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Strategic Human Resource Planning

Strategic HR planning predicts the future HR management needs of the organization
after analyzing the organization's current human resources, the external labor market and the
future HR environment that the organization will be operating in. The analysis of HR
management issues external to the organization and developing scenarios about the future are
what distinguishes strategic planning from operational planning
Human Resource Planning:
The ongoing process of systematic planning to achieve optimum use of an
organization's most valuable asset its human resources. (Bulla & Scout 1994)
Strategic Planning:
Strategic planning is the determination of the overall organizational purpose and
goals and how they are to be achieved
Strategic Human Resource Planning:
Integrating human resource management strategies and systems to achieve the
overall mission, strategies, and success of the firm while meeting the needs of employees and
other stakeholders.(Schwimd,Das,&Wagar.n.d.)
Description:
Strategic HR planning is an important component of strategic HR management. It
links HR management directly to the strategic plan of your organization. Most mid- to large
sized organizations have a strategic plan that guides them in successfully meeting their
missions. Organizations routinely complete financial plans to ensure they achieve
organizational goals and while workforce plans are not as common, they are just as
important.
Even a small organization with as few as 10 staff can develop a strategic plan to guide
decisions about the future. Based on the strategic plan, your organization can develop a
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strategic HR plan that will allow you to make HR management decisions now to support the
future direction of the organization. Strategic HR planning is also important from a budgetary
point of view so that you can factor the costs of recruitment, training, etc. into your
organization's operating budget.
Organizational Objectives for HR Strategies:
The human resources practitioner should ensure that the HR Strategy is integrated
with broader organizational objectives. Above all, it should ensure that the rest of the
organization accepts the Strategy. To achieve this objective, practitioners should:-
1.consult all stakeholders on the nature of the strategy;
2.cultivate and develop allies and supporters of the strategy through the consultation
process;
3.focus on the benefits which are being derived from the strategy through talking to
and persuading others, and by marketing the benefits of the strategy with concrete
examples of how it has helped;
4.check that there is real commitment to the strategy at all levels of the organization;
5.give regular feedback on the implementation of the plan through employee
newsletters, exhibitions etc;
6.where possible, build into the strategy quantifiable outcomes which can be easily
monitored and evaluated, so that it is possible to show the effect;
7.Make the strategy part of the induction process - especially for senior managers.
A Strategic Human Resource Planning Model:
There is no single approach to developing a Human Resources Strategy. The specific
approach will vary from one organization to another. Even so, an excellent approach towards
an HR Strategic Management System is evident in the model presented below. This approach
identifies six specific steps in developing an HR Strategy:-
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1.Setting the strategic direction
2.Designing the Human Resource Management System
3.Planning the total workforce
4.Generating the required human resources
5.Investing in human resource development and performance
6.Assessing and sustaining organizational competence and performance










Strategic Human Resource Planning Process (SHRPP):
Strategic human resource management is the process by which managers design the
components of an HRM system to be consistent with each other, with other elements of
organizational architecture, and with the organization's strategy and goals. The objective of
strategic HRM is the development of an HRM system that enhances an organization's
efficiency, quality, innovation, and responsiveness to customers. Strategic human resource
planning (SHRP) involves five distinct stages:
1. Assessing the current HR capacity
2. Situational Analysis/Environmental Scanning
3. Forecasting HR requirements
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4. Gap analysis
5. Developing HR strategies to support organizational strategies
Assessing Current HR Capacity:
Based on the organization's strategic plan, the first step in the strategic HR planning
process is to assess the current HR capacity of the organization. The knowledge, skills and
abilities of your current staff need to be identified. This can be done by developing a skills
inventory for each employee.
The skills inventory should go beyond the skills needed for the particular position.
List all skills each employee has demonstrated. For example, recreational or volunteer
activities may involve special skills that could be relevant to the organization. Education
levels and certificates or additional training should also be included.
An employee's performance assessment form can be reviewed to determine if the person is
ready and willing to take on more responsibility and to look at the employee's current
development plans.
Situational Analysis/Environmental Scanning:
The first stage of HR planning is the point at which HRM and strategic planning
interact. Environmental scanning helps HR planners identify and anticipate sources of threats
and opportunities and should drive the organization's strategic planning. The strategic plan
must adapt to environmental circumstances, and HR planning is one of the primary
mechanisms that an organization can use to accomplish this adaptation process.
Forecasting HR requirements:
The next step is to forecast HR needs for the future based on the strategic goals of the
organization. Realistic forecasting of human resources involves estimating both demand and
supply.

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Gap analysis:
The next step is to determine the gap between where your organization wants to be in
the future and where you are now. The gap analysis includes identifying the number of staff
and the skills and abilities required in the future in comparison to the current situation. You
should also look at all your organization's HR management practices to identify practices that
could be improved or new practices needed to support the organization's capacity to move
forward.
Developing HR Strategies to Support Organizational Strategies:
There are five HR strategies for meeting your organization's needs in the future:
1.Restructuring strategies
2.Training and development strategies
3.Recruitment strategies
4.Outsourcing strategies
5.Collaboration strategies
Restructuring Strategies:
This strategy includes:
1.Reducing staff either by termination or attrition
2.Regrouping tasks to create well designed jobs
3.Reorganizing work units to be more efficient
If your assessment indicates that there is an oversupply of skills, there are a variety of options
open to assist in the adjustment. Termination of workers gives immediate results. Generally,
there will be costs associated with this approach depending on your employment agreements.
Notice periods are guaranteed in all provinces. Be sure to review the employment and labor
standards in your province or territory to ensure that you are compliant with the legislation.

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Training and development strategies:
This strategy includes:
1.Providing staff with training to take on new roles
2.Providing current staff with development opportunities to prepare them for future
jobs in your organization.
Recruitment strategies:
This strategy includes:
1.Recruiting new staff with the skill and abilities that your organization will need in
the future.
2.Considering all the available options for strategically promoting job openings and
encouraging suitable candidates to apply.
For strategic HR planning, each time you recruit you should be looking at the
requirements from a strategic perspective. Perhaps your organization has a need for a new
fundraiser right now to plan special events as part of your fundraising plan. However, if your
organization is considering moving from fundraising through special events to planned
giving, your recruitment strategy should be to find someone who can do both to align with
the change that you plan for the future.
Outsourcing strategies:
This strategy includes:
1. Using external individuals or organizations to complete some tasks
Many organizations look outside their own staff pool and contract for certain skills.
This is particularly helpful for accomplishing specific, specialized tasks that don't require
ongoing full-time work.


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Collaboration strategies:
The strategic HR planning process may lead to indirect strategies that go beyond your
organization. By collaborating with other organizations you may have better success at
dealing with a shortage of certain skills.
Types of collaboration could include:
1.Working together to influence the types of courses offered by educational
institutions
2.Working with other organizations to prepare future leaders by sharing in the
development of promising individuals
3.Sharing the costs of training for groups of employees
4.Allowing employees to visit other organizations to gain skills and insight.
Techniques of Forecasting:
Several techniques of forecasting human resource requirements and availability are
currently used by those in the profession.
Zero Based Forecasting:
This method uses the organizations current level of employment as the starting point
for determining future staffing needs. The key to zero-base forecasting is a thorough analysis
of human resource needs.
Bottom-Up Approach:
A forecasting method in which each successive level of the organization, starting with
the lowest, forecasts its employee requirements in order to, ultimately, provide an aggregate
forecast of employment needs.
Use of Mathematical Models:
Mathematical models can assist in forecasting HR requirements. The relationship
between sales demand and the number of employees needed is a positive one.
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Simulation:
Simulation is a technique for experimenting with a real-world situation through a
mathematical model representing that situation. A model is an abstraction of the real world.
Forecasting Human Resource Requirements:
A requirements forecast is an estimate of the numbers and kinds of employees the
organization will need at future dates in order to realize its goals.
Forecasting Human Resource Availability:
Determining whether the firm will be able to secure employees with the necessary
skills and from what sources these individuals may be obtained is called an availability
forecast.
Implementing the Strategic HR Plan:
Once the HR strategic plan is complete the next step is to implement it:
Agreement with the plan:
Ensure that the board chair, executive director and senior managers agree with the
strategic HR plan. It may seem like a redundant step if everyone has been involved all the
way along, but it's always good to get final confirmation.
Communication:
The strategic HR plan needs to be communicated throughout the organization. Your
communication should include:
1.How the plan ties to the organization's overall strategic plan?
2.What changes in HR management policies, practices and activities will be made to
support the strategic plan?
3.How staff will be supported through any changes?
4.How the organization will be different in the future?
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Legislation and Mandate:
Ensure that the actions you are considering are compliant with existing laws,
regulations and the constitution and bylaws of your organization.
Organizational Needs:
Whether you are increasing or reducing the number of employees, there are
implications for space and equipment, and on existing resources such as payroll and benefit
plans.
Evaluation:
HR plans need to be updated on a regular basis. You will need to establish the
information necessary to evaluate the success of the new plan. Benchmarks need to be
selected and measured over time to determine if the plan is successful in achieving the
desired objectives.
Task Of Creating A Strategic Human Resource Planning Requires:
1.Facilitation Skills
2.Time
3.Commitment, and
4.Perseverance
Developing an effective organizational strategy (or organizational content) will result in
the following benefits and is well worth the effort.
1.A shared vision and/or values
2.An understanding of and commitment to the mission at all levels of the organization
3.A strategic direction or an effectively developed strategic path
4.Improved alignment between shared vision, values, structure and systems
5.An organizational structure (functions, roles, responsibilities, and levels of
authority) and systems that serve and reinforce the strategies of the department
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6.A management philosophy that is congruent with shared vision and values and a
style that consistently embodies the vision and values of the mission statement
7.Employees whose knowledge, skills and attitude match the desired style
8.High trust among staff that results in open communications, effective problem-
solving and the presence of cooperation and teamwork
9.Personal integrity in that the values of the organization and the habits of individuals
are integrated.
Conclusion:
In short a company may choose to follow best practice if it suits the strategy of the
organization. A company can adopt an HRM model that best fits its current status or strategic
plans. In both cases the organizational strategy drives the possible and practical HRM
style.HRM can be strategic when the organization differentiates its HRM practices to gain
competitive advantage. It takes a risk when it does this, but could potentially lead the market
if it gets the balance right. Not all organizations have the opportunity to do this while others
wouldnt see sufficient benefit from HRM innovation. However, those organizations that do
use strategic HRM could find that it gives them a real and sustainable competitive advantage.