilities, future needs and resources. From there, you put your plan into action, then reassess and pivot if necessary. Here are the ...
The purpose of human resource planning is look into the future and decide what skills, knowledge and competencies the business is going to need in one, three or five years' time to meet its strategic goals. For example, if the company is currently outsourcing its marketing function but intends to bring this function in-house, then an obvious ...
To manage human resources as a means of creating and sustaining CA. human resource planners must redefine their roles. This article describes why human resources impact CA and suggests how planners may begin to assume their new role. To appear in R.S. Schuler, S.A. Youngblood and V. Huber (eds.).
4 steps to strategic human resources planning. Assess current HR capacity. Forecast HR requirements. Develop talent strategies. Review and evaluate. It's easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer ...
To drive HR strategic planning and any HR transformation initiatives, follow these five steps to create an effective human resources strategy that supports enterprise business goals:. Understand your organization's mission, strategy and business goals.; Identify the critical capabilities and skills.; Evaluate the current capabilities and skills of your talent and the HR function, and ...
Align the workforce planning process with the organization's strategic plan and annual business plan to support achievement of long-term (strategic plan) and short-time (annual performance) goals and objectives. Current workforce analysis. Analyze current resources, including projections for training and development and turnover.
The reciprocal relationship between strategic planning and human resource planning means that strategic planning affects, and is affected by, HR planning. True or False Here's the best way to solve it. Expert-verified 100% (2 ratings) Share Answer: True. Reciprocal relations … View the full answer Previous question Next question
Human resource planning (HRP) is a strategy used by a company to maintain a steady stream of skilled employees while avoiding employee shortages or surpluses. Having a good HRP strategy in place...
Strategic Human Resource Planning. HR planning has been defined as having the right number of people, at the right place and right time, with the right set of knowledge, skills and abilities. From a strategic HR planning perspective, one must also focus on the broader environmental and strategic context in which strategic HR planning exercise ...
Human resource planning is a process that identifies current and future human resources needs for an organization to achieve its goals. Human resource planning should serve as a link between human resource management and the overall strategic plan of an organization. Ageing workers population in most western countries and growing demands for ...
The presence of an adequate magnitude of communication is essential, with the alignment of the strategic organizational planning factors with human resource planning being ensured in the desired manner in the long run. This, in turn, leads to effective human resource planning, (Robbins & Judge, 2016). b.
In other words, the strategic plan needs to be a living document, one that changes as the business and the world changes. Figure 2.2.1 2.2. 1: A good HRM strategic plan acknowledges and addresses the use of software in HRM operations. (Howard Russell - Lefroy House - CC BY-NC-ND 2.0.)
To usher in the organization of the future, chief human-resources officers (CHROs) and other leaders should do nothing less than reimagine the basic tenets of organization. Emerging models are creative, adaptable, and antifragile. 1 Corporate purpose fuels bold business moves. "Labor" becomes "talent.".
The relationship between HRP and strategic planning is reciprocal, which means that the two processes are interdependent on each other. HRP ensures that the organization has the right people with the right skills in the right place at the right time. Strategic planning ensures that the organization's goals are aligned with its human resources.
(4.3) Evidence suggests that the integration of human resources planning and strategic planning tends to be most effective when there is a reciprocal relationship between the two processes.
The reciprocal relationship between strategic planning and human resource planning means that strategic planning affects, and is affected by, HR planning. True or False. Instant Video Answer ...
43. SHRP and strategic planning have a reciprocal relationship, which means: A. SHRP is the implementation of strategic planning. B. SHRP is a product of strategic planning. C. strategic planning decisions affect and are affected by HR concerns. D. there is no distinction between strategic and SHR planning. 44.
HRP and strategic planning have a reciprocal relationship, which means CHAPTER 2— STRATEGY AND HUMAN RESOURCES PLANNING TRUE/FALSE 1. Organizations set major objectives and develop comprehensive plans to achieve those objectives through strategic planning. ANS: T ANS : T PTS: 1 REF: p. 50 OBJ: 2-1 TYPE: K 2.
The reciprocal relationship between strategic planning and human resource planning means that strategic planning affects, and is affected by HR planning. ____ True _____ False This problem has been solved! You'll get a detailed solution from a subject matter expert that helps you learn core concepts. See Answer