Strategic HR planning can help your company work together to achieve its business goals. Find out more about strategic HR.
The human resources function was historically more administrative than strategic. Today, however, nearly every major global company has an HR department that is involved in strategic planning and future decision-making.
SHRM found that HR professionals in small and mid-sized organizations do not participate in strategic planning. Gartner also found that just 33% of organizations consider their HR function effective in strategic planning (full-source available to clients).
This guide is for those who are part of the minority that is behind the curve.
We’ll discuss strategic HR, its long-term benefits and give an overview of the process to help you, as an HR leader, set your organization on a sustainable path to success.
Gartner describes strategic HR planning as “HR leaders plan to manage business risks and opportunities by prioritizing HR initiatives and allocating resources accordingly.”
- Harmonizing business and HR strategies
- Priorities for HR in relation to business initiatives
- As business conditions change, adjust the execution of your initiatives
The traditional strategy of human resource management is reactive. This means that the HR department’s actions are often recurrent. For example, recruiters may focus on filling vacant roles due to turnover or answering questions about compensation and benefits as they arise.
Strategic human resource management requires more planning. Instead of waiting for workers to quit their jobs or asking questions, strategic human resource management is more proactive. For example, HR professionals might create a self-service knowledge base for employees or initiate initiatives to improve employee job satisfaction.
Simply put, strategic HR is about planning for the future rather than supporting the present.
What are the advantages of strategic HR?
Companies that use strategic HR have a number of benefits.
- Improved alignment between HR strategy & business strategy: The most important benefit of strategic HR planning, is that the HR department actively participates in helping to achieve business goals. If your company has a goal of improving efficiency, then HR will help you by finding ways to automate workflows, and analyzing information about employee productivity.
- A well-planned hiring strategy: Workforce planning is a component of strategic HR. It anticipates your organisation’s future hiring needs for the next two- to five years. This will allow your team to make better decisions regarding how to use the talent that you already have and what resources should be used to recruit.
- A strategic HR approach will help you plan training and development programs that are aligned with your business goals. If you find out that some senior leaders will be retiring in the next few decades, then it is possible to invest in leadership development programs to help current employees prepare for those positions.
A brief overview of strategic HR planning
Begin by setting organizational goals
It is important to know where you are going before you start the journey. This is why strategic HR begins with defining your most urgent business goals. Work with C-level executives and department heads to determine your organisation’s main goals for the next one to three year.
Assess the capabilities of your current team
Auditing your workforce is the next step in strategic HR planning. This audit is designed to assess the potential and skills of your employees, as well as the HR department.
Future HR requirements can be predicted
Next, gather information about your organisation’s future goals as well as the current state of your workforce. Then, brainstorm with your HR team. Keep the brainstorm moving by answering these questions:
- What high-priority skills are we required to master in the coming years?
- Are there any current employees we could train to learn new skills?
- Do we need to increase or decrease the headcount? How much?
- What company-wide HR initiatives are most beneficial given our organisation’s goals? Improve employee engagement, establish an employee well-being programme, increase productivity, capture employee referrals, etc.
Make a plan of action
Next, you need to create a plan of actions based on your HR needs. Your answers to step three will determine the steps that your team should take. If you have determined that your company will need to increase headcount significantly over the next few decades, you should start to create a timeline and set target dates to fill those positions.
Monitor your strategy’s progress continuously
While strategic HR is an ongoing process, it doesn’t mean that you should not measure the results of your efforts. Your success metrics will differ depending on your plan. For example, if you launch an employee engagement initiative, you might compare absenteeism, voluntary turn-over, and productivity metrics with their pre-initiative rates to get an idea of the effectiveness of your initiative.
These metrics can be tracked easily by investing in business intelligence software or HR analysis software. These tools allow you to create customised dashboards, populate them with real-time data, and then build reports that can be shared with your stakeholders.
Human Capital Management System
Begin the representative lifecycle by inviting new team members to join the association. Get them familiar with the product/service and customer base.
Your business can enrol, hold, promote, and train its employees. These functions include representative commitment, enlistment, leadership development and remuneration of the board. They also manage worker performance.
Facilitates the enlistment interaction to worker benefits. Allows for standard expenses, and determines eligibility dependent on chosen models. Keep in mind representative races and how they relate to your organisation’s spending plan
Develops ability procurement further by placing position orders, mechanises any organisation’s vocation pages, and works with resumes via a web-based job posting.
Arranges nonappearance plans and allows a business to follow non-attendance. It also gives time off endorsements and creates a management system to ensure paid time off (PTO), and vacations.
Financial Management and Payroll
You must deal with all aspects of employee remuneration. This includes wage computation.
Allow workers to report their time continuously or later for wage calculation purposes.