What’s it: Human resource planning or workforce planning is about how your company determines and prepares how many employees you need to meet your goals, including their qualification requirements. You must determine and take steps to prepare for staffing needs, both now and in the future, which requires you not only to focus on the quantity and quality aspects but also on related policies and programs. It aims to anticipate demand for staff and minimize hiring errors and avoid wasting time and money.
The process usually begins with auditing the human resources to map the current condition, whether there is a gap between the actual condition and what you want. So, you can take the appropriate actions.
Why is human resource planning important?
Human resource planning is important to optimize existing human resources. They are your assets and flow economic benefits to your company. So, optimizing them also means optimizing the economic benefits you get.
Then, developing a resource plan is also important to anticipate future needs. For example, as your business grows, you need more people. The skills you need may also be different from those currently available. Thus, the plan accommodates how your company addresses the gap between current and future needs to achieve your vision and mission.
Such planning also helps your company to achieve higher productivity. With a good plan, you can get the best talent according to your needs. Then, you can place them in the right position according to their abilities. So, in the end, it leads to an increase in their productivity. And, as productivity increases, your company can earn more revenue at a more efficient cost, leading to more profits in the future.
How does human resource planning work?
As explained earlier, the human resource plan details the current conditions and what you want in the future, tailored to your company’s goals and objectives. Your staff in the human resources department (HR department) then performs the audit. They identify whether there is a gap between current and future demand. So again, it’s not only about the number of your employees, but also their skills and qualifications.
Then, once you map out those gaps, you consider ways to address them. For example, it could involve developing systems, policies, or programs on aspects such as recruitment, training, development, appraisal, and promotion.
Aspects you need to consider when calculating your needs for employees may include:
- Average years of service
- Turnover rate
- Qualifications and skills
- Operation location
Mapping and identifying gaps
The planning process begins with mapping out what you already have and don’t. You need to answer questions such as whether your current needs for human resources have been met? Does your company need to improve its quality? Does your company need to hire employees or acquire new skills?
Mapping is an important part before you hire new employees. It can save your company money. And, if your current resources match your future needs, why hire new ones?
At this stage, you check each position. Who and what do the employees in these positions do? How are their skills, do they need to be improved?
Estimating the need for human resources
This stage requires you to match the actual conditions with the ideal conditions you want. Once you have a complete list of every job in your company, you decide whether the available resources are suitable for your needs. For example, is the current number of employees sufficient? Are there gaps in employee skills? Do you just need to train them to acquire new skills? Or, do you need to recruit new workers?
If there is a gap between actual and desired conditions, you need to estimate how much you need. But, again, it’s not just about how many employees you have to hire, but also the skills to fill the gap.
Recruiting and training employees
After estimating your needs, you take the next step, strategize and take action. You are looking for solutions to fill gaps in employee numbers and skills. For example, it may require you to recruit new employees, transfer them, or train and develop them.
Suppose you need a new employee. You then begin the search for suitable applicants. You specify applicants, advertise vacancies, screen and select them, and select the best. To do so, you may need a partner. So, choosing a recruitment service provider is also an important aspect you need to consider.
In the latter case, you may see a skill gap, but it may still be built up internally. So, you don’t need to recruit new employees. Instead, you encourage employees to take training to learn new skills and knowledge you will need in the future. Such training is essential to meet the ever-changing demands of the business.
Evaluating related policies and practices
The resource plan is not only about adding employees and skills but also about other aspects, including systems, culture, practices, work programs, and policies on human resources. This may include work design, career paths, compensation culture, promotions, industrial relations, and compliance with government regulations.
You then evaluate all of them to find possible bottlenecks and fix them. This is also an important stage because even if you have trained talent if your policies or systems are bad, they can also negatively impact your business.
Monitoring performance and work environment
This stage is all about monitoring employee performance. You make sure they carry out their duties and responsibilities well. Then, you review their performance, identify successes and areas for improvement.
You also evaluate the work environment in which employees carry out day-to-day activities. The safety and health of employees are a priority. A comfortable work environment with minimal interpersonal conflict makes employees feel at home to work. It all affects the quality of their working life.
Evaluating work plans
After executing the plan, you can evaluate whether it was successful or not. Of course, it takes some time to see the results. Has the plan helped your company achieve your targets? You might use several metrics to evaluate it, such as profit, production, turnover rate, and employee satisfaction.
Did the plan work according to your expectations? Is it still relevant to your future business demands? If your plan doesn’t work out, you can start from the first, identifying gaps.
What are the challenges in human resource planning?
Making a plan and executing it is a difficult task. What you have planned may not be realized or be expensive due to various factors, both internal and external. For example, when you hire new employees to build innovation, you may need people who can bring new perspectives, are open-minded, and tend to dislike the status quo. Your decision may not be liked by some of your current employees. They may show resistance because they feel threatened.
The next challenge is the difficulty of finding qualified employees because there are few available. And, your competitors may have gone ahead of you and recruited most of the talent available on the market. Finally, candidates ask for high salaries because they know their skills are what you really need. So, finally, you have to spend more money to hire them.
Lastly is the bias in planning. You may be too concentrated on short-term problems. Thus, your plan is not flexible enough to support your long-term goals.
What to read next
- Employee Turnover: Calculation, Types, Causes, Impacts
- Hard Human Resource Management Vs. Soft Human Resource Management: Pros and Cons
- Human Resource Management: Its Importance and Role
- Human Resource Planning: How It Works and the Challenges
- Human Resources Audit: Importance and How It Works