A company's human resources department performs many tasks related to its employees, including recruiting, training, career development and retirement services. Human resource planning is one of HR's most important goals, because it deals with hiring and the job market. It is crucial that a company always be on top of labor trends, so that it hires the talent to fulfill its goals.

Human Resource Planning Definition

Human resource planning is a process in which HR pairs candidates with new positions that a company expects to fill in the near future. HR examines workers internally and outside the company.


There are two components to human resource planning: requirements forecasting and availability forecasting. Requirements forecasting estimates how many employees a company will need to fill its new positions, what skills and expertise they will need and where they will be deployed. Availability forecasting determines how many of these candidates are available in the marketplace and how likely the company is to hire them.

Forecasting is an ongoing process, because the workforce and the labor market are constantly changing.

Reasons for Human Resource Planning

The main goal of human resource planning is to ensure that a company always has candidates lined up to take on new positions, so that time and productivity are not lost. Long lag times between one employee's departure and a new hire can weigh on a company's ability to compete.

Forecasting is an important component of this because it lets a company know how long hiring will likely take and what it can do to speed up the process. If an HR department decides that a company needs a large number of workers to staff a new division, but the job market is tight for workers with the skills needed, it will have to secure these workers. Because rivals are also seeking people with these skills, the company will have to step up recruiting efforts and increase compensation packages to lure talent. If a company did not engage in human resource planning, it would not know how difficult it would be to hire the necessary workers until too late. Potential employees would be lost to rivals, and the business would be unable to build the team it needs.