Businesses began using the term “human resources” in place of the word “personnel” to describe the more complicated and far-reaching strategies for planning and managing a workforce. In addition to managing employees once they come on board, human resources professionals create proactive plans for addressing a company’s workforce needs, including the key areas of organizational structure, recruiting and retention and budgeting.

Human Resources Planning

Human resources planning addresses the workforce issues of a company in advance, as opposed to human resources management, which handles issues once workers are on board. The planning aspects of HR include creating an organization chart, writing job descriptions and their related competency requirements, setting benefits and compensation levels, addressing legal compliance issues, developing employee attraction and retention strategies, creating company policy guides and developing budgets.

Organizational Structure

HR planning starts with determining the workforce needs of your business, forecasting staffing needs years in advance. This starts by creating an organization chart that lists not only the staff positions you anticipate you will need, but also the functional or departmental structure and corporate hierarchy you want. This helps you plan which functions to outsource and when to bring specific jobs in-house. This planning process includes creating job titles, written descriptions and listing the core skills and experience each position will require. An HR manager will set benchmarks for adding positions in the future, which might be tied to sales, revenues, the addition of additional locations or the workload of a department that eventually requires it to be split into multiple departments. An example of this latter scenario is a marketing department spinning off advertising, public relations and promotions departments.

Recruitment and Retention

A major focus of your HR planning should be to bring the right employees on board and to keep them. Using the job descriptions and competencies you developed during your organization planning, review industry compensation standards to determine what your company needs to spend to properly fill each position. An HR department then places ads, reviews candidates, interviews them, performs background and reference checks and then hires them. HR creates plan for training and managing employees, including giving reviews, promotion and setting termination procedure. As part of the retention-management process, HR develops morale and wellness programs.


Like any other department your HR function should operate using a budget, and all of its planning activities must take into account your company’s income and expenses. You might give your HR director a budget based on a percentage of revenues or profits, or a fixed budget you set at the beginning of the year. In other instances, your HR person might give you a list of options for filling a position or instituting a management program, letting you decide how much you want to spend, based on what you’ll get.