Steps in the Human Resource Planning Process

The most valuable resource available to an organization is its workforce – human resources. The caliber of employees – their skills, qualifications and their levels of engagement – can mean the difference between staying in the black and struggling to stay in business. The human resource planning process is, therefore, critical to attracting and retaining talented workers. Attracting qualified applicants and retaining high-performing employees is just part of the equation. Human resource planning is comprised of four distinct steps: assessment, projection, development and evaluation of the workforce.

The initial step in human resource planning is assessing the need for a workforce. Very small organizations and home-based businesses may be able to get by without a staff; however, if your company requires several functional components, it's likely that you'll need more than your own generalist skills. To determine the number of employees and the functional areas in which they work, review your organization size and objectives. For example, if your company's goal is to attract a diverse market and you offer a variety of products or services, a one-person operation probably won't result in the level of success you want. In this case, your employee base requires workers with various skill sets and interests.

Future business goals play an integral role in human resource planning. Factors such as company expansion and market growth are two factors to consider when you project future workforce needs. If you're planning to expand into secondary markets, not only do you need qualified workers who are subject matter experts in your product or service delivery, you'll likely require employees with expertise in market research to accurately predict potential business growth in those markets. Labor market availability also plays a role in projecting future workforce needs. For example, human resource planning in the nursing field relies on factors such as attrition, nursing school enrollment and graduation rates, as well as the number of nurses deemed high-performers who might be interested in allied fields or nursing management roles. In a 2017 white paper titled, "Supply and Demand Projections of the Nursing Workforce: 2014-2030," the U.S. Department of Health and Human Services uses supply and demand as a basis for determining future workforce needs. Supply meaning the numbers of RNs and LPNs available for work, and demand meaning the level and complexity of health care services required to serve the population.

Human resource development – the training and development of the existing workforce – can have a significant impact on your human resource planning. Employees identified as high-performers may be part of your succession plan, as they transition from staff to leadership. Or, workers who are interested in acquiring new skills may transition into lateral positions in another department within the organization. Regardless of the reason why employees move around or move up, they vacate positions that may need to be filled, which might require reassessing your organization's need for additional or replacement workers. Granted, you will have an employee whose job satisfaction in their current positions is so high that they remain in one role from the beginning to the end of their career. However, ongoing training and development are essential not only for an employee's personal and professional growth but for the organization's bottom line. 20|20 Business Insight says "Training isn't just important to any company, it is vital." The consulting firm says workforce training and development can maintain your organization's competitive edge, prepare employees for upward mobility and enhance employee engagement and satisfaction.

Human resource planning is cyclical. It's not a one-and-done activity because your organization's human resources needs are constantly changing and evolving. While you may have carved a comfortable niche for your business, a stagnant workforce won't fit comfortably in any niche. This is why evaluation also is a critical step in the human resource planning process. At regular intervals, evaluate what your needs assessment revealed, revisit your projections and measure the effectiveness of your employee training and development, and finally, use the results from your evaluation to sustain your human resource planning or support changes to the organization's planning process.