What is Human Resource Planning?

It is both widely and wisely understood that people are, by far, an organization’s most important asset. This is true for organizations of all sizes, from small firms to large, multinational enterprises. There are, of course, other critical factors that matter. But every strong, stable, and growing organization can readily point to the quality of its workforce as a substantial, reliable competitive advantage. And that is where human resource planning (HRP) makes a transformative difference.

7 Steps of the human resource planning process

In essence, HRP is an ongoing process of forecasting workforce requirements, in order to determine and ultimately address future hiring requirements. This not only means ensuring that the right number of employees are on the roster at the right time, but just as importantly, it also means that employees have the required skills and abilities necessary to effectively and efficiently carry out their day-to-day tasks. 

Generally, there are seven fundamental steps of HRP. In some systems or views of HRP, these seven steps are condensed into as few as four or five steps. While we’ve gone with and expanded view on what constitutes HSP, the actual number of steps is less important than ensuring that all of these concepts are embraced by the overall HRP effort and strategy.

Step 1: Human resource management must identify organizational requirements 

The starting point in HRP is to identify, categorize, and analyze core organizational objectives, in order to clearly understand what human resource capabilities are required.

• What are the current human resource goals relative to the brand’s organizational plan?
• Are there staffing shortages in play already?
• Are there surpluses in any of the departments that are impacting budgets and bottom line profitability?
• Are current employees asking leadership for adjustments in staffing in order to better manage workload?

These are all considerations that are crucial for the HR department to handle in the HR planning process around HRP.

Step 2: Build an inventory

Next, HR professionals work with HR managers and organizational leadership to build an inventory of employee skills, experiences, certifications, and other requirements that were identified in during the initial discovery and identification stage.

Equipped with an understanding of organizational needs and an inventory of existing capacity and capabilities, HR teams can then drill down into projections and other data to better estimate current capabilities and future needs, analyze that data, and identify the organization’s current stance relative to “what we currently have” vs. “what we are going to need.” 

Step 4: Determine internal capabilities

The next step in HRP is composed of a number of critical and in-depth steps necessary to look inwards and determine if current personnel can, with additional training and development, fill any of the gaps identified. Recently, this approach has been getting more media attention and spotlight as part of what is being called the “quiet hiring” movement.

Seen by some as the antidote to “quiet quitting,” where employees are only investing the effort they feel is necessary for the minimum requirements of the position, quiet hiring is a cost-effective and non-disruptive way for an organization to fill skills gaps and for teams to acquire new skills without the organization actually absorbing the costs and labor of onboarding full-time new hires.

Before moving to the next step, it is important to note that when done properly, quiet hiring is not a means of exploiting or taking advantage of employees already in role. This should be done carefully and with an attempt to not place them in roles and situations where they cannot succeed.

In fact, an attempt to re-configure an employee’s role without their full awareness and cooperation is likely to be seen as a constructive discharge (also known in some countries as a constructive dismissal), and can cause complications down the line for your organization.

Rather, quiet hiring should—and legally speaking, must—be something that benefits both the organization and any affected employees. The organization acquires skills that are needed to achieve current or anticipated workplace objectives. And employees acquire useful and valuable new abilities that may translate to increased compensation, more job security, or more overall job satisfaction. 

Step 5: HR planning takes the lead

The next step is for human resource team to build an action plan. This document captures details on how the organization will meet its anticipated personnel needs by a mix of utilizing existing employees, and onboarding new employees.

It is extremely important for the action plan to be practical, detailed, and realistic. Otherwise, it will not drive positive results. On the contrary, at worst it can unleash chaos, and at best will be quickly deemed unreliable and ignored.

Step 6: Carry out the plan

This step is where the proverbial “rubber meets the road,” and the action plan is implemented. Ideally, everything will go according to plan and there will no surprises along the way. Realistically, however, this is almost certainly not going to be the case. Issues and obstacles will emerge — but so will positive opportunities.

It is important to adhere to the plan, but at the same time realize that it is more of a detailed roadmap than a precise, exact blueprint. And of course, all stakeholders, including but not limited to affected employees, need to be part of the overall communication strategy.

Keep in mind that this process is as much of a change management initiative as it is a human resource activity. Studies have found that the core reason why so many people fear change is not necessarily because they are happy with the status quo and do not want to see it altered, but rather because a lack of communication leads to confusion, resentment, and reduced buy-in to the overall plan and thus less impressive outcomes of the HR department’s efforts.

Keeping the lines of communication open, and being as transparent as possible, can go a long way towards successful plan implementation. 

Step 7: Evaluate Performance and Progress

Human resource planning is not a static, one-time “set it and forget it” goal. It is an ongoing process. It is crucial to monitor the action plan, and evaluate performance and progress in in order to make necessary adjustments.

In some rare cases, factors will arise that can render the action plan invalid. Indeed, we need only reflect back on the early days of the pandemic to recall how quickly and dramatically things can change.

For example, in late 2018 a survey by ManpowerGroup found that hiring intentions were at a 12-year high — and poised to climb even higher throughout 2019. Yet in the first six months of 2020, 59 percent of CEOs implemented hiring freezes.

Human resource teams and organizational leaders should be willing to re-visit and re-invent the action plan if it is necessary to do so.