Strategic human resource planning

Human resources planning is a process that identifies current and future human resources needs for an organization to achieve its goals. Human resources planning should serve as a link between human resources management and the overall strategic plan of an organization. Aging worker populations in most western countries and growing demands for qualified workers in developing economies have underscored the importance of effective Human Resources Planning.

As defined by Bulla and Scott, human resource planning is ‘the process for ensuring that the human resource requirements of an organization are identified and plans are made for satisfying those requirements’. Reilly defined workforce planning as: ‘A process in which an organization attempts to estimate the demand for labour and evaluate the size, nature and sources of supply which will be required to meet the demand.’ Human resource planning includes creating an employer brand, retention strategy, absence management strategy, flexibility strategy, talent management strategy, recruitment and selection strategy.

Best practices

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The planning processes of most best practice organizations not only define what will be accomplished within a given time-frame, but also the numbers and types of human resources that will be needed to achieve the defined business goals (e.g., number of human resources; the required competencies; when the resources will be needed; etc.).

Competency-based management supports the integration of human resources planning with business planning by allowing organizations to assess the current human resource capacity based on their competencies against the capacity needed to achieve the vision, mission and business goals of the organization. Targeted human resource strategies, plans and programs to address gaps (e.g., hiring / staffing; learning; career development; succession management; etc.) are then designed, developed and implemented to close the gaps.

These strategies and programs are monitored and evaluated on a regular basis to ensure that they are moving the organizations in the desired direction, including closing employee competency gaps, and corrections are made as needed. This Strategic HR Planning and evaluation cycle is depicted in the diagram below. Human resource planning is the ongoing process of systematic planning to achieve the best use of an organisation's most valuable asset - its human resources. The objective of human resource (HR) planning is to ensure the best fit between employees and jobs, while avoiding workforce shortages or spares. The three key elements of the HR planning process are forecasting labour demand, analysing present labour supply, and balancing projected labour demand and supply.

Implementation Stages

1.       Assessing the current HR capacity

• Develop a skills catalog for your employees so that you have a clear understanding of what your staff currently holds. This employee catalog should include everything from volunteer activities to certifications, of all degrees not just topics pertaining to their particular position.  These catalogs can be assessed to deem whether or not an employee is ready to add more responsibility, or to forecast the employee's future development plans.

2.       Forecasting HR requirements

• This step includes projecting what the HR needs for the future will be based on the strategic goals of the organization. Keep in mind you will need to also accommodate for external challenges that can affect your organization.
• Some questions to ask during this stage include:
  • Which jobs will need to be filled in the upcoming period?
  • What skill sets will people need?
  • How many staff will be required to meet the strategic goals of our organization?
  • Is the economy affecting our work and ability to appeal to new employees?
  • How is our community evolving or expected to change in the upcoming period?

3.       Gap analysis

• During this step you will observe where your organization is currently, and where you want to be in the future.  You will identify things such as, the employee count, and the skills evaluation and compare it to what will be needed to achieve your future goal.  During this phase you should also review your current HR practices and identify what you are doing that is useful and what you can add, that will help you achieve your goal.
• Questions to answer in this stage include:
  • What new jobs will we need?
  • What new skills will we need?
  • Do our present employees have the necessary skills?
  • Are employees currently aligned to their strengths?
  • Are current HR practices adequate to meet our future goal?

4.       Developing HR strategies to support the strategies of the organization.

• There are 5 HR strategies that you can follow to meet your organizational goals.
  • Restructuring strategies
    • This includes reducing staff, regrouping tasks to create well-designed jobs, and reorganizing work groups to perform more efficiently.
  • Training and development strategies
    • This includes providing the current staff with training and development opportunities to encompass new roles in the organization
  • Recruitment Strategies
    • This includes recruiting new hires that already have the skills the organization will need in the future.
  • Outsourcing strategies
    • This includes outreaching to external individuals or organizations to complete certain tasks.
  • Collaboration Strategies.
    • This includes collaborating with other organizations to learn from how others do things, allow employees to gain skills and knowledge not previously available in their own organization.

Overarching policy, process and tools

Human Resource Information Management Infrastructure

Governance/accountability structure Organizations that have effectively implemented competencies on a corporate-wide basis have ensured that there is an appropriate project management, governance and accountability framework in place to support the development, maintenance and revision/updating of the competency profiles to meet changing demands.

Theories and Practices

• • Theoretical Framework
    • Regulation
      • Use of regulation and policies (corporate policies) for organizational and individual behavior 1960s-1980s later Emphasized operation over strategic practices
    • Control
      • From regulating to HRM strategies
      • Establishing and maintaining control systems
      • Modify HR practices to use new strategies
    • Shape
      • Using strategic planning to create competitive advantage
      • Create strategic unity- “the agreement of employees, customers, suppliers, financiers, unions, and distributors all agree on the philosophy, vision, and goals of an organization” (Ulrich 43)
        • Everyone goes for the same goals
      • Attain strategic unity through management of behaviour, information, and rewards, Information reinforces organizational strategies, Rewards- managerial bonuses based on long term effectiveness vs short term profits in order to Generate commitment
        • IBM created “core culture based on values of excellence” (Ulrich 44)
    • Universalistic, contingency and configurational perspective as the three modes of theorizing the effect of HR practices on organizational performance

International Implications

The current definition of strategic human resource planning is defined as a process that identifies current and future human resources needs for an organization to achieve its goals. It further explains that aging worker populations in most western countries and growing demands for qualified workers in developing economies have underscored the importance of effective Human Resources Planning. When it comes to identifying best practices, forecasting labor demand, analyzing present labor supply, and balancing projected labor demand and supply as the three key elements of strategic human resource planning. By leaving out sufficient information in regards to the current worldwide phenomena known as globalization, the wikipedia article disregards Kanter’s first frontier of strategic human resource management, which is increasing organizational flexibility.

As shown by Tung, In the past three decades or so, globalization/regionalization, migration and reverse migration (also referred to as "brain circulation"), the ascendancy of emerging markets, the demand for people with a global mindset, and the worldwide war for talent have brought about fundamental changes to the nature, magnitude, and raison d'etre for human resource management (HRM) in a global context.

More information is needed that provides a global perspective to strategic human resource planning to ensure that business can attract the best foreign employees as well as adaptation strategies to allow foreign companies smooth assimilation should they decide to invest here. Festing offers a superb comparison of such perspectives that adds to our understanding of the effects of globalization and localization on comparative strategic human resource management by providing an encompassing overview of the existing research paradigms.