Human Resource Planning: Process, Tools, and Importance

Human Resource Planning: Definition, Examples, and Tips

Human resource planning (HRP) is the strategic process of identifying and addressing current and future human resource needs in an organization. It ensures the best fit between employees and jobs, avoiding manpower shortages or surpluses, and supports organizational goals. The HRP process involves four key steps: analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and developing plans that support the company's goals.

What is Human Resource Planning?

Human resource planning helps organizations proactively adapt and pivot their talent strategies for future needs. It is the steps and processes that organizations take to properly plan their HR requirements and programs to ensure they are aligned with the organization's overall strategy. HR planning is a critical organizational function that can significantly impact productivity, engagement, and bottom line results.

Examples of Human Resource Planning

1. Large Expansion into a New Geographic Region: In this scenario, an organization needs to understand the employment laws and regulations of the new jurisdiction, identify staffing needs, and plan for large-scale onboarding of new hires.

2. Older Workforce: An organization with a large proportion of employees nearing retirement age needs to plan for the impending large-scale attrition of workers and develop strategies for retention and succession planning.

Tools for Human Resource Planning

Effective HR planning requires the right tools. Strategic compensation tools help organizations keep tabs on employee compensation levels to ensure they are commensurate with performance. Retention tracking provides valuable benchmarks for turnover at the organization, helping predict and address causes of employee attrition. Talent pathways and better manager tools help identify top performance, map desirable career paths, and place them in positions of great influence. Tools that track employee satisfaction help identify key employee satisfaction and engagement benchmarks, and uncover underlying problems or opportunities.

Balancing Labor Demand and Supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis that lays out specific needs to narrow the supply of the company's labor versus future demand. This analysis will often generate a series of questions, such as:

• Should employees learn new skills?
• Does the company need more managers?
• Do all employees play to their strengths in their current roles?

Developing and Implementing a Plan

The answers to questions from the gap analysis help HR determine how to proceed, which is the final phase of the HRP process. HR must now take practical steps to integrate its plan with the rest of the company. The department needs a budget, the ability to implement the plan, and a collaborative effort with all departments to execute that plan.

Importance of Human Resource Planning

Human resource planning is important because it allows companies to plan ahead and maintain a steady supply of skilled employees. It helps evaluate the needs of the company and plan accordingly to meet those needs. It also looks at organizational design, employee motivation, succession planning, and increasing return on investment overall.

Challenges of Human Resource Planning

The challenges to HRP include forces that are always changing. These include employees getting sick, getting promoted, going on vacation, or leaving for another job. HRP ensures there is the best fit between workers and jobs, avoiding shortages and surpluses in the employee pool.

Conclusion

Human resource planning is an ongoing, data-driven process that ensures an organization's greatest asset—employees—is used to its best ability. It guarantees that employees and jobs are a good match while preventing workforce shortages or surpluses. HRP is a crucial investment for any company since it allows them to remain productive and profitable. By following the steps outlined in human resource planning, organizations can maximize their human capital and build a future-ready workforce.