How Do I Assess and Plan for HR Needs? Seeking Guidance on Strategic HR Planning

Strategic Human Resource Planning

Please provide the guideline on 'Strategic Human Resource Planning'. How can I assess our 1) current HR capacity, 2) forecast HR requirements, and 3) find the gap? If there is any format, please provide.

Regards,
Indranil

Strategic Human Resource Planning

Strategic Human Resource Planning is derived from the strategic plan of your company. Please confirm the type of your industry, what your finished product or service is, what market research you have done in your industry, and your position vis-a-vis your competition, etc.

In strategic planning, we use various tools like Michael Porter's 5S, McKinsey's 7S, and SWOT Analysis. Strategic HR Planning will be based on the outcome of the application of all these tools. You cannot look at the HR department in isolation.

I conduct a training program on "Strategic Leadership." In my training, I handle these tools. The phrases "strategic leadership," "strategic planning," and "strategic management" are used interchangeably. Therefore, do not concentrate too much on the nomenclature of the program.

Thanks,

Dinesh V Divekar

The Strategic HR Planning Process

The strategic HR planning process has four steps:

- Assessing the current HR capacity
- Forecasting HR requirements
- Gap analysis
- Developing HR strategies to support organizational strategies

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, you must also assess the challenges that you will have in meeting your staffing needs based on the external environment. To determine external impacts, you may want to consider some of the following factors:

- How does the current economy affect our work and our ability to attract new employees?
- How do current technological or cultural shifts impact the way we work and the skilled labor we require?
- What changes are occurring in the Canadian labor market?
- How is our community changing or expected to change in the near future?

To read more about the changing labor force and why it matters to non-profit employers, go to the Diversity at Work section of the HR Toolkit:

- Why diversity at work matters

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. You 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?

HRM can play a crucial role in environmental scanning to identify and analyze external opportunities and threats essential for the company's success. HR is uniquely positioned to provide competitive intelligence that is useful in the strategic planning process. Information regarding incentive plans used by competitors, customer complaints, pending labor laws, etc., can be made available to strategy makers.

HR participates in the strategy formulation process by providing various information about the company's internal strengths and weaknesses, which can significantly impact the viability of the firm's strategic options. In many cases, the unique HR capabilities of an organization have driven strategy formulation.

HR Strategic Implementation

HR strategic implementation can occur in the following areas:

- **HR Effectiveness:** Aligning HR practices with business strategy can enhance HRM outcomes such as employee competence, motivation, commitment, and flexibility, all of which reflect in the quality of goods and services provided and productivity, leading to improved financial performance. Based on the above points, HR can establish goals and formulate strategies.