Strategic HR Planning

Strategic HR management is defined as:

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.
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 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.

The Strategic HR Planning Process

The strategic HR planning process has four steps:
Assessing the current HR capacity
Forecasting HR requirements
Gap analysis
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.

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. Questions to be answered include:
How many staff will be required to achieve the strategic goals of the organization?
What jobs will need to be filled?
What skill sets will people need?
When forecasting demands for HR, you must also assess the challenges that you will have in meeting your staffing need based on the external environment. To determine external impacts, you may want to consider some of the following factors:
How does the current economy affect our work and our ability to attract new employees?
How do current technological or cultural shifts impact the way we work and the skilled labor we require?
What changes are occurring in the Canadian labor market?
How is our community changing or expected to change in the near future?
Why diversity at work matters

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. Questions to be answered include:
What new jobs will we need?
What new skills will be required?
Do our present employees have the required skills?
Are employees currently in positions that use their strengths?
Do we have enough managers/supervisors?
Are current HR management practices adequate for future needs?

Developing HR Strategies to Support Organizational Strategies

There are five HR strategies for meeting your organization's needs in the future:
Restructuring strategies
Training and development strategies
Recruitment strategies
Outsourcing strategies
Collaboration strategies

1. Restructuring Strategies

This strategy includes:
Reducing staff either by termination or attrition
Regrouping tasks to create well designed jobs
Reorganizing work units to be more efficient

2. Training and Development Strategies

This strategy includes:
Providing staff with training to take on new roles
Providing current staff with development opportunities to prepare them for future jobs in your organization

3. Recruitment Strategies

This strategy includes:
Recruiting new staff with the skill and abilities that your organization will need in the future
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.

4. Outsourcing Strategies

This strategy includes:
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.
Some organizations outsource HR activities, project work or bookkeeping. For example, payroll may be done by an external organization rather than a staff person, a short term project may be done using a consultant, or specific expertise such as legal advice may be purchase from an outside source.

5. Collaboration Strategies

Finally, 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:
Working together to influence the types of courses offered by educational institutions
Working with other organizations to prepare future leaders by sharing in the development of promising individuals
Sharing the costs of training for groups of employees
Allowing employees to visit other organizations to gain skills and insight