what is hr's role in business planning

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HR’s Role in Strategic Planning

HR's role in strategic planning is often underestimated, but it is crucial for the success and growth of any organization. Strategic planning involves setting long-term goals and determining the best strategies to achieve them. The HR department, with its deep understanding of the workforce, plays a vital role in aligning the company's human resources with its strategic objectives. By integrating HR strategies with overall business strategies, organizations can ensure they have the right talent in place to drive growth and achieve their goals.

One of the key aspects of HR’s role in strategic planning is workforce planning. This involves analyzing current workforce capabilities, forecasting future workforce needs, and developing strategies to bridge any gaps. Effective workforce planning ensures that the organization has the right number of employees with the right skills at the right time. This proactive approach helps in managing talent more efficiently and reduces the risk of skill shortages or excess labor.

Another critical area where HR contributes to strategic planning is in developing and nurturing a strong organizational culture. A positive culture aligns employees with the company's vision and values, fostering an environment of collaboration and innovation. HR professionals are responsible for designing initiatives that promote employee engagement, diversity, and inclusion, which are essential for maintaining a competitive edge in the market. By creating a supportive and dynamic workplace, HR helps to attract and retain top talent, ultimately contributing to the achievement of strategic goals.

Defining Strategic Planning in HR

Strategic planning in HR involves aligning the human resources strategy with the overall business strategy to achieve long-term objectives. It encompasses several key activities, including talent acquisition, employee development, succession planning, and performance management. HR professionals must anticipate future workforce needs, understand the business environment, and create strategies that support the company's goals. By integrating HR practices into the strategic plan, organizations can enhance productivity, innovation, and competitiveness.

The Benefits of HR Involvement in Strategic Planning

Involving HR in strategic planning brings numerous benefits to an organization. One of the primary advantages is improved alignment between the workforce and business objectives. When HR is involved in the strategic planning process, it ensures that human resource initiatives are directly linked to the company's goals. This alignment helps in optimizing workforce performance and achieving business success.

Another significant benefit is the ability to identify and mitigate risks related to human capital. HR professionals can anticipate potential challenges, such as skill shortages or high turnover rates, and develop strategies to address them proactively. This risk management approach helps in maintaining business continuity and achieving strategic goals without major disruptions.

HR’s Role in Talent Management and Development

Talent management and development are critical components of strategic planning. HR’s role in these areas involves identifying key talent, developing their skills, and preparing them for leadership roles. Succession planning is a key aspect of this process, ensuring that there are qualified candidates ready to fill critical positions as they become available. By investing in employee development, organizations can build a strong leadership pipeline and ensure long-term success.

HR professionals also play a crucial role in performance management, which is essential for achieving strategic objectives. By setting clear performance expectations, providing regular feedback, and recognizing and rewarding high performers, HR can drive a culture of excellence and accountability. This approach not only enhances individual performance but also contributes to overall organizational success.

Workforce Analytics and Strategic Planning

Workforce analytics is another area where HR can significantly impact strategic planning. By leveraging data and analytics, HR professionals can gain insights into workforce trends, employee behavior, and overall organizational health. These insights can inform strategic decisions related to talent acquisition, employee engagement, and retention strategies. Workforce analytics also helps in identifying skill gaps and areas for improvement, enabling HR to develop targeted training and development programs.

Additionally, workforce analytics can support diversity and inclusion initiatives by providing data on demographic trends and identifying areas where diversity efforts need to be strengthened. By using data-driven insights, HR can create a more inclusive and equitable workplace, which is essential for attracting and retaining diverse talent.

HR’s Contribution to Organizational Culture

Organizational culture plays a crucial role in achieving strategic goals, and HR is instrumental in shaping and maintaining this culture. By designing programs that promote employee engagement, recognition, and well-being, HR can foster a positive work environment. A strong organizational culture attracts top talent, enhances employee satisfaction, and reduces turnover rates, all of which contribute to achieving strategic objectives.

HR professionals also play a key role in promoting diversity and inclusion within the organization. By implementing policies and practices that support a diverse workforce, HR can help create an inclusive culture where all employees feel valued and respected. This inclusive environment drives innovation, collaboration, and improved business outcomes.

HR's Role in Change Management

Change management is a critical aspect of strategic planning, and HR plays a pivotal role in managing organizational change. Whether it's a merger, acquisition, restructuring, or the implementation of new technologies, HR is responsible for ensuring that employees are prepared for and can adapt to these changes. This involves communication, training, and support to help employees navigate through transitions smoothly.

Effective change management led by HR can minimize resistance and enhance employee buy-in, leading to more successful implementation of strategic initiatives. By addressing the human side of change, HR ensures that the organization remains agile and resilient in the face of evolving business landscapes.

Frequently Asked Questions Related to HR’s Role in Strategic Planning

What is the role of hr in strategic planning.

The role of HR in strategic planning involves aligning human resource strategies with the overall business objectives to ensure the organization has the right talent to achieve its long-term goals. This includes workforce planning, talent management, and developing a strong organizational culture.

How does HR contribute to business strategy?

HR contributes to business strategy by ensuring the workforce is equipped with the necessary skills and competencies to meet strategic objectives. This includes recruiting the right talent, fostering employee development, and managing performance to drive organizational success.

What are the benefits of involving HR in strategic planning?

Involving HR in strategic planning brings numerous benefits, such as improved alignment between workforce capabilities and business goals, better risk management related to human capital, and enhanced employee engagement and retention. This alignment ensures that human resource initiatives directly support business success.

How can HR support talent management and development?

HR supports talent management and development by identifying key talent, providing opportunities for skill enhancement, and preparing employees for leadership roles through succession planning. This investment in employee growth helps build a strong leadership pipeline and ensures long-term organizational success.

What is the importance of workforce analytics in strategic planning?

Workforce analytics is crucial in strategic planning as it provides data-driven insights into workforce trends, employee behavior, and organizational health. These insights help HR professionals make informed decisions about talent acquisition, employee engagement, and retention strategies, ultimately supporting strategic goals.

Aligning human resources and business strategy

Reading time: about 7 min

You have to consider many factors when you create a go-to-market or business strategy. From brand messaging to product roadmaps to sales processes, effective business strategies also rely on the input of lots of people across many departments. 

Few departments have a better bird’s-eye view of the entire organization than human resources. HR professionals can see both why a strategy exists and how it’s developed and implemented. Yet, too often, HR departments don’t have a seat at the strategy table. Let’s take a look at how HR can help shape business strategy and bring it to life. 

Why HR should get involved with setting corporate strategy

Today, business moves faster than ever—it’s a platitude, but it’s still true. Technologies, industries, and consumers themselves continually evolve in a digitally-driven market, and companies continuously shift their strategic focus to keep pace. 

This culture of change has a significant impact on people. Every business decision has a real-life impact, and HR departments are specially equipped to inform strategy and help employees navigate the resulting changes. 

Consider these reasons why it’s so important for HR to align with business strategy: 

• Move in lockstep with the rest of the company: Goals are always more achievable when there is universal buy-in and alignment across teams. 
• Give HR initiatives a strategic focus: In today’s changing economy, there are countless ways to recruit, train, attract, invest in, and support employees. But it’s impossible to tackle every initiative all at once. Aligning with business strategy gives HR a strategic focus and helps prioritize goals. 
• Secure the right talent: Good talent is always valuable, but companies may need to invest in different skill sets or roles at different times. Understanding the strategic goals of the business will help HR attract and retain the right talent at the right time. 

What role human resources plays in strategic planning

So how does HR become part of the broader business decision-making process? How do HR departments move from a reactive, service-oriented function to a more executive-level, strategic one? 

It starts with setting clear objectives for the department and strong values for the entire organization. Companies with documented values are less likely to ignore the real-life impact of any strategy shifts or big decisions. Consider these steps as you begin.

1. Align and set your HR goals

The main strategic role of HR is to create goals to help meet key business objectives. Goals may vary depending on the company’s strategic plan, but focusing on HR fundamentals is an excellent place to start. Here are some areas of HR most commonly affected by broader strategic business shifts. 

Organizational structure

The way companies are organized largely depends on their current strategic objectives and growth stages. If a company is in a high-growth stage, it may have a sales-driven culture with more sales employees and sales executives in decision-making roles. Mature companies with a retention-focused strategy may hire more customer success roles. 

See 7 types of organizational structures—along with pros and cons for each—to find one that fits your strategy.

Employee compensation

Maybe current business goals are more focused on employee retention or culture-building. Conversely, perhaps the company needs to cut costs. In either case, compensation structure may be an important consideration. When HR is aligned and informed on these goals, they can make strategic decisions to help the organization meet them. 

Employee development

Depending on the business goals and immediate initiatives, it may be necessary to train employees on new skill sets. Some employees may resist additional roles and responsibilities, so the role of HR in these situations is to both evangelize additional training and ensure teams are developed to keep pace with shifting needs. 

Performance reviews

Change management .

As a people-focused department, HR often has the best pulse on employee sentiment throughout the organization. HR departments can encourage employees to share their feedback on new business strategies or technology investments to ensure any changes or strategic shifts make sense from an operational perspective. 

2. Formulate specific actions to hit those goals

Once you’ve aligned and set goals, it’s time to develop action plans to execute your HR strategic vision. Focus on developing and improving processes for recruiting, hiring, employee development, and performance reviews. 

When you develop an action plan, you'll need to have a clear understanding of your organization’s current structure and identify any gaps or shortcomings in your processes. Where should you invest more in recruiting? If budgets are tight, what training or employee development programs could maximize the productivity and effectiveness of your existing talent?  The ability to visualize where every player fits into the larger organization can help HR departments align employees to business strategy, maximize efficiency, and see data in context to drive better decisions. Org charts and related visuals can help HR departments optimize organizational structure at every level and make better decisions, such as: 

• Assigning employees where their skills can make the most significant impact
• Making informed decisions about pay, equity, and performance
• Modeling current and future org structures to determine how best to scale your business

Does your organization needs to hire new talent to meet its strategic goals? See how to develop a staffing plan.

3. Track and measure performance

Historically, the role of HR has stayed in the “softer,” people-focused side of the business. However, people analytics are now the new HR, and HR departments are just as responsible for reporting on the performance of their initiatives as any other department. 

With human resource alignment around data-driven goals, HR leaders can ensure that decision-making not only aligns with strategic business objectives but also helps drive those goals. HR leaders can analyze data from sales, marketing, and accounting to break down departmental silos and better align with overall business goals.

According to a Bersin by Deloitte study, data-driven HR teams are four times more likely to be respected by their business counterparts, which can result in more input in strategic decision-making. By combining departmental data and HR data and visualizing it all in a single workspace, HR departments can better align their decisions to business strategy. Consider the ways these types of people analytics can impact the broader business:

Employee analytics

Measure the performance of all the HR initiatives in terms of cost, time, performance, then use a dashboard to track recruiting times, onboarding speed, employee satisfaction, and employee salaries. This data-driven approach to people management helps HR departments evaluate pay disparities, track employee retention, identify trends, and see critical employee metrics that will provide quick insights for better decision-making.  

All this gives you the chance to onboard new employees more efficiently, improve employee satisfaction, and reduce retention.

Talent analytics

Today, effective talent acquisition goes way beyond budget and headcount. HR departments can rely on algorithmic data to quickly sift through deep pools of qualified applicants to attract and retain top talent. 

Today, effective talent acquisition goes way beyond budget and headcount. HR departments can rely on algorithmic data to quickly sift through deep pools of qualified applicants to attract and retain top talent. This allows you to identify and attract high-quality employees and improve your workforce planning.  

Predictive analytics

Set up indicators to see when an employee is at risk of leaving the company. HR departments can use data to identify risk facts and predict employee churn and how this will affect the company. This leads to better retention and employee planning

Invest in better people planning 

Modern human resources departments manage much more than hiring, onboarding, and benefits. Aligning HR with business strategy can boost employee satisfaction and performance, ensure teams are aligned to help the business achieve its strategic objectives and increase their influence and decision-making power across the organization. 

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What Is HR Strategy? And How Can You Best Execute It?

HR strategy defines which HR and workforce practices and activities to pursue and improve to deliver outcomes that will drive enterprise business goals.

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How do you align HR strategy with business goals?

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 identify gaps between the current state and future needs of the organization.
• Develop HR goals to resolve gaps and establish criteria for measuring successful strategy execution.
• Communicate the HR strategy.

Successfully plan and execute your HR strategy

CHROs must break down business goals into strategic implications and define priorities that drive enterprise success and create business value.

• HR Strategy Execution
• Future of Work Trends
• Adapting HR Strategies
• Workforce Planning
• Critical Skills and Competencies
• HR Technology

Keep your strategy aligned as business needs change

Setting strategy is only the first step; turning it into a strategic HR plan that you successfully execute is far more challenging. The process fails for a number of reasons, including lack of visibility into business goals and inadequately defined measures for success. The volatile conditions in recent years also require measures to keep the strategy aligned as business needs change. Being programmatic helps to ensure that relevant strategy is executed effectively.

Align with business strategy.  Human resources strategy should always respond to business strategy; it also should align both upward (with business priorities) and downward (with functional priorities). In a world where talent is increasingly seen as an organizational priority, HR strategy should inform and influence business strategy. 

Establish goals as part of the strategy.  Consider what constitutes long-term success for your HR function and how to prioritize goals to support enterprise strategy. Perhaps create a prioritized list of initiatives and HR goals, and evaluate the gaps between the current state and your mission-critical initiatives. 

Set criteria for measuring successful strategy execution and adaptation.  Once you’ve developed goals, identify four to seven key performance measures that describe the current level of performance of the HR function. Make sure these measures are specific, quantifiable and clearly tied to the desired performance, and use those same indicators to measure performance in the future.

Craft a clear and concise statement that captures the core of the strategy and summarizes the key objectives on which the HR function will focus over the next year. This empowers your organization’s HR professionals and employees to contribute positively to enterprise objectives. Tailor the communication to each stakeholder group to provide employees with direction for their decision making.

Tackle the future of work as your organization sets strategic workforce and talent goals

It has always been critical for CHROs to prepare their organizations for the future of work (changes in how work gets done, influenced by technological, generational and social shifts). But the pandemic era has reinvented the future of work in new and unexpected ways — from increasing demands for a more human-centric employee value proposition and more seamless employee experience to tough-to-diagnose employee turnover.

Here are the 9 Future of Work Trends for 2023 :

• “Quiet hiring” offers new ways to snag in-demand talent
• Hybrid flexibility reaches the front lines
• Squeezed by competing leader and employee expectations, managers need support
• Pursuit of nontraditional candidates expands talent pipelines
• Healing pandemic trauma opens path to sustainable performance
• Organizations push DEI forward amid growing pushback
• Getting personal with employee support creates new data risks
• Algorithmic bias concerns lead to more transparency in recruiting tech
• Gen Z skills gaps reveal workforce-wide erosion of social skills

Given the growing volume of  future-of-work-reinvented trends , HR leaders need to shortlist the most important ones on which to focus when developing HR strategies. This requires a three-step trends analysis:

Identify : Recognize trends that could affect how, when and where work is done; who or what does work; or even what work means in the near future.

Interpret : Understand the relevance and implication of a  future of work trend to your organization.

Prioritize : Involve diverse stakeholders for an inclusive process of selecting key parameters. Ensure buy-in by prioritizing trends based on objective evaluation and a comprehensive analysis.

Navigate business challenges and create value

Adapting to the rapidly evolving COVID-19 situation has required C-suite leaders to regularly revisit and adapt their HR strategies and tactics to track changes in business strategy and ensure their organizations’ survival and growth through strategic human resources management.

The days when strategic planning was a once-a-year, set-it-and-forget exercise are over. Today’s rapidly changing business environment requires HR strategies to adapt. Gartner research shows:

Most organizations (66%) say the top barrier to effective strategic planning is the lack of integration with business needs.

Thirty-eight percent of HR leaders state that their HR strategic planning process is not aligned to the business strategic planning calendar, and changes are not triggered by shifts in the business plans.

• Fifty-eight percent of organizations point to the lack of relevant metrics to track progress as one of the top barriers to effective strategic planning.
• Only 28% of HR leaders report reviewing their strategies more than once per year, and only 12% change them more than once per year. 

To respond to changes and avoid wasting time on strategic planning, CHROs should identify external and internal triggers for strategic review and monitor them continuously. To do this:

Talk with relevant stakeholders to identify business-, management- and function-driven strategy triggers for your organization.

Use this preemptive identification of triggers to act quickly when they occur instead of falling behind the rest of the business.

Once triggers are established, proactively monitor business changes to ensure the function can meet business needs as efficiently as possible and improve overall business outcomes.

Plan and monitor the evolution of your organization

Workforce planning is the process by which HR leaders generate a forecast that projects the future workforce needs of their organizations. Especially now, workforce and business trends are impacting leaders’ expectations about workforce planning approaches and outcomes. 

For example, digital business transformation often changes critical skills needs, as well as planning and budgeting cycles. This is especially the case as HR adopts tactics more common to IT, such as agile methodologies and multidisciplinary fusion teams . HR’s increased use of technology solutions will similarly impact budgets and staffing to capitalize on innovations.

New ways of working demand new talent profiles across all business units. Strategic human resources management will incorporate more granular information about worker skills, capabilities, knowledge and experiences to respond to those needs.

Five types of workforce planning:

Workforce optimization : How do we optimize the assignment and distribution of tasks and processes to improve capacity utilization, productivity and other business outcomes?

Workforce scheduling optimization : How do we optimize workforce schedules to meet compliance and fair scheduling needs while ensuring that we can hit business targets?

Operational workforce planning : How do we plan for the right number and types of workforce resources to hit projected business targets and make sure we are executing on that plan?

Organization modeling and transformation management : How do we align resources to our new organization structure following a significant transformation (for instance, restructuring, merger and acquisition, divestiture and reduction in force)?

Strategic workforce planning : What are the workforce implications of our organization’s short- and long-term strategy? Will we have the right resources? If not, how could we get them?

Goals of workforce planning include:

Aligning talent planning with the strategic business plan

Identifying key workforce risks in the short, medium and long term

Creating a talent strategy to mitigate potential workforce risks

Mapping out critical skills needed in existing roles

Ensuring talent readiness for future business needs

Filling current and projected talent gaps

Recruiting future talent for the organization

Preventing attrition

It’s important for CHROs to make sure they and their HR leaders carve out time and resources to conduct workforce planning effectively, as few organizations have specific roles or teams dedicated to these efforts. Larger organizations might benefit from specialist full-time employees in a dedicated role.

Six key steps in strategic workforce planning :

• Prepare: Figure out the what, who, where and when.
• Understand business strategy: Identify strategic priorities, analyze emerging trends, translate priorities and trends into workforce capability needs, and prioritize workforce capabilities.
• Diagnose and analyze risks: Focus on strategy execution and prioritizing critical capabilities.
• Develop a high-level plan: Create a high-level roadmap to address capability risks.
• Prepare to execute: Document and communicate the workforce plan, and establish triggers for reevaluating it.
• Monitor the plan: Measure, adapt and evolve the plan.

Prioritize skills according to enterprise goals

As part of strategic workforce planning, it is essential for HR leaders to identify whether the organization has the capabilities and skills it needs to achieve its business goals. It’s also critical to incorporate plans to address skills needs directly into HR strategies.

Skills are a foundational element for managing the workforce within any industry. Improving and automating the detection and assessment of skills enables significantly greater organizational agility. Especially in times of uncertainty, or when competition is fierce, organizations with better data on skills can adapt more quickly by more accurately identifying which opportunities are feasible immediately and which require more investment over time.

Gartner research shows that headed into 2022, building critical skills and competencies was a priority for 59% of HR leaders — and the challenge remains complex. 

Many of today’s new and emerging skills are also difficult to obtain, so HR leaders first need a way to sense shifts in skills needs dynamically. This allows them to:

Anticipate needs as they occur, rather than trying to predict the future, and adapt to those shifts in an iterative, course-corrective way

Develop skills at the time of need by identifying and implementing skills accelerators — strategies that leverage existing resources (e.g., content, people and skills adjacencies) to develop new skills solutions at speed

Enable employees to make skills decisions dynamically, such as by creating channels for them and the organization to exchange skills information for mutually beneficial and flexible skills development 

Prioritizing skills according to enterprise goals will help HR leaders understand the key talent issues they will need to tackle.

Most organizations will need to deploy multiple talent strategies to acquire hard-to-find critical skills. This involves combining build, buy, borrow, rent and other strategies depending on the particular needs and circumstances.

All processes related to workforce planning use data and analytics intensively, making labor market intelligence and talent analytics (also known as HR analytics, workforce analytics and people analytics) critical for HR leaders to use in:

Forecasting the future workforce 

Creating long- and short-term sourcing plans

Pinpointing emerging roles and skills and identifying skills gaps

Analyzing competitor hiring trends

Discovering new competition for key talent

Understanding market disruptors

Drive business productivity with HR Technology

Pandemic-accelerated trends continue to transform how organizations acquire, develop, motivate, reward, serve and manage talent. Technology has emerged as an essential tool in responding to uncertainty and creating a more human-centric but adaptive and composable organization . HR technology, in shaping employee experience and driving business productivity, is therefore an increasingly critical component of successful HR strategy.

Increasingly, designers of human capital management (HCM) applications aim to improve the candidate, worker, learner and manager experiences, while acknowledging that most employees spend relatively little time using these applications. Many applications have a conversational user interface or use insights from behavioral science disciplines to engage users, influence behaviors and contribute to improvements in organizational culture. Continuous learning, listening, feedback and performance management are also becoming necessary to support hybrid and agile ways of working. HR technology shapes employee experience and impacts business productivity.

But amid continual hype around technology trends , HR leaders must understand their own needs and capabilities as they plan to add technologies within HR processes and existing applications. Aim to improve the employee experience by resisting one-size-fits-all solutions, and instead deploy flexible, human-centric HR processes and tools to meet diverse workforce needs.

The core functional pillars of HCM applications are:

Administrative HR: Core HR organizational and employee data management, employment life cycle processes, transactional employee and manager self-service benefits, and payroll administration

Talent management: Recruiting, onboarding, performance management, compensation allocation, career and succession planning, learning and development, and workforce planning

Workforce management: Time capture, absence management, scheduling, task and activity tracking, budgeting and forecasting

Integrated HR service management: Content delivery via a portal and knowledge management capabilities for employees and managers, which may include case management (ticketing/routing), business process management tools and digital document management

Innovation in the HCM technology market is driven by:

Technological advances, including artificial intelligence , augmented reality and virtual reality

Increased focus on skills management, as existing HR applications do not support current business requirements

Wider macro and social developments surrounding the nature and evolution of work practices and policies, such as the increasing importance of diversity, equity and inclusion , automation, remote working and the growth of the gig economy

Customer demand and extension requests, with functional gaps often being filled through an ecosystem of partners

To support ongoing pandemic responses and prepare for subsequent economic uncertainty, the following technologies have attracted renewed interest:

Internal talent marketplaces

Ontology-based skills graphs

Voice of employee

Learning experience platforms

Workforce planning and modeling

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Frequently asked questions

What is hr strategy.

Human resources (HR) strategy defines which HR and workforce practices and activities to pursue and improve to deliver outcomes that will drive enterprise business goals.

What is needed to execute your HR strategy?

• Align with business strategy.
• Establish goals as part of the strategy.
• Set criteria for measuring successful strategy execution and adaptation.

How does technology fit into HR strategy?

HR technology is a critical component of a successful HR strategy, as it plays an important role in shaping employee experience and driving business productivity.

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Strategic Human Resource Planning (SHRM): Guide to Human Resources & Management

Lucija Bakić

April 5, 2024

Strategic human resource planning (SHRM) is a proactive process that aligns human resource capabilities with long-term business goals.

In this guide, we’ll go through the basics of why this foward-thinking approach is so important for resource planning success . This includes its definition, the main steps, and best business practices. Key Takeaways

• Strategic HR management (SHRM) is a key step to ensuring that businesses are resilient and sustainable in the long run.
• Key steps of the process include: analyzing current capacity, forecasting needs, gap analysis, HR strategy implementation and monitoring.
• Many of the challenges of SHRM, such as resistance to change or tracking KPIs, can be addressed by implementing a modern ERP software solution .

What Is Strategic Human Resource Planning?

Strategic human resource planning is part of the broader human resource plan ning (HRP) strategy. This process targets long-term objectives, spanning from one to five years, and ensures that businesses have enough capacity to meet future needs. Strategic HR planning must be aligned with short-term resource planning, which handles daily concerns, such as employee schedules and workloads. Long-term strategies should also be aligned across departments, such as the finances or management, to ensure that initiatives contribute to shared organizational goals. See more : What Is Human Resource Planning ?

Why Businesses Need Strategic HRP

Some of the critical business questions that strategic HRP addresses can include:

• Will you have enough human resources for future needs?
• Which type of talent will you need (regarding skills, seniority, etc.)
• Which conflicts or gaps could appear in your business workflows?
• Do you have contingency plans for various risk factors?

Additionally, it can cover broader concerns, such as the need for organizational flexibility or continuous improvement. As an ongoing process, strategic management provides the perfect answer for businesses to tackle and address complex issues.

5 Main Steps of the Strategic HR Planning Process

The four main steps of strategic HRM include analyzing current capacity, needs forecasting, gap analysis, and strategy development and implementation.

1. Analyzing Current Capacity

This step involves analyzing both internal and external business circumstances that are important for future demand. Internal factors usually include details about your current employees, including their productivity, specific skills, availability, and engagement levels. External factors encompass market trends, economic conditions, and industry-specific demands that could influence future resource requirements. Learn more: Capacity Model Examples

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2. Needs Forecasting

Accurate needs forecasting is one of the most challenging parts of the developing workforce plans. It involves predicting the skills, overall capacity, and roles needed to keep a business relevant during changing market conditions and technological advancements. Therefore, it requires a thorough understanding of your human capital and the industry. Needs forecasting includes:

• Supply forecasting: Assesses the current workforce and external labor market trends to identify whether there will be an excess or shortage of talent in the future.
• Demand forecasting: Focuses more on demand, i.e., quantifying future labor requirements to ensure that business goals will be met.

3. Gap Analysis

Gap analysis takes the first two steps of the human resource management process to pinpoint specific areas of improvement — it compares the current workforce capabilities with future needs to identify conflicts or discrepancies. For example, a retail chain looking to expand its online presence might consider its current capacity, and realize that it has enough technical roles to go into e-commerce. However, by conducting needs forecasting of the competitors, it may recognize the need for marketing professionals skilled in SEO or digital marketing to drive more of their customer base to their website.

4. Strategy Development

The next step involves developing specific strategies to address resource conflicts and help your business reach its goals. Some of these may include:

• Talent management strategies can be developed to address issues with workforce management. It can include processes such as recruiting, retaining, and developing employees.
• Employee engagement strategies are usually developed to tackle low morale and productivity. Organizational strategies might include improving collaboration, manager-to-employee feedback, or other capacity building examples .
• Development programs are a specific part of talent management, aimed to address skill gaps through upskilling or reskilling employees. Strategies may include mentoring by senior employees, workshops, or other training opportunities.
• Succession planning is utilized to mitigate the risk of key positions becoming vacant unexpectedly. It usually involves identifying high-risk positions and then selecting and preparing potential employees to fill them in the future.

Learn more about workload management .

5. Implementation and Monitoring

To ensure that your strategies are effective across time, it’s necessary to closely monitor progress, usually by analyzing various key capacity performance indicators (KPIs). Setting desired targets can be a good way of determining if you’re on the right track — for example, an agency with low productivity might set its desired utilization rates at 80%.

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However, it’s equally important to keep in mind that some benefits of successful ERP can be difficult to quantify or determine in a short amount of time. This can include better workplace culture or increased employee satisfaction. See more: ERP benefits for businesses

Documenting Your Strategic HR Plan

The strategic HR document should include an outline of the organization’s human resource objectives, the strategies for achieving them, and the steps for implementation. Putting your initiatives into writing can help drive alignment across various teams and ensure that everything is progressing according to plan.

How and Where to Create Documentation?

According to research by Forrester, 97% of organizations have minimal or no digitally documented processes. While traditional documentation can be better than no documentation, consider the benefits of automating information gathering and sharing with ERP software solutions .

We used to have a project management tool, a time tracking tool, a support tool, a way we handled opportunities and sales-driven processes. Those were all separate tools that we had, and it wasn’t good. It also meant that all that data was being lost every time we switched between tools , or we had to find a way to normalize the data between them. And now, the fact that it’s all in one, it’s really a game changer.

BRYAN CASLER, VICE PRESIDENT OF DIGITAL STRATEGY AT 4SITE INTERACTIVE STUDIOS

For example, the resource and agency management tool Productive can help you automate the work scheduling process with its resource planning model template, provide real-time reporting on utilization rates, manage employee availability and time off, and more. Another great feature you can consider is collaborative documentation with AI content creation. This can help you keep all essential project data on a single platform.  

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Challenges & Best Practices for Strategic HRP

Some of the main challenges of strategic HRP include ensuring buy-in at all organizational levels, handling resistance to change, efficiently monitoring performance, and fostering continuous improvement.

Getting Business-Wide Buy-In

Organizational changes need to be effected from the top to the ground-level staff. Getting buy-in for new initiatives from leaders and other key stakeholders is essential to get the most out of your HRP initiatives. Silos can cause issues for adoption and cause miscommunications across teams, where one part of the company may not be aware of the changes or understand their role in implementation.

Overcoming Resistance to Change

According to Deloitte, some of the biggest roadblocks to new initiatives include resistance to change (82%) and inadequate sponsorship (72%). Both can be addressed with clear communication and transparency, so that all employees understand why and how initiatives are being implemented. Asigning change ambassadors within teams can facilitate a smoother transition. Learn more: Efficient resource management for multiple projects

Reviewing and Analyzing Progress

Good initiatives can stumble and fall if there’s no way to measure actual performance. Selecting the right key performance indicators and implementing a way to analyze them is important for the success of HRP initiatives. For example, a consulting firm that has issues with turnover might implement additional benefits or hire more staff to balance workloads — the KPIs to be monitored would be employee satisfaction, the utilization rate , and the attrition rate.

Productive can forecast KPIs for professional services agencies, like revenue and profit margins

Incremental Changes and Continuous Innovation

Another reason why monitoring KPIs is so important is that incremental but timely improvements are always better than extensive changes. Smaller adjustments allow businesses to remain flexible and agile to adapt to market demands and internal changes without causing disruptions.

The Role of Analytics & HRP Software

Finally, most, if not all challenges mentioned above can be streamlined with the right tools for resource planning and HR management. The benefits of using such tools include:

• Improved timeline estimation (60%)
• More effective use of resources (55%)
• Enhanced team communication (49%)
• More accurate metrics (38%)

There are many potential options on the market, but consider using a comprehensive software for your strategic planning. These types of solutions can give you a competitive advantage with benefits such as centralized workflows, unified data, and reduced costs for tech stacks.

Get the most out of your agency’s resources with Productive

As an all-in-one solution tailored to agencies of all shapes and sizes, Productive can help you manage both day-to-day resource management and create strategic plans. Key features include: resource allocation, employee performance management, real-time reporting, project budgeting, agency workflow automations, and much more. Learn more about Productive by booking a demo today.

What are the 4 HR strategies?

The 4 HR strategies include talent acquisition and retention, learning and development, performance management, and workforce planning and forecasting (check out our workforce planning definition ). Each strategy addresses a part of the human resource planning process and contributes to achieving organizational success.

What is strategic resource planning?

Strategic resource planning is a part of human resource management that examines the capacity and needs of your future workforce for sustainable business growth. It’s focused on ensuring that your business has the critical skills for meeting business goals over a long period of time.

What are the 5 steps in human resource planning?

The 5 main steps in human resource planning include: analyzing current HR availability, forecasting future needs, gap analysis, developing strategies for human resource management, and implementing and monitoring your initiatives.

What is SHRM and its importance?

SHRM or strategic human resources management is a forward-looking approach to managing human resources and aligning HR practices with organizational goals. It allows businesses to remain competitive, sustainable, and flexible in dynamic market conditions.

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From Compliance to Talent Management: The 15 Essential HR Responsibilities

The roles and responsibilities of an HR professional 

Strategic role: Strategic planning and business alignment 

1. strategic planning responsibilities , 2. alignment to business goals, compliance requirements: legal, compliance, and administrative responsibilities, 3. compliance responsibilities, 4. administrative responsibilities, growing the business: workforce planning, recruitment, and selection responsibilities, 5. workforce planning responsibilities, 6. recruitment and selection responsibilities, employee development: onboarding, training and development responsibilities, 7. onboarding responsibilities, 8. training and development responsibilities, talent management: employee experience, engagement, and performance, 9. employee experience responsibilities, 10. employee engagement responsibilities, 11. performance management, preparing for the future: deib, succession planning, hr digital and new work models , 12. deib responsibilities , 13. digital hr responsibilities, 14. new work models implementation, 15. succession planning, developing future-proof hr skills, key takeaways.

• Strategic role: HR plays a crucial role in strategic planning and business alignment
• Compliance : HR ensures compliance with laws, regulations, and administrative responsibilities
• Growing the business: HR fulfills workforce planning, recruitment, and selection responsibilities
• Employee development: HR nurtures employees through onboarding, training, and development programs
• Talent management: HR ensures talent management through employee experience, engagement, and performance
• Preparing for the future: HR spearheads initiatives for diversity, equity, inclusion, and belonging, digitalization, and new work models
• Developing future skills: HR professionals must develop future-proof skills, including digital literacy, people analytics, strategic thinking, and change management.

Catherine Scott

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Maximizing HR Impact: Your Strategic HRM Plan Explained

What is a strategic HRM plan?

Why do organizations need a strategic hrm plan, stronger employee engagement, increased manager efficiency, better alignment between hr and business goals, greater business impact, mission, vision, and values statement, workforce analysis, skills inventory, job analysis and design, employee engagement and communication, performance management, training and development, succession planning, define hr objectives and align with business goals, analyze current hr practices and processes, identify areas for improvement and implement changes, monitor and evaluate the impact of your strategic hrm plan, the future of strategic hrm planning, amplify hr’s value with a strategic hrm plan .

Today’s HR leaders are under tremendous pressure to optimize their workforces for today’s demands while building agility for the future. To bring this new model to life, you need a strategic HRM plan that outlines how people will find their full potential within your organization. 

According to a recent report from the HR Research Institute , only 8% of business leaders strongly agree that their workforce and business are prepared to adapt to changing work trends, while 42% don’t agree at all. Preparing your workforce to meet business needs today and in the future requires more strategic use of your talent resources — and a modern HRM plan can help you get there.

Learn more about what a comprehensive strategic HRM plan looks like, the benefits of a modern one, and steps to take to strengthen yours.

A strategic HRM plan is a comprehensive document outlining an organization’s HR goals, objectives, and strategies. Such a plan compares business goals against the people resources needed to accomplish them, including the skills, abilities, traits, talents, and competencies housed within your workforce. 

The plan should include a detailed overview of the organization’s HR goals and how they link to business objectives. It should also analyze the current environment, review applicable policies and procedures, and offer a road map for implementing and managing HRM initiatives. Additionally, the plan should address how the organization will measure and track progress.

Strategic HRM planning lives at a higher level than operational HR planning, which takes a more tactical approach. Strategic HRM planning sets aspirational, ambitious goals based on the company’s vision. Generally, a strategic HRM plan guides operational HR planning, which builds the long-term plan into daily operations and processes.

A strategic HRM plan details the resources needed by the business — including by departments and teams — to achieve objectives. It also specifies what actions to take to identify and fill gaps. Without an HRM plan, an organization might begin an ambitious project only to discover halfway through that the workforce doesn’t have the skills needed to deliver.

Ultimately, an HRM plan helps businesses understand what human resources they have and how to maximize their value. These plans balance available resources against demand and factor in upcoming initiatives and goals to ensure the right skills, abilities, and competencies are available when needed.

4 benefits of strategic HRM planning

HRM planning provides a line of sight into your workforce’s strengths and weaknesses and outlines your plans to sustainably develop your people in line with business objectives. Strategically deploying people where they’ll have the greatest impact produces several benefits for the workforce and the business.

Strategic HRM planning improves employee engagement by creating an inherently motivating environment for employees. When all projects and teams are adequately staffed, and people have the skills and abilities they need to succeed, they work more effectively. Doing better work helps employees feel a greater sense of progress and satisfaction, which often drives higher engagement.

An effective strategic HRM plan takes each employee’s strongest skills into account. To maximize value, it places workers in situations where they do their best work, which can be especially motivating. Moreover, people tend to enjoy doing work they’re good at, which supports higher employee satisfaction and engagement.

Strategic HRM planning can make a manager’s job easier by matching people’s skill sets with job assignments that make sense. A strong job fit helps people contribute to the team’s goals. When everyone is engaged and empowered to do their best work, the entire team’s efficiency increases.

A strategic HRM plan also serves as a tool for training managers to learn to allocate their team resources more effectively. By seeing the skills, abilities, and competencies available on their team, managers learn how to delegate tasks effectively over time. 

Strategic HRM planning is a living example of how the HR teams’ goals connect with business goals. These plans demonstrate how you’ll overcome HR challenges while keeping strategic goals top of mind. They outline how HR leaders will deploy people resources strategically to best support what the business wants to accomplish. 

If one of your business goals is to improve product quality, for example, your HRM plan may include developing a new training program for product testers.

Strategic HRM planning helps HR leaders (and other executives) more easily grasp the landscape ‌of the organization’s available people resources. This knowledge informs decisions around reallocating talent, improving operational efficiency, and increasing customer satisfaction.

8 key elements of a strategic HRM plan

Every strategic HRM plan differs based on the needs of the business. As you create a strategic HR plan, consider these eight essential elements.

Your organization’s mission statement provides a framework for decision-making and goal-setting. Your vision statement states long-term goals at a high level and can be a guide for setting objectives. 

These statements provide a North Star for HRM planning. For example, your mission and vision statement should already inform how you recruit, train, and build company culture. By looking at them through a strategic lens, these statements help you identify the skills, values, and traits you need to achieve business goals. 

A workforce analysis is a crucial exercise for understanding your current state. Going through this process means looking at the existing workforce’s skills, knowledge, and experience and the projected business needs. The analysis helps identify gaps between current and future workforce requirements and guides recruitment, training, retention, and succession planning decisions. 

Equipped with this information, you can make more informed decisions about allocating resources in the near and long term.

Skills inventories allow you to identify and assess workforce competencies, providing a better understanding of your human resources. Use this information to develop strategies tailored to the strengths and weaknesses of your workforce. 

For example, if the skills inventory reveals a lack of technical expertise in a certain area, you can create training programs to fill the gap or emphasize hiring people with this skill set.

Job analysis exercises affect strategic HRM planning by providing valuable information about organizational staffing. This process identifies each job’s duties, tasks, responsibilities, and required skills and knowledge. When HR leaders understand job architectures, they can properly update job descriptions.

Like any strategy, an HRM plan needs to be communicated to managers and front-line employees. Make sure they understand their responsibilities and the potential benefits. 

Some employees might worry that an HRM plan reduces their value to what the business can get from them. But‌ strategic HRM planning allows team members to exercise their strongest talents and develop new ones. Emphasize communication that explains how HRM planning helps employees reach their full potential. 

Performance management is a framework for aligning individual goals and objectives with those of the organization. This provides strategic value by guaranteeing that everyone in the company is working to achieve aligned goals.

The data gathered from performance management software and processes helps HR identify skill gaps, evaluate workforce performance and career aspirations, and gauge progress toward goals. You can use this data to refine existing goals and inform performance improvement plans.

Training and employee development are important components of a strategic HRM plan. Training keeps employees up to date with the latest industry trends, technology, and procedures, which improves operations and efficiency. 

Employee development is more strategic — increasing employee skills and expertise for the long term. This approach helps team members explore their career path, including the education they need to advance. 

Succession planning is the process of identifying and developing potential leaders to fill critical positions. Strategic HRM planning recognizes this importance by identifying what roles are most important to fill quickly — and which roles are at risk of not having a successor ready.

Succession plans help companies ensure that internal candidates can fill any key vacancy with the skills and knowledge to maintain business continuity and achieve strategic objectives.

4 steps for strategic HRM planning

Like any HR initiative, you need a sound approach. Here are four steps for creating an HRM plan, with examples, at your organization.

The HRM plan always takes its cue from the larger business plan. To create a strategic HRM plan, start by evaluating the organization’s goals and objectives. Next, assess the results of your workforce analysis and skills inventory and compare them against the needs of the business plan. Identify places where resources are low, and draw up plans to close the gaps.

Work with executive-level peers to identify HR-specific needs that will help them execute the business plan. At this stage, flag any strategic actions the organization lacks the resources to accomplish. 

Your HRM plan, for example, comes into play if the chief risk officer wants to adopt new risk management software within the quarter. You might push back against such a tight timeline if you lack the capacity to gain buy-in, communicate the transition plan, and train people on new processes.

Distill your HR objectives into a measurable, achievable HRM plan. Break down the plan’s goals into objectives and key results, and assign accountability and ownership for each smaller objective to ensure they’re accomplished.

Don’t assume your existing processes make sense for tomorrow’s business goals. Start by evaluating HR policies, procedures, and systems. Are they the right fit for producing the outcomes you need? How could they be improved, refined, or redefined?

If the business is focused on long-term continuity, for example, it needs a more resilient workforce. For HR leaders, that means they might look at the organization’s traditionally linear career paths. They might discover knowledge silos and higher turnover among employees who don’t see a path upward. A strategic HRM plan that emphasizes open and lateral career paths can break down silos so everyone has better visibility into other parts of the business and help employees see a future within the organization — both of which contribute to business continuity.

One of the most important steps of HRM planning is plotting the actions you’ll take to close resource gaps. Doing so often requires changing processes or workflows. Include a timeline for implementing changes and a detailed budget.

For example, a business traditionally hires contractors where your workforce lacks the requisite skill sets. But as the business evolves, you see an opportunity to build out those capabilities in-house — either by upskilling employees or hiring from the outside. A strategic HRM plan lays out the reasoning for this shift in spending, hiring, and structure.

All strategic HR plans need to be monitored. If the plan isn’t progressing or doing so quickly enough, take a step back to assess why. 

Perhaps the HRM plan intended to fill skills gaps through external recruiting and hiring. But if those skills aren’t readily available or come at a premium cost, you might have to pivot to internal skills development.

The future of strategic HRM planning increasingly intersects with technology, analytics, and data. Companies want data-driven approaches to everything in business, including talent. 

Automation and artificial intelligence are already commonplace in transactional areas of HR, such as recruitment, training, and onboarding. These technologies will gain ground in more strategic areas, such as interpreting key HR metrics . The more you understand your HR data, the more effectively you can deploy talent to support the business.

Companies are also looking for a more holistic approach to HR management and greater emphasis on employee engagement and well-being. Employees are reprioritizing their responsibilities, increasingly demanding flexibility and better benefits. Strategic HRM plans need to respond to these trends, both in terms of organizational design and the allocation of people resources.

The importance of having a strategic HRM plan can’t be overstated. Proactive resource planning by HR leaders ensures that the business has the skills, abilities, and competencies needed to achieve strategic objectives. 

HR leaders increasingly have a seat at the table. Your HRM plan is how you showcase your value, build a successful and sustainable workforce, and help the organization reap the rewards.

Want to learn more about strategic HR?

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How HR Can Influence Organizational Strategy

​At many organizations, senior executives create a strategic plan, only to have it sit on a shelf and gather dust. That leaves the organization investing time and resources in all the wrong places.

At other workplaces, there may be no strategic plan at all.

HR professionals can take a key role in shaping their organization's strategy and contributing to its future success because they know the workforce better than most, according to Michael Wilkinson, managing director of Leadership Strategies Inc. in Atlanta.

"We need to be at the table when strategy is designed. We need to be at the table when strategy is implemented," said Wilkinson, who spoke at a concurrent session at the Society for Human Resource Management 2016 Annual Conference & Exposition in Washington, D.C., on June 21. "But we have to prove we deserve that seat."

HR professionals can influence their organization's strategy by:

• Promoting strategy development at the organizational, division and department levels. "We should be asking the strategic questions at every level of the organization . : Where are we going? What do we need to be doing to get there?" Wilkinson said.
• Providing strategy development training and resources to the organization. "We have to equip our people to do their work," he said.
• Modeling strategy by developing a strategic plan for the HR department to demonstrate its value.

As a first step in developing a strategic plan, assess where the organization is today. Frequently, senior leaders have a great vision, but they don't have a clear and accurate picture of the organization's current status. They may see only the strengths or only the weaknesses, Wilkinson said.

Then, have executives create a shared vision of what they hope the organization will look like in the future. Encourage senior leaders with differing visions to debate once where the organization is going but then to agree to go in the same direction.

Another challenge is understanding what is critical to the organization's success. It may not always be obvious. What key conditions must be created to help the organization succeed? What are the barriers to that?

Next, identify the "drivers" within your organization. They are the people who can get things done.

"The drivers have to break through the barriers to get where we want to be," he said.

Finally, determine how the organization will monitor and measure its progress toward achieving its objectives.

Many strategic plans fail because organizations never get around to the monitoring phase, Wilkinson said. Some make the mistake of measuring activities instead of results. For example, an organization might say its objective is to hold two membership drives a year without stating how many new members it would like to recruit.

Another common mistake organizations make is confusing goals and objectives, he said.

A goal is a broad, long-term aim that defines the accomplishment of the mission, he explained, while an objective is the specific, quantifiable, realistic target that can help you measure whether you're accomplishing the goal.

Other top reasons strategic plans fail include inadequate planning and failing to include key people in the planning, he said.

Dori Meinert is senior writer/editor for HR Magazine.

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• Human Resource Planning (HRP)
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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. HR 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 companies use to maintain a steady supply of skilled employees while avoiding staffing shortages or surpluses.
• HRP needs to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term.
• Having a good HRP strategy in place can mean productivity and profitability for a company.
• HRP is made harder by the fact that not everything can be predicted.
• 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?

Employees are a key part of any business. Without a strong workforce, income will likely dry up and the company will go out of business. HRP is designed to prevent this from happening. Its mission is to identify current and future hiring and training needs.

HRP 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.

HRP needs to be flexible enough to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term. 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
• Keep employees motivated
• Cope with absences and deal with conflicts
• Succession planning
• Promote employees or let some of them go
• Keep tabs on trends that could impact future supply and demand

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.

The goal of HR planning is to have the optimal number of staff to make the most money for the company. Staying on top of this and achieving effective HRP can ensure that the company:

• Gets the best out of current employees and increases their value
• Has a competitive advantage in its industry
• Is better placed to respond to challenges and adapt to changes

Challenges of Human Resource Planning (HRP)

HRP offers many advantages but it isn't without challenges. The future isn't easy to predict. A technology breakthrough can change everything, as can a black swan event. Issues such as employees getting sick and wealthier or more prestigious competitors poaching staff can also cause serious problems.

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 HRP and will require HR departments to use new methods and tools to recruit, train, and retain workers.

Companies can set themselves up to better deal with these types of challenges if they are adaptable and continuously keep tabs on the world around them. The more prepared a company is for an event that impacts its human resources, the better it can handle and potentially take advantage of it.

HRP strategies must frequently be revised to match not only the company's changing needs but also external changes.

There's also the challenge of HRP being time consuming and potentially costly. HRP offers benefits but it can take a while to reap them.

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. However, like most important investments, it can take a while for these efforts to pay off. In the beginning, HRP will be a drag on profits.

What Are the Four Steps to Human Resource Planning (HRP)?

There are four general, broad steps involved in the HRP 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 its needs.

1. Analyzing Labor Supply

The first step of HRP 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.

2. Forecasting Labor Demand

The second step requires the company to outline the future of its workforce. Here, the HR department can consider anything that factors into the future needs of the company, including promotions, retirements, layoffs, and transfers. 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.

3. 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?

4. 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.

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. HRP 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. K. Prashanthi. " Human Resource Planning-An Analytical Study ," Page 64.

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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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What Is Human Resources? The Ultimate Guide

Updated: Jun 12, 2024, 11:42am

Table of Contents

Human resources defined, the role of human resources, internal vs. external human resources, bottom line, frequently asked questions (faqs).

Human resources refers to both the people working for an organization and the department responsible for managing the life cycle of each employee. But if someone mentions human resources in a work setting, more often than not they are referring to the human resources (HR) department.

In this article we will talk about the crucial role played by HR in an organization as well as whether you should have an internal or external HR team.

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Human resources is responsible for recruiting, onboarding, training and managing an employee from their job application to final severance. This end-to-end management of employees includes strategies for payroll and benefits administration, upskilling, establishing positive workplace culture, optimizing employee productivity, handling employer-employee relationships, employee termination and more.

Human resource management should not be confused with workforce management , which focuses on strategic planning for the direction of an organization’s growth and not on the day-to-day supervision of employees.

Every business wants to do right by its employees, but business considerations often throw a wrench into this good intention. The human resources department is there to formulate policies that strike a balance between employer and employee interests.

The modern human resources team has moved beyond the legacy responsibilities of payroll and benefits administration, severance handling and postretirement relations. Now it encompasses designing strategies to acquire the right employees, ensure employee retention by addressing their challenges, manage employee separation, handle compliance and legal issues, and stay on top of the HR industry trends.

• Recruitment

Human resources is responsible for filling the vacant positions within an organization. The recruitment process typically includes creating and posting job descriptions, accepting applications, shortlisting candidates, organizing interviews, hiring and onboarding. Each of these recruitment steps involves designing the workflow and executing it in a way that ensures they hire the best candidates. Many teams rely on recruitment software to help automate these processes.

Compensation and benefits administration

Handling employee compensation and benefits is an important part of human resources responsibilities. Besides payroll management , it includes travel and expenses, paid vacation, sick leaves, retirement, health and other benefits.

Talent Management

Recruitment is an expensive process and therefore it is important to ensure that the new hires remain with the organization for as long as possible. Employee training and development, whether it is a new hire or an old hand, in consultation with the managers is the responsibility of HR.

To this end, HR departments use talent management to design various employee motivation, loyalty and retention programs. Career development, mentoring, succession planning and interdepartmental transfers are crucial ways of ensuring employee retention.

Other Responsibilities

Covering everything an HR department handles would take a full article of its own, but here are a few more of the most common responsibilities of a modern-day human resources department:

• Designing workplace policies: HR is responsible not only for hiring people but also for ensuring that the workplace is conducive to optimal functioning. They ensure this by designing workplace policies in consultation with senior management.
• Legal compliance: The human resources department must be aware of the latest laws that affect the employees as well as the organization.
• Employer-employee relationship: The human resources department is responsible for managing people in a way that the relationship between the employer and the employee remains cordial at all times. This becomes especially important for manufacturing units where labor laws come into play as well.
• External factors: HR also needs to keep track of external factors that are not in its control but definitely affect the organization and its employees. For instance, the use of technology, global developments, social media networking, the rising popularity of hybrid work models, etc.
• Diversity, equity and inclusion (DEI): If you want your business to succeed, you need to embrace policies and programs that promote DEI. Designing strong recruitment policies is a good place to start but HR must carry this forward by helping all stakeholders develop a DEI mindset.

Depending upon the size and needs of your business, you can have an internal human resources department or outsource it. However, keep in mind that only some parts of human resources, such as payroll, benefits administration, recruitment, onboarding, legal compliances, etc., should be outsourced. Designing strategies to manage human resources should be kept internal to the organization.

External human resources can be cost-effective for small teams as you get better capabilities and easier access to experts. However, you still need to have a small human resources team of one to two people internally to help design the necessary policies and ensure that the external human resources team is meeting all your specifications.

Ultimately, whether you employ an internal human resources team or an external one depends upon your needs and budget.

Human capital is the most important resource of any organization and it must be treated with love, care and respect. As an employer, it’s your responsibility to put in place a human resources team that helps you attract the best talent in the industry, keeps them satisfied and ensures an excellent relationship that results in driving business growth.

What are the best HR software solutions for small businesses?

There are many HR software solutions available in the market, but some of the most popular ones are BambooHR , Gusto , Justworks , Namely and ADP Run .

What are the major functions of HR?

A human resources department holds many roles but these are seven of its major functions:

• Workforce training and development
• Payroll and taxes administration
• Benefits administration
• Employee-employer relations
• Employee severance management
• Regulatory compliances

What is human resource management (HRM)?

The strategic model for recruiting, onboarding, training and managing an employee from their job application to severance is called human resource management. It includes designing policies to enhance company culture , employee productivity and the overall employer-employee relationship.

How do I ensure HR compliance?

Proper documentation of policies, thorough training and following HR news for changing regulations can help HR leaders stay up to date on their responsibilities and help all employees follow policies and regulations and avoid misconduct.

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The role of HR in strategic planning

It's not just a place to go when troubles arise: Human Resources is a vital department within companies, but too often they are misunderstood and underutilized.

Thirty years ago, we had the "personnel department." It took care of pretty much everything relating to people in the workplace. Then about twenty years ago we had split - techo-terms became the rage (remember "domestic engineers?) and we realized that we were dealing "human resources," and so a new department was born. But over the past fifteen-to-twenty years, HR has gone through another split: Human Resource Management, and Human Resource Development. Yes, the two have a bit of overlap, but agreement among experts in the field is that the two branches of HR can help an organization accomplish its strategic goals - if only top management would let them.

First a bit of clarification:

Human Resource Management is commonplace in most larger companies. According to Richard Chang, author of The Passion Plan at Work , HRM focuses mainly on HR Research and Information Systems, Union/Labor Relations, Employee Assistance, and Employee Compensation/Benefits.

Human Resource Development, according to Chang, includes Career Development (helping individuals align their career planning), Organizational Development (helping groups initiate and manage change), and Training and Development (designing / developing, and delivering training to ensure people are equipped to do their jobs).

Where the two tend to overlap are Selection and Staffing, Organizational/Job Design, Human Resource Planning, and Performance Management System.

What's important to note about HR overall is that too often it is omitted from participation in key strategic decisions. This mistake can be quite detrimental to effectively achieving strategic goals. Here are some reasons to include HR in the planning process (as well as in meetings of top management):

1. Selection and Staffing: When goals are set, it's people who work to fulfill those goals. Having the right people in the right places is vital, and if new hiring is to occur, finding the right people is equally vital. HR folks are usually on top of the employee market, and decisions will be more effective if HR knows firsthand the clear direction of the company. They can immediately speak to any potential conflicts between what a company wants and what is truly realistic in HR terms, thus helping ensure the plans are workable right from the start.

2. Organizational Development: Strategic planning often encompasses change in workplace systems or processes. Although individual departments are likely aware of the status of their own departments, HR folks are often aware of group initiatives and changes that has occurred company-wide. Accordingly, they will be able to speak to OD issues with unique insights on how changes may impact systems and processes already in place.

3. Training & Development: Research shows that only 20% of the workforce has the skills that will be required ten years from now. That means training and development are guaranteed to be needed at some point of the strategic growth process. Again, HRD folks will be able to speak instantly to any issues, and possibly provide input that could help a company achieve its goals faster.

More reasons exits, but we'll stop there.

The main point is that HR is often thought of as the place to go for employee conflict, employee assistance, or compliance issues. But HR is much more than that, and top management would do themselves and their organizations well if they included HRM and HRD professionals in their strategic planning. There is nothing to lose by doing so, and plenty to gain.

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HR’s Role in Business Continuity Planning

Human resources professionals have long played a valuable role in business continuity planning and execution through crisis and uncertainty, and this pandemic has been no different. We’re in a unique position to bring together people from throughout the organization under a common mission.

Here are a few of the lessons I learned while facilitating continuity at my organization during this crisis.

Embrace Agile Principles

When hit by the pandemic in early March, we mobilized to remote work in a matter of days while maintaining service to our customers. Business continuity planning and execution is a team effort, so we gathered a cross-functional task force of leaders and key contributors across the organization to share their ideas and perspectives and accomplish our goal.

Having these diverse voices gathered in one place and working toward the same goal strengthened our response.

From a leadership perspective, I was amazed by how quickly we got stuff done while keeping our customers and employees top of mind. Somewhat unintentionally, we found ourselves incorporating many of the Agile concepts for this business continuity challenge. Our team has broad skill sets, and short, frequent touchpoints allowed us to effectively self-manage as we worked toward our shared goals. Team members enthusiastically took on new roles, embracing the opportunities for building cross-learning and cross-collaboration capabilities. These kinds of experiences help develop leaders who take a broader view, which will have an enduring impact on future success. The resiliency we’ve developed means we’re prepared  no matter what comes next.

Lean On Your Core Values

Believe, Learn, Solve, Respect and Grow are the five core values we live by. We reintroduced our core values  about a year and a half ago, before the pandemic. Our shared value system was solidly in place, and it provided a strong foundation for business continuity during the crisis. 

Our strong values drove the real-world actions of our employees. For example, our “Solve” value encourages us to go beyond identifying problems to seek solutions and “Respect” encourages us to support each other and embrace teamwork. So, when it came to making decisions for the business, we used these shared values, allowing the workforce to adapt quickly. If your values aren’t driving your actions and decisions now, then it might be time to reassess them.

Share Your Perspective

HR professionals can play a vital role in meeting the needs of organizations during times of crisis. Don’t let organizational bureaucracy prevent you from sharing your ideas and expertise around risk management  and crisis response. Your message is critically important, and you have a valuable perspective that many people at your organization simply don’t have. 

Be confident in your ability to say what needs to be said to your organization’s leaders. Once you use your voice to prove your value, leaders will come to you for input on business continuity planning during future crises.

Speaking of adding value, we discovered that our cross-functional team was beneficial during times of social and political unrest, too, and we intend to continue leveraging their pooled expertise moving forward. Facilitating this team was one of HR’s most significant contributions to the business. I can see this task force’s future as cross-organizational, fast-moving thinking partners as we deal with whatever the next crisis is. We’re strong — and we’re ready.

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The Role HR takes in Business Planning

By: Adam | Published on: Mar 29, 2019 | Categories: Featured , HR Strategy | 0 comments

HR and Business Planning

What is a HR Business Plan?

A HR Business Plan defines how a company is going to operate and develop over a given period of time.

It focuses on the elements of how to make a profit and identifies the risks which may prevent this. But don’t be fooled into thinking this is a one off process…. HR Business planning is ongoing!

This includes constant tweaks and changes depending on what is working and what isn’t. It is also the anticipation and preparation for changes that might need implementing as the plan progresses.

That change may come about through many things. Some examples you might experience are:

• Altering markets
• The need for new technology and product development
• Global pandemics!

Failing to plan is not an option!

60% of start-ups will fail within their first five years. The reason?

Most of their time is concentrated on their product and what’s immediately in front of them ( the urgent ).

They don’t place enough importance on what’s going on around them. Or how they should be ready to respond ( the important ).

What’s going on around them can be regarding an internal market as well as an external one.

The HR Business Plan

The Business Plan is a dynamic document that should ask challenging questions.

It should be reviewed on a regular basis with the company’s strategic objectives and goals in mind.

Long term objective and goals will be under constant scrutiny. This is to ensure that they are on target, remain relevant in a fluctuating market and are culturally robust.

Good HR business planning is about making smart choices in order to sustain the strategic vision.

But one significant reason for failure is that the business concentrates on a set of goal which is too narrow. Examples of this include:

• Product or service based

The key omission is often planning for the people who are going to make the business succeed.

The Role of HR Business Planning

This is where HR plays a vital role. It should work alongside key senior staff to ensure that plans include areas of HR involvement and participation.

Aligning the HR function with the business plan will ensure that the full potential of staff members is realised.

Visions and Values

In the business planning process, HR ensures that executive focus includes the heart and core of the business. This is its vision and values.

The HR professional position aligns the business’ vision and values as a solid foundation for strategy. This guarantees they are highlighted in strategy discussions!

It also ensures that it is the values of the business that drives people’s motivations and behaviours.

The HR professional demonstrates the importance of business culture. They also highlight how a dysfunctional culture can disable even the best of strategies.

HR is the only function with a business-wide view of employee performance, productivity and effectiveness.

Financial goals are usually the top priority, sometimes being the only priority. However, the HR professional can demonstrate how the attraction, retention and use of the most talented people can enhance secure financial rewards.

This is particularly when centred around a culture that is aligned to a progressive vision and strategy. Naturally, this is when addressed up front in the HR business plan.

Three Key Elements of HR in the Planning Process

1. resource planning.

Once the business goals are set, it is people involved who will carry them out. So, having the right people in the right roles at the right time is key.

A resource plan is the people equivalent of a financial forecast. Consider these questions:

• When will the business require more people?
• Of what type and skill-set?
• Where will you find them and how will you recruit them?
• How long before you need them do you need to commence your recruitment activities to ensure they are in place, inducted, fully trained and ready to go?
• Do you anticipate losing people over the period of a resource plan?

Staff may resign, retire or go on maternity leave. All of which will have an impact on the numbers and types of roles you need to recruit for.

The HR professional will be able to define every aspect of the process for hiring the right people. They will:

• Working with management to define the profile of the role
• Compose the specification of the person who will best fulfil the role
• Dictate how and where to advertise
• Know what to put in an advertisement to attract suitable candidates
• Define and structure interviews so that the best person may be selected.

HR can also ensure that before any hiring process begins, the hiring fits with the long-term HR business plan.

This ensures that the role is not just a knee-jerk reaction to a stressful period of overload.

Or one that will not become quickly redundant as the business stabilises, grows and changes

2. Organisational Design and Development

Psychological studies from as far back as the 1930’s have revealed that organisational structures and processes can influence the behaviour and motivation of a workforce.

In the modern era, the objectives of Organisational Design (OD) are twofold

• To put in place structures and processes that will increase operational efficiency and success, decrease risk and improve problem solving
• To create structures and processes that increase trust, motivation and commitment in the workforce, enabling better problem solving by confronting and managing problems through worker enablement and co-operation.

HR has a unique role here. It is involved in the creation and development of what the design of the organisation is and should be on a company-wide issue.

HR, with its whole-company overview can ensure that the creation of new systems and processes in one area are likely to have an impact on other related areas.

The HR professional will put forward people-based strategies to guarantee the consistency of the alterations across the organisation.

3. Training and Development

OD is likely to include the need for some new roles and changes to others. Therefore, training and development are guaranteed to be needed as part of the strategic growth process.

The HR business plan is likely to be looking at where the organisation will be in 5 -10 years’ time.  HR can ask if the workforce is acquiring sufficient skills to meet the growing demands that company’s a business’ growth.

A CIPD study revealed that 49% of respondents believed that they were either underused or over-skilled for the roles they were carrying out.

More significantly, those who felt that their skills were suited to their role were more likely to have job satisfaction (74%). At the end of the study, CIPD said:

Individuals who report using their skills fully in the workplace have higher levels of job satisfaction, earn more and are more resilient to change, while businesses benefit from a more productive workforce and increased profitability.

So, it’s going to be the HR professional who can speak authoritatively on the need for a strategic approach to training and development. This is part of HR business planning and will provide input to help the business achieve its goals effectively.

The HR professional, with access to objective data, is best placed to offer insightful ideas and plans on how to support the people aspect of the business plan.

If HR is allowed to be a key influencer in the business, they can solicit ideas, suggestions and feedback from both management and employees about both input and execution of strategy.

To Conclude on the Role HR Takes in Business Planning

HR’s key functions are all-important to the business planning process.

A shrewd organisation will realise this and make sure that a ‘plan for people’ plays a role of equal importance alongside the other facets of HR business planning.

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What Are "Drops"? Explaining the Drugs in 'The Penguin's Criminal Underworld

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Editor's Note: This article contains spoilers for Episode 1 of 'The Penguin,' "After Hours."

Oz Cobb ( Colin Farrell ) is already facing major issues from the first episode of The Penguin , " After Hours ," by murdering Alberto Falcone ( Michael Zegen ), coming under pressure from a suspicious Sofia Falcone ( Cristin Milioti ), and battling a financially frustrated Falcone Family . However, Oz's machinations have already born fruit, in the form of passing the blame of Alberto's death onto Salvatore Maroni ( Clancy Brown ), saving himself from Sofia's brutal torture with Victor's ( Rhenzy Feliz ) help. The next big gambit Oz seems to currently have is a plan he stole from Alberto involving a new drug to take over the criminal underworld. The Batman established that the main drug on the streets of Gotham is called "drops."

These drops are eyedrops that get the user high, with an effect seeming similar to MDMA , but appear to be extremely addictive — Oz says "good on you" for "staying off the drops" to Alberto, and knows people will still use them after they've been fished out of water, as we see later on. The drugs reveal a lot about Oz's approach to being a kingpin. With drops being set up as the currency of power, they have the ability to be the catalyst to Oz's overall plot to gain strength in Gotham by setting other crime families against one another.

Drops Are Being Set Up As the Currency of Power in ‘The Penguin’

Because Gotham is underwater after The Batman , the city has become the wild west, with multiple crews vying for power — especially with the vacuum that Carmine Falcone's ( John Turturro/Mark Strong ) death left behind. Since the "Odesa Mob" and "Burnley Town" are fighting over Oz's drop supply, and The Family already wanting Oz's drug business shut down to protect it better elsewhere, drops are set up as the key currency of power that crime syndicates will be fighting for. Oz stealing Alberto’s plan to create “a new high” positions himself to be in charge of this currency. However, only retrieving 30% of his stash of drops, after lying about having 70%, ramps up the pressure on Oz from the very start of The Penguin , meaning Oz's precarious position is currently only being held up by smoke and mirrors. But despite the drops' significance to other parties, Oz's wider plan seems to go far beyond the drops .

‘The Batman’ Global Viewership Spikes Hours Before ‘The Penguin’s Debut

Audiences around the world want to make sure they’re caught up on everything there is to know about Colin Farrell’s crime lord villain.

Drops Are Only a Small Part of Oz Cobb’s Plan in ‘The Penguin’

It appears that a rising tide of violence is exactly what Oz’s entire plan is set out to create. “Whoever controls drops controls the streets” is what Oz says to Sal Maroni when he visits him in prison, enticing Maroni with the ring he took off Alberto. But if Oz sets up the Maronis, Falcones, and other gangs around Gotham to destroy each other over the control of drops and Alberto’s murder, then Oz could rule over all of Gotham when the ashes settle . Clearly, Oz is not powerful enough to fight everyone on his own, so it sets up Oz to be a Machiavellian mastermind, but also leaves him vulnerable enough that each scene with Oz around other criminals is going to be extremely tense. Not only this, but by working in the background and pushing others to make the most noise in the city, it potentially explains why Batman isn't targeting Oz Cobb specifically, since Matt Reeves has confirmed that Robert Patterson 's Batman will not be appearing in the series.

Whatever this "new high" will end up being, Oz Cobb's desire to claim this drug for his own personal gain gives a fascinating presentation of his complex morals, as well as the hypocrisy of being a gangster. As we see earlier in the episode , he laments to Alberto about the old school style of gangsters , like Rex Calabrese, who everyone loved and admired. But, Cobb's reliance on the drug trade speaks to how Cobb's inner dreams conflict, if not directly contradict, with his harsh reality, not just as someone people laugh at , but also someone who will be pouring drugs into communities he wants the love from. Perhaps Cobb's biggest challenge this season will be having to choose between wanting to be loved or feared, while trying to do both.

Colin Farrell's performance as Oz Cobb has already been fantastic in the pilot of The Penguin , and his position of power has been set up excellently to be reduced or increased by the end of the show. However, while drops are going to be at the forefront of everyone's mind in a sunken Gotham, they may only be a small aspect of what Cobb uses to distract everyone else from his rise to power. By doing this, it sets up Cobb to be a truly menacing villain by the end of the show , and someone that perhaps even Patterson's Batman doesn't see coming in The Batman: Part II .

The Penguin is available to stream on Max in the U.S.

The Penguin

It follows the transformation of Oswald Cobblepot from a disfigured nobody to a noted Gotham gangster.

Watch on Max

• TV Features

• Colin Farrell

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