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The term “human resources” encompasses everything to do with human capital in an organization.
Most professionals interact with the HR department during a few phases of their careers:
- when they’re being hired and onboarded
- when they’re having periodic performance assessments
- when they quit
But the role of the human resource department goes far beyond these functions.
Human resource planning is the systematic process of strategizing, implementing and evaluating decisions to maximize a workforce’s productivity. It’s critical to grow an organization efficiently and achieve its goals.
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Human Resources Planning Definition
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The Human Resource Planning Process
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Effective Human Resource Planning
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Hurdles to Effective Human Resource Planning
Human Resources Planning Definition
Through HR planning, managers decide how resources are to be used for maximum productivity. Let’s break down the human resource planning definition:
- The human resource planning meaning is to ensure an organization’s personnel and human resources aren’t only productive but also working to the best of their ability
- From hiring the right people to laying them off when necessary to meet the needs of the business, human resource planning covers it all
- The human resource planning definition also includes factors that impact employee performance, recruitment, retention and succession planning
Human resources is a critical support function for any organization, large or small. While a small organization may not have a dedicated HR team, human resource planning will still be part of the portfolio of senior leadership.
The Human Resource Planning Process
In human resource planning examples, there are usually several processes involved in understanding an organization’s needs. Let’s inspect some of them:
Organizational Analysis
Organizational analysis is a method of investigating an organization’s state of affairs. The purpose of the analysis is to understand and improve an organization’s structure, processes and operations. In HR planning, organizational analysis is done to help managers identify the most effective ways of using current assets and employees.
Needs Assessment
The human resource planning definition includes needs assessment. This is analyzing how an organization can benefit from its workforce both currently and in the future. Any hiring needs, training requirements or downsizing issues will be addressed here.
Recruitment Planning
Recruitment is finding, selecting, training and integrating the employees so that the organization can achieve its business goals. HR planning includes a plan for how best to recruit new employees, how many new hires are needed in which functions and at what levels of experience. This will also include employee onboarding.
Training And Development
Employee training and development are processes used to upskill and enhance the existing talent. They can help improve employee performance, increase efficiency and promote job satisfaction. HR planning aims to train all employees, at both junior level and top management, to become more productive.
Performance Review
Performance review is an assessment of performance conducted by the supervisor, employer or even a peer of the individual, along with human resources. It’s conducted for all employees at regular intervals, most often annually, but it might also be at the end of a project. These reviews evaluate employee performance against targets and standards for quality, quantity and costs. Compensation planning for employees is also a part of this. It’s important to reward individuals according to their contribution and level, which will make employees feel valued and reward desired behavior.
Now that we know the human resource planning definition and the various components of the HR function, let’s look at how an organization can plan for these.
Human Resource Planning Examples
The HR department is successful when managers and employees work together to benefit the organization to the best of their ability. Planning is a key part of this process because it allows managers to assess current needs and decide what human resources will be necessary for the future. HR planning can be structured in several different ways. Here are three stages of drawing up and implementing an HR plan:
Strategic HR Plan
A strategic HR plan includes elements such as how many people are needed in a team and a vision of the roles and expertise necessary to achieve organizational goals. An organization can’t advance without the people to do the work in the most efficient manner possible. Thus, strategic HR plans also look at how employees in each department will contribute to the organization.
Operational HR Plan
An operational HR plan is a detailed plan that describes how an organization will execute its strategic HR plan. It describes the roles of each employee in an organization. Operational plans can also include succession planning and performance management systems, including career development, job analysis, job descriptions, standards of performance evaluations and manager training.
Process HR Plan
A process HR plan is where HR collaborates with all members of the business unit to establish workplace best practices. This might include input from employees, managers and leaders. This will provide the human resources team with the opportunity to evaluate existing systems and procedures in a workplace environment, develop ideas for change and build new best practices.
As per the human resource planning definition, there are a few kinds of planning that organizations undertake. There’s a place for both strategic planning and operational thinking in an organization. When implemented properly, they can have a transformative effect on an organization.
Effective Human Resource Planning
Proper HR planning can only take place with the support of the leadership. The human resource function can’t work in isolation. If the true human resource planning meaning is to be realized to the fullest by an organization, these are the benefits it unlocks:
- Human resource management deals with the recruitment, selection, training, compensation and development of employees; if these needs are being met, it’ll increase both productivity and profits
- HR planning helps create a more effective workforce through training and process, increasing productivity levels throughout the organization and reducing costs and waste
- A well-planned HR process can also increase the level of employee satisfaction, which will result in them displaying more productive behaviors that provide higher quality outputs and outcomes for the organization
- Retaining staff will further reduce the time and cost of recruitment, ensuring that it’s done with efficiency and effectiveness
- A well-implemented HR plan can make sure employees are properly trained to the necessary level before they’re integrated into the organization
- HR can also ensure efficient payroll costs
- Human resource planning can help anticipate future needs in an organization; if there’s a technological shift underway, it’ll hire people who can fulfill those roles, allowing the business to maintain its competitive edge
The benefits of an organized, high-performing HR team are evident when we see how organizations that use this process consistently outperform organizations that don’t. As an organization grows, these processes become more complex but also more important.
Hurdles to Effective Human Resource Planning
We’ve seen from human resource planning examples how a good HR plan can help. But it can be a challenge for many organizations too. Here are the common hurdles organizations face with effective HR planning:
- As human resource planning involves evaluating the organization’s current needs, it can be a challenge for businesses experiencing rapid growth or shrinking market share; it can also be a challenge for new entrepreneurs who lack experience
- HR planning is an ongoing need that should be incorporated into other business processes of the organization to be truly effective to determine how best to manage the workforce, hire in a timely way and organize training as needed; this isn’t possible if the other departments are working in silos
- HR planning should consider employee diversity, as well as work goals and objectives; these efforts won’t succeed unless a mandate from leadership drives them
- Human resource planning meaning may be difficult to fulfill as it involves a complex network within organizations; there may be conflicts created by having two or more departments working toward the same goals, fighting over the same resources
- Not all hurdles are internal to an organization – there are also external hurdles to human resource planning. Some of these include:
- Recessions, which have a negative impact on the workforce, making effective HR planning difficult
- Continuous changes in technology that make hiring people with the right skills tough
- Unforeseen circumstances, such as sudden closures because of a pandemic or natural disasters
Human resource planning meaning is of vital importance to organizations hoping to gain or retain their competitive advantage. It’s important to ensure existing employees feel valued and have a chance to grow internally; else, they may feel left behind. Equally, new staff needs to be brought in at the right time, given the necessary training during onboarding and then integrated into teams. As we’ve seen in human resource planning examples, it’s challenging enough when it’s business as usual. With work-from-home mandates, there’s an added layer of complexity.
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