Human Resources Plans:

The Foundation for Organizational Strategic Planning

By Sharlyn Lauby, SPHR

Effective decision making is founded on sound planning. In order to be successful,

organizations must develop both long-range (strategic) and short-range (tactical) plans.
In addition, resources must be organized and allocated to carry out organizational goals in
an effective and efficient way.

Human Resources professionals need to utilize those same approaches to strategic

planning and business development that are present in the marketing, financial,
technology, and operational departments. Every company has a marketing plan to guide
their product and/or service strategy. Hence, every organization should have a human
resources plan that outlines their people strategy.

The Business Case for HR Plans

An organization’s human resource plan should be directly tied to the overall strategic
plan of the company. It provides the future needs and availability of human capital for
the organization.

Strategic decisions require long-term commitments. A strategic error can result in

workforce skills deficiencies which can impact customer service and profitability. On the
other hand, a good plan can help support corporate goals and protect a company’s
resources.

Components of a HR Plan

The same components that are used in overall strategic planning can be used to develop a
human resource plan. The first step is to conduct a thorough analysis of the current
environment. The result of this environmental analysis will bring relevant data to the
department in the form of information, communications, surveys and assessment systems.
This process will surface factors that affect the department both now and in the future.
HR professionals will want to monitor these trends and consider how they will affect the
workplace.

The environmental analysis should consider several factors including government

influence, economic conditions, business competition, and workforce demographics.

Once the analysis is complete, then planning can begin. HR planning consists of four
phases that are outlined below:

1. Formulation
 It is important that the HR Culture is in alignment with the rest of the
organization. The vision statement should represent the overall, guiding
image of the department. It is the ultimate expression of success for the
human resources department. The mission statement will specify what
activities the human resources department intends to pursue in order to
achieve their vision. A well defined mission and vision will keep the
human resources team focused and convey an organizational purpose that
will motivate the team.

The last component is defining department values. Values are the

“heartbeat” of the organization. They outline what is important and often
dictate employee behavior. Department values should correspond with the
values of the organization.

Once the vision, mission, and values of the department are established, it
is important to determine how and when to communicate this information
both internally and externally.

2. Development

It is important to understand the status quo before a roadmap for the future can
determined. A simple and effective way to gain a clear picture of the current state
of the department is to conduct a SWOT Analysis. The process answers four
basic questions:

1) What are your department’s internal strengths?

2) What are your department’s internal weaknesses?
3) What external opportunities would move the department forward?
4) What external threats might hold the department back?

Some of the topics that are included in the SWOT Analysis include staff
capabilities, benefit programs, employee services, information systems, office
facilities, and the reputation of human resources within the organization, just to
name a few. It is important to remember that the SWOT Analysis is not just
about exploiting strengths; it is about addressing the weaknesses as well.

At this point, long-term strategies are created. These are specific results that an
organization seeks to achieve their basic mission. The time frame for long-term
strategies is three to five years.

The values of an organization should be taken into account when developing

strategies. For example, companies with traditional practices might want to think
twice about implementing ‘trendy’ programs…unless of course, it is their strategy
to move the culture in that direction.

3. Implementation
 In order to complete long-term strategies, short-term objectives should be
established. Short-term objectives are milestones that can be accomplished within
six months to one year. These objectives allow for continuous commitment and
frequent evaluation of the long-term strategy. Each short-term objective will need
an action plan and resource allocation budget (i.e. finances, human capital,
equipment, technology, etc.)

One of the most critical components during this phase is to motivate employees or
explain “What’s in it for them?” Connecting the short-term project/objective to
the long-term strategy of the organization creates employee commitment and
positive productivity.

4. Evaluation

Regular reviews of the department strategy are vital to the success of the plan.
Unforeseen issues can be quickly brought to resolution with regular monitoring.

In addition, it is important to track results data regarding the project. Be aware

that data collected during a short-term project might not accurately reflect trends
and performance. Information gathered over the course of time will allow for
evaluation and assessment of how well the department has performed in relation
to their plan goals and objectives.

A human resource plan should reflect results in measurable terms. Being able to
articulate return on investment metrics is critical to future resource allocations and
the ability for the initiative to have a positive impact. Two of the most common
measurements are time and budget.

Strategy evaluation will lead to decisions focused on either (1) altering strategies
or (2) waiting for desired results. Change is an inevitable part of the process and
taking corrective action is necessary to keep the department on track in achieving
its vision.

In Summary

Strategic planning is a multi-step process. Effective planning is a continuous process

requiring creativity and support from top management. Using HR Planning processes to
analyze and identify the need for human capital will allow the organization to achieve its
goals and objectives.

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Sharlyn Lauby, SPHR is the President of ITM Group, Inc. in Ft. Lauderdale, FL. ITM
(Internal Talent Management) provides strategic and technical consulting services to
enhance talent in the workplace. For more information, go to www.itmgroupinc.com.
Published and Copyrighted in 2003 by the Society for Human Resource Management
(SHRM). For reprint permission, please contact the SHRM directly at www.shrm.org.