Importance of Human Resource Planning

business colleagues preparing for business meeting image by Vladimir Melnik from

Human Resources, or HR, may be the most important department in a company. It is the only department that affects every single employee from top to bottom, and is responsible for managing what is almost always the single greatest expenditure for a company—employee costs.

As puts it, “A comprehensive Human Resource Strategy plays a vital role in the achievement of an organisation's overall strategic objectives.”

An HR department that is well-versed and experienced in planning can make a company much more productive and cost-efficient. It can also make a real difference in the employees morale if workers know that decisions affecting their careers are being made in accordance with thoughtful, proactive analysis instead of last-minute reactive actions.

Minimizing wasted dollars on excess personnel.

A small company that can get by with nine people but has 10 on staff wastes nearly 10 percent of personnel costs that could be used elsewhere. While this may only be $30,000 to a small company, the costs, following the 10 percent model, may waste of millions of dollars for larger companies. Conversely, having too many tasks for too few personnel can cause stress to build up to a critical level as people struggle to get the job done.

Matching the number of people needed to complete the tasks is critical for any company's profit.

Forecasting future needs and expenses.

Situations change and so do human resource needs. Long-term forecasting allows a company to make tactical plans to meet those needs. For instance, an expansion of the company in three years might provide a need for 300 additional employees. If the community doesn't have the needed demographics, though, those new employees may have to be brought in from elsewhere, which raises expenses and takes much longer to accomplish.

For seasonal businesses, every six months may make a significant difference in the amount of personnel needed. This may become a reoccurring problem if the HR department isn't responsible for the planning.

Scheduling productivity—meeting workflow.

Some companies schedule more than one work shifts, though staffing levels may differ between each. It's this type of planning when the production department and HR have to work together. If a big bump in orders is coming in 60 days, the need for overtime may be apparent to production but not to HR, which may consider that period prime time for allowing vacations.


HR plans for workers being replaced because of personnel losses, what personnel resources are available in the community, how to best reach those resources, and what they need in the way of salaries and benefits to become part of the company.

Interviewing and selecting new hires is, at best, an inexact science. It’s never known until weeks, and perhaps months, go by whether someone will work out. But the better the HR department has planned the company's needs, the better it works out. Constant communications between management, HR and other departments creates an environment where planning becomes an everyday part of the hiring process.


HR may be heavily involved in the training process for the employees. Effective training can't be done without a plan that details what knowledge needs to be communicated, who will provide the training and how the training will be done. The HR department that ensures employees are thoroughly trained and competent makes the difference in productivity, reliability and employee safety.