Strategic HR Planning Meaning, Advantages

Human Resource Strategy (HR Strategy) is a designation for a long-term plan created to achieve objectives in the field of human resource and human capital management and development in the organization. Human Resource strategy is one of the outputs of strategic management in the field of human resources management.

HR strategy in practice: Human Resource Strategy helps to unify and direct the behavior and actions of all people and their overall development in accordance with the needs of the organization. It allows a meaningful planning and management of all work with human resources.

• Defines processes, responsibilities and requirements on recruitment and staff selection
• Defines requirements on staff training and qualification development
• Defines the way of management of work performance, motivating and rewarding people, social programs and employee benefits
• Defines working conditions, labor relations and influences the way of organizing

Human resources strategy usually follows a global strategy and includes specific goals in human resources and a schedule for implementation through projects or other actions and tasks. Sometimes personnel audit can be part of developing a personnel strategy. When creating HR strategy, it is also used a number of analytical techniques and methods such as SWOT Analysis, VRIO Analysis, PESTLE Analysis and more.

HR Planning

Human Resource Planning (HRP) is the process of forecasting the future human resource requirements of the organization and determining as to how the existing human resource capacity of the organization can be utilized to fulfill these requirements. It, thus, focuses on the basic economic concept of demand and supply in context to the human resource capacity of the organization.

It is the HRP process which helps the management of the organization in meeting the future demand of human resource in the organization with the supply of the appropriate people in appropriate numbers at the appropriate time and place. Further, it is only after proper analysis of the HR requirements can the process of recruitment and selection be initiated by the management. Also, HRP is essential in successfully achieving the strategies and objectives of organization. In fact, with the element of strategies and long term objectives of the organization being widely associated with human resource planning these days, HR Planning has now became Strategic HR Planning.

Though, HR Planning may sound quite simple a process of managing the numbers in terms of human resource requirement of the organization, yet, the actual activity may involve the HR manager to face many roadblocks owing to the effect of the current workforce in the organization, pressure to meet the business objectives and prevailing workforce market condition. HR Planning, thus, help the organization in many ways as follows:

• HR managers are in a stage of anticipating the workforce requirements rather than getting surprised by the change of events
• Prevent the business from falling into the trap of shifting workforce market, a common concern among all industries and sectors
• Work proactively as the expansion in the workforce market is not always in conjunction with the workforce requirement of the organization in terms of professional experience, talent needs, skills, etc.
• Organizations in growth phase may face the challenge of meeting the need for critical set of skills, competencies and talent to meet their strategic objectives so they can stand well-prepared to meet the HR needs
• Considering the organizational goals, HR Planning allows the identification, selection and development of required talent or competency within the organization.

It is, therefore, suitable on the part of the organization to opt for HR Planning to prevent any unnecessary hurdles in its workforce needs. An HR Consulting Firm can provide the organization with a comprehensive HR assessment and planning to meet its future requirements in the most cost-effective and timely manner.

An HR Planning process simply involves the following four broad steps:

• Current HR Supply: Assessment of the current human resource availability in the organization is the foremost step in HR Planning. It includes a comprehensive study of the human resource strength of the organization in terms of numbers, skills, talents, competencies, qualifications, experience, age, tenures, performance ratings, designations, grades, compensations, benefits, etc. At this stage, the consultants may conduct extensive interviews with the managers to understand the critical HR issues they face and workforce capabilities they consider basic or crucial for various business processes.
• Future HR Demand: Analysis of the future workforce requirements of the business is the second step in HR Planning. All the known HR variables like attrition, lay-offs, foreseeable vacancies, retirements, promotions, pre-set transfers, etc. are taken into consideration while determining future HR demand. Further, certain unknown workforce variables like competitive factors, resignations, abrupt transfers or dismissals are also included in the scope of analysis.
• Demand Forecast: Next step is to match the current supply with the future demand of HR, and create a demand forecast. Here, it is also essential to understand the business strategy and objectives in the long run so that the workforce demand forecast is such that it is aligned to the organizational goals.
• HR Sourcing Strategy and Implementation: After reviewing the gaps in the HR supply and demand, the HR Consulting Firm develops plans to meet these gaps as per the demand forecast created by them. This may include conducting communication programs with employees, relocation, talent acquisition, recruitment and outsourcing, talent management, training and coaching, and revision of policies. The plans are, then, implemented taking into confidence the mangers so as to make the process of execution smooth and efficient. Here, it is important to note that all the regulatory and legal compliances are being followed by the consultants to prevent any untoward situation coming from the employees.

Strategic HR Planning

Strategic HR planning is an important component of strategic HR management. It links HR management directly to the strategic plan of your organization. Most mid-to large sized organizations have a strategic plan that guides them in successfully meeting their missions. Organizations routinely complete financial plans to ensure they achieve organizational goals and while workforce plans are not as common, they are just as important.

Even a small organization with as few as 10 staff can develop a strategic plan to guide decisions about the future. Based on the strategic plan, your organization can develop a strategic HR plan that will allow you to make HR management decisions now to support the future direction of the organization. Strategic HR planning is also important from a budgetary point of view so that you can factor the costs of recruitment, training, etc. into your organization’s operating budget.

Strategic HR management is defined as:

Integrating human resource management strategies and systems to achieve the overall mission, strategies, and success of the firm while meeting the needs of employees and other stakeholders.

Strategic HR planning

The overall purpose of strategic HR planning is to:

• Ensure adequate human resources to meet the strategic goals and operational plans of your organization the right people with the right skills at the right time
• Keep up with social, economic, legislative and technological trends that impact on human resources in your area and in the sector
• Remain flexible so that your organization can manage change if the future is different than anticipated

Strategic HR planning predicts the future HR management needs of the organization after analyzing the organization’s current human resources, the external labour market and the future HR environment that the organization will be operating in. The analysis of HR management issues external to the organization and developing scenarios about the future are what distinguishes strategic planning from operational planning.

The basic questions to be answered for strategic planning are:

• Where are we going?
• How will we develop HR strategies to successfully get there, given the circumstances?
• What skill sets do we need?

The strategic HR planning process

• The strategic HR planning process has four steps:
• Assessing the current HR capacity
• Forecasting HR requirements
• Gap analysis
• Developing HR strategies to support organizational strategies