STRATEGIC HR PLANNING





Strategic HR management is defined as:
Integrating human resource management strategies and systems to achieve the overall mission, strategies, and success of the firm while meeting the needs of employees and other stakeholders.

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

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



The strategic HR planning process:

The strategic HR planning process has four steps:

  1. Assessing the current HR capacity
  2. Forecasting HR requirements
  3. Gap analysis
  4. Developing HR strategies to support organizational strategies

 

Assessing current HR capacity:

Based on the organization's strategic plan, the first step in the strategic HR planning process is to assess the current HR capacity of the organization. The knowledge, skills and abilities of your current staff need to be identified. This can be done by developing a skills inventory for each employee.

The skills inventory should go beyond the skills needed for the particular position. List all skills each employee has demonstrated. For example, recreational or volunteer activities may involve special skills that could be relevant to the organization. Education levels and certificates or additional training should also be included.

An employee's performance assessment form can be reviewed to determine if the person is ready and willing to take on more responsibility and to look at the employee's current development plans.


Forecasting HR requirements

The next step is to forecast HR needs for the future based on the strategic goals of the organization. Realistic forecasting of human resources involves estimating both demand and supply. Questions to be answered include:

  • How many staff will be required to achieve the strategic goals of the organization?
  • What jobs will need to be filled?
  • What skill sets will people need?

 

When forecasting demands for HR, we must also assess the challenges that you will have in meeting your staffing need based on the external environment.

  • How will the external environment impact on our HR needs?


Gap analysis

The next step is to determine the gap between where your organization wants to be in the future and where you are now. The gap analysis includes identifying the number of staff and the skills and abilities required in the future in comparison to the current situation. One should also look at all your organization's HR management practices to identify practices that could be improved or new practices needed to support the organization's capacity to move forward. Questions to be answered include:

  • What new jobs will we need?
  • What new skills will be required?
  • Do our present employees have the required skills?
  • Are employees currently in positions that use their strengths?
  • Do we have enough managers/supervisors?
  • Are current HR management practices adequate for future needs?

 


Developing HR strategies to support organizational strategies

There are five HR strategies for meeting your organization's needs in the future:

  1. Restructuring strategies
  2. Training and development strategies
  3. Recruitment strategies
  4. Outsourcing strategies
  5. Collaboration strategies

 

1. Restructuring strategies


This strategy includes:

  • Reducing staff either by termination or attrition
  • Regrouping tasks to create well designed jobs
  • Reorganizing work units to be more efficient

 

Attrition - Not replacing employees when they leave - is another way to reduce staff. The viability of this option depends on how urgently you need to reduce staff. It will mean that jobs performed in the organization will have to be reorganized so that essential work of the departing employee is covered. Careful assessment of the reorganized workloads of remaining employees should include an analysis of whether or not their new workloads will result in improved outcomes.

It is important to consider current labour market trends (e.g., the looming skills shortage as baby boomers begin to retire) because there may be longer-term consequences if you let staff go.

Sometimes existing workers may be willing to voluntarily reduce their hours, especially if the situation is temporary. Job sharing may be another option. The key to success is to ensure that employees are satisfied with the arrangement, that they confirm agreement to the new arrangement in writing, and that it meets the needs of the employer. Excellent communication is a prerequisite for success.

 

 

2. Training and development strategies

This strategy includes:

  • Providing staff with training to take on new roles
  • Providing current staff with development opportunities to prepare them for future jobs in your organization

 

3. Recruitment strategies

This strategy includes:

  • Recruiting new staff with the skill and abilities that your organization will need in the future
  • Considering all the available options for strategically promoting job openings and encouraging suitable candidates to apply

For strategic HR planning, each time you recruit you should be looking at the requirements from a strategic perspective. Perhaps your organization has a need for a new fundraiser right now to plan special events as part of your fund raising plan. However, if your organization is considering moving from fund raising through special events to planned giving, your recruitment strategy should be to find someone who can do both to align with the change that you plan for the future.

 

4. Outsourcing strategies

This strategy includes:

  • Using external individuals or organizations to do some tasks

Many organizations look outside their own staff pool and contract for certain skills. This is particularly helpful for accomplishing specific, specialized tasks that don't require ongoing full-time work.

Some organizations outsource HR activities, project work or bookkeeping. For example, payroll may be done by an external organization rather than a staff person, a short term project may be done using a consultant, or specific expertise such as legal advice may be purchase from an outside source.

Each outsourcing decision has implications for meeting the organization's goals and should therefore be carefully assessed.

 

5. Collaboration strategies

Finally, the strategic HR planning process may lead to indirect strategies that go beyond your organization. By collaborating with other organizations you may have better success at dealing with a shortage of certain skills.

Types of collaboration could include:

  • Working together to influence the types of courses offered by educational institutions
  • Working with other organizations to prepare future leaders by sharing in the development of promising individuals
  • Sharing the costs of training for groups of employees
  • Allowing employees to visit other organizations to gain skills and insight.

Documenting the strategic HR plan

Once the strategies for HR in your organization have been developed they should be documented in an HR plan. This is a brief document that states the key assumptions and the resulting strategies along with who has responsibility for the strategies and the timelines for implementation.

 


Implementing the strategic HR plan

Once the HR strategic plan is complete the next step is to implement it:

 

Agreement with the plan

Ensure that the board chair, CEO and senior managers agree with the strategic HR plan. It may seem like redundant step if everyone has been involved all the way along but it's always good to get final confirmation.

 

Communication

The strategic HR plan needs to be communicated throughout the organization. Your communication should include:

  • How the plan ties to the organization's overall strategic plan
  • What changes in HR management policies, practices, and activities will be made to support the strategic plan
  • How any changes in HR management will impact on staff including a timeframe if appropriate
  • How each individual member of staff can contribute to the plan
  • How staff will be supported through any changes
  • How the organization will be different in the future

It is impossible to communicate too much (but all too easy to communicate too little), especially when changes involve people. However, the amount of detail should vary depending upon the audience.

 

Legislation and mandate

Ensure that the actions you are considering are compliant with existing laws, regulations and the constitution and bylaws of your organization.

 

Organizational needs

Whether you are increasing or reducing the number of employees, there are implications for space and equipment, and on existing resources such as payroll and benefit plans.

 

Evaluation

HR plans need to be updated on a regular basis. You will need to establish the information necessary to evaluate the success of the new plan. Benchmarks need to be selected and measured over time to determine if the plan is successful in achieving the desired objectives.

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