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 Keeping the Right People
 Overview
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 Overview
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 Staff-Volunteer Relations
 Workplace Wellness
 Workplaces that Work -
Case Study Series
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Home » Resource Centre » HR Toolkit » HR Planning » Strategic HR Planning

HR Planning
Strategic HR Planning
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 it in successfully
meeting its mission. 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.

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.
Source: Herman Schwind, Hari Das and Terry Wagar, Human Resource Management: A Strategic
Approach.

In this Section:
 Introduction to strategic HR planning
 The strategic HR management planning
process
 Documenting the strategic HR plan

Implementing the strategic HR plan

Related HR Management Standard:

Standard 3.2
What is this? All employees have a work plan and performance
objectives that identify the tasks/activities and
expected results for future performance.

Introduction to strategic HR planning


The overall purpose of strategic HR planning is to:

 Ensure adequate human resources to meet the strategic goals and operational plans
of your organization - the right people with the right skills at the right time
 Keep up with social, economic, legislative and technological trends that impact on
human resources in your area and in the sector
 Remain flexible so that your organization can manage change if the future is
different than anticipated
Strategic HR planning predicts the future HR management needs of the organization
after analyzing the organization's current human resources, the external labour
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. The basic questions to be answered for strategic planning are:

 Where are we going?


 How will we develop HR strategies to successfully get there, given the
circumstances?
 What skill sets do we need?

Related HR Management Standard:

Standard 6.1
What is this? The organization has a process to review staffing
needs resulting in a plan to address those needs.

Back to top

The strategic HR planning process


The strategic HR planning process has four steps:

1. Assessing the current HR capacity


2. Forecasting HR requirements
3. Gap analysis
4. 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.

 How will the external environment impact on our HR needs?

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:

1. Restructuring strategies
2. Training and development strategies
3. Recruitment strategies
4. Outsourcing strategies
5. 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
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 labour standards in your province or territory to
ensure that you are compliant with the legislation.

Termination packages are governed by case law as well as by employment standards


legislation (which only states the bare minimum to be paid). Consult with a lawyer to
determine the best approach to termination packages.

Attrition - not replacing employees when they leave - is another way to reduce staff.
The viability of this option depends on how urgently you need to reduce staff. It will
mean that jobs performed in the organization will have to be reorganized so that
essential work of the departing employee is covered. Careful assessment of the
reorganized workloads of remaining employees should include an analysis of
whether or not their new workloads will result in improved outcomes.

It is important to consider current labour market trends (e.g., the looming skills
shortage as baby boomers begin to retire) because there may be longer-term
consequences if you let staff go.

Sometimes existing workers may be willing to voluntarily reduce their hours,


especially if the situation is temporary. Job sharing may be another option. The key
to success is to ensure that employees are satisfied with the arrangement, that they
confirm agreement to the new arrangement in writing, and that it meets the needs of
the employer. Excellent communication is a prerequisite for success.

Caution must be taken when considering the voluntary reduction of hours by existing
staff. A change in working conditions (e.g. hours worked per week) can be considered
"constructive dismissal" - especially in the case of permanent staff. Ensure that you
obtain legal advice and there is full written documentation.

Your analysis may tell you that your organization may have more resources in some
areas of the organization than others. This calls for a redeployment of workers to the
area of shortage. The training needs of the transferred workers needs to be taken into
account.

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
Training and development needs can be met in a variety of ways. One approach is for
the employer to pay for employees to upgrade their skills. This may involve sending
the employee to take courses or certificates or it may be accomplished through on-
the-job training. Many training and development needs can be met through cost
effective techniques. See the HR Toolkit section on Learning, Training and
Development for more information.

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.

When deciding to outsource to an individual, ensure you are not mistakenly calling
an employee a consultant. This is illegal and can have serious financial implications
for your organization. To understand the differences between employees and self-
employed people, visit the Canada Revenue Agency's website.

Each outsourcing decision has implications for meeting the organization's goals and
should therefore be carefully assessed.
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

ABC Social Services provides support services to families in need. It has reviewed and
updated its strategic plan. As part of the strategic planning process the Board
Planning Committee learned that 15% of their social workers are planning to retire
over the next two years and recruitment of social workers has become increasingly
competitive.

Outcome of the strategic planning process: One strategy developed by the Board
Planning Committee is to make ABC Social Services a preferred employer among
organizations in the area.

Possible HR planning strategies to meet this organizational strategy are:

 Develop a recruitment and retention strategy based on discussions with the


social workers. Items to consider are: flexible work arrangements; contracting
with a counselor for the social workers on an as-needed basis (give them
someone to talk to about the stresses of the job); provide professional
development opportunities that give them increased skills for dealing with the
issues their clients face.
 Tie the pay scale of the social workers to the pay scales of social workers
working for the municipality (the appropriate percentage to be determined.
For example, the pay of social workers in the organization may be tied at 90%
of the pay at the municipal level).
 Provide placements for social work students and show them that ABC Social
Service would be an excellent employer after graduation.
 Decide the unique strategies that you will use to position yourself as an
employer of choice, based on needs of your employees and potential
candidates.

Back to top

Documenting the strategic HR plan


Once the strategies for HR in your organization have been developed they should be
documented in an HR plan. This is a brief document that states the key assumptions
and the resulting strategies along with who has responsibility for the strategies and
the timelines for implementation.

Back to top

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 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:

 How the plan ties to the organization's overall strategic plan


 What changes in HR management policies, practices, and activities will be made to
support the strategic plan
 How any changes in HR management will impact on staff including a timeframe if
appropriate
 How each individual member of staff can contribute to the plan
 How staff will be supported through any changes
 How the organization will be different in the future
It is impossible to communicate too much (but all too easy to communicate too
little), especially when changes involve people. However, the amount of detail should
vary depending upon the audience.

Legislation and mandate


Ensure that the actions you are considering are compliant with existing laws,
regulations and the constitution and bylaws of your organization.

To review laws relating to employment, visit the HR Toolkit section on Employment


Legislation and Standards

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.

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Labour Force Matters
The Nonprofit Labour Force Nonprofit Labour Force Statistics Toward a Labour Force
Strategy
HR Resource Centre
Resource Centre Home HR Management Standards HR Toolkit ACCESS Shared HR
Services Framework
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Resource Centre
 Resource Centre Home
 HR Management Standards
 HR Toolkit
 HR Toolkit Home
 Overview
 About the HR Toolkit
 HR Planning
 Overview
 Strategic HR Planning
 Operational HR Planning
 Succession Planning
 Risk Management in HR
 The Board's Role in HR
 HR Policies & Employment Legislation
 Overview
 Developing HR Policies
 Sample Policies on Common HR Topics
 Employment Legislation & Standards
 Human Rights Legislation
 Health & Safety Legislation
 HR in a Unionized Workplace
 Leaves of Absence
 Getting the Right People
 Overview
 Laying the Groundwork
 Job Descriptions
 Recruitment
 Selection & Hiring
 Hiring an Executive Director
 Orientation
 Non-standard Employment
 Keeping the Right People
 Overview
 Employee Engagement & Retention
 Employee Recognition
 Performance Management
 Supervision
 Discipline
 Employment Termination
 Exit Interviews
 Compensation & Benefits
 Overview
 Compensation Systems: Design and Goals
 Wages and Salaries
 Salary Surveys
 Statutory Benefits
 Employee Benefits
 Diversity at Work
 Overview
 Legislation and Policies
 Supporting Employees With Disabilities
 Supporting Employees From Different Cultural Backgrounds
 Supporting Employees From the GLBTQ Community
 Generational Differences in the Workplace
 Gender Equity
 Workplaces That Work
 Overview
 Conflict at Work
 Effective Meetings
 Flexible Work Arrangements
 Interpersonal Communication
 Productive Work Teams
 Staff-Volunteer Relations
 Workplace Wellness
 Workplaces that Work -
Case Study Series
 Learning, Training & Development
 Overview
 Factors Affecting Working & Learning
 Getting Your Organization Ready for Employee Training & Development
 Understanding the Employee as an Adult Learner
 Implementing an Employee Training & Development Program
 Resources & Downloads
 Overview
 Resource Overview
 Links
 ACCESS
 Shared HR Services Framework
Home » Resource Centre » HR Toolkit » HR Planning » Operational HR planning

HR Planning
Operational HR Planning
All organizations engage in HR planning at an operational level - even those that do not have a
strategic plan. At the operational level, good HR planning is in part based on thinking ahead
about the organization.

At an operational level, organizations put in place HR management practices to support


management and staff in achieving their day-to-day goals. Whether it's determining how many
staff are needed to deliver services over the next year or how performance will be monitored, HR
management practices and activities need to be planned to answer the question: "Where is our
organization going and how will it get there?"

The HR Toolkit has detailed information that you can use to develop an operational plan for your
human resources practices and activities. Topics include:

 Employment Legislation and Standards


 Guideline to Developing HR Policy
 Getting the Right People
 Learning, Training and Development
 Compensation and Benefits
 Keeping the Right People
If your organization already has good HR management practices in place they should be reviewed
on an ongoing basis, every two to three years, to ensure that they still meet organizational needs
and comply with legislation.

At an operational level, organizations also need to be aware of the interdependencies between


operational decisions and HR management practices. Decisions made on one aspect of human
resources often have an impact on another aspect of HR management.

Related HR Management Standards:

Standard 3.2
What is this? All employees have a work plan and performance
objectives that identify the tasks/activities and expected
results for future performance.

Standard 6.1
The organization has a process to review staffing needs
resulting in a plan to address those needs.
Operational objective: Expand the services offered over the next two years

Human resources requirement: Five new staff members

Operational decision: Hire recent graduates or others with little direct work experience to
reduce hiring costs

Implications for HR management practices: The operational decision to hire new


graduates will impact on practices such as:

 Supervision - there will be a need for more supervision


 On-the-job training - there will be a need for increased training

Operational objective: Reduce staffing costs

Human resources requirement: Reduce staff by two fulltime equivalents

Operational decision: The reduction in staff will be made by not renewing the contract for two
term employees

Implications for HR management practices: The operational decision to not renew two
contract positions will impact on issues and practice such as:

 Staff morale - the work of contract employees will have to be assessed to


determine which positions to terminate so that the impact on the clients and
organization is minimized; support may be needed for the employees who
remain
 Job design - other positions will need to be reviewed to determine which staff,
if any, have the knowledge and skills to take over the essential work of the
positions that are being eliminated; changes to the duties for existing staff will
need to be negotiated
 Training - training will need to be provided to staff taking on new duties, if
appropriate
 Termination process and cost – the termination process will need to be
planned to ensure that it complies with policies and legislation and there will
likely be a cost for notice and severance pay

In the absence of a strategic plan your organization can still take a proactive approach to HR
management. By developing good HR management practices and thinking ahead, you can create
a good work environment where staff can be productive and focus on providing the best possible
service.

Next Section: Succession Planning


Looking for a specific checklist, tool, template or sample policy?

Find it fast in the Resource Index.

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Disclaimer | Privacy Statement Canada's Sector
Council Program

Next Section: Operational HR Planning

Looking for a specific checklist, tool, template or sample policy?

Find it fast in the Resource Index.


Funded by the
Copyright © HR Council for the Nonprofit Sector | Content Government of
Disclaimer | Privacy Statement Canada's Sector
Council Program

Human Resource Planning : Human resource planning is the term used to


describe how companies ensure that their staff are the right staff to do the jobs. Sub
topics include planning for staff retention, planning for candidate search, training
and skills analysis and much more.

Top : Human Resource Planning : Page 2

Strategic Planning and Business Planning Free


Resource Center : Human Resource Planning
Learning Resources:

Improving Employee Morale


By David Javtich Squash negative attitudes in the workplace and get your

employees motivated again. (Added: 3-Apr-2006 Hits: 701)


How Boomers Will Change Your Firm
By Tracey Longo What will your firm look like in 2015? With about 75 million

baby boomers retiring, different than than it does now (Added: 12-Jun-2005 Hits: 597)

It's Spring - Time For A Compensation Program Tune Up (Expert


Advice)
By Sharon Terry One of the primary responsibilities of a Human Resources

department is ensuring that the company's employees are compensated


equitibly. According to this article, using the current market to determine
salary adjustments is not sufficient. Listed within, are some other aspects and
methods to consider when you are planning compensation changes. (Added: 4-

Oct-2005 Hits: 438)

The Challenges of Human Resource Management (Expert


Information)
By Alvin Chan This article discusses how a Human Resource manager can

meet the challenges of today's workplace diversity. Also discussed are: how
to motivate employees using various strategies. HR's strategic role in an
organization's success is recognized. (Added: 4-Oct-2005 Hits: 1658)

HR technology planning trips up


By Craig Donaldson (Very short) While technology has become an

indispensable part of the HR function, many organisations are failing to fully


leverage existing HR technology investments due to a lack of planning. A
recent survey of more than 65 Australian companies found that when
undertaking a HR technology project, successful companies spent a minimum
of 25 per cent and up to 50 per cent of project time and resources on
planning. (Added: 27-Mar-2005 Hits: 644)


Are There Any Best Practices For Succession Planning?
By Robert Bacal Looking for best practices based on research identifying

zcompanies that are best at succession planning? Here's a starting point.

(Added: 21-Sep-2006 Hits: 631)

Human Resource Planning : Human resource planning is the term used to


describe how companies ensure that their staff are the right staff to do the jobs. Sub
topics include planning for staff retention, planning for candidate search, training
and skills analysis and much more.

Top : Human Resource Planning

Strategic Planning and Business Planning Free


Resource Center : Human Resource Planning
Learning Resources:

When doing an external scan of the environment for purposes of


human resources planning (HR planning), what things should we
look at?
By Robert Bacal n order to do human resource planning, you need to have a

sense of both the current external environment, and anticipate things that
may happen in the future in the labor market place. You do this via an
external scan or environmental scan that can address the following issues and
questions (Added: 13-Sep-2006 Hits: 611)

Human Resources From Scratch


By Jeffrey Klineman Many small nonprofit organizations, like Ms. Alvarado's,

are now placing a priority on building their in-house human-resources


expertise. Knowing when to add a manager or create a department to handle
benefits, salary data, hiring and firing, and other sensitive administrative
issues can be a challenge for a growing organization. Equally daunting, say
nonprofit managers who have stepped into the role, is running an operation
on a charity's tight budget -- or being assigned the job without having had
any experience in the field of human resources. (Added: 20-Jun-2005 Hits: 1800)

Human Resource Planning In Health Care


By B. Ray Human beings are the most important resources in health care.

Machines and gadgets which are integral parts of health care require the
human touch, expertise, and commitment for their full utility and application
in delivery of health care. Therefore planning of human resources is the key
to any health care provision. The objective of human resource (HR) policy is
to a) attract, recruit, retain and develop competent personnel and b) create a
continuously learning health care organisation. (Added: 23-Mar-2005 Hits: 918)

How is human resource planning linked to overall strategic


planning?
By Robert Bacal Is there a relationship between overall corporate strategic

planning and HR planning? You bet, and you need to understand the link.
(Added: 13-Sep-2006 Hits: 1707)

The Next Generation of Hiring Metrics


By Charlotte Garvey New tools and approaches are helping HR achieve a

deeper understanding of the value of an organization's hiring practices. See


what the new tools are and how they can help you make more effective hiring
decisions. (Added: 27-Feb-2006 Hits: 936)

Workforce Planning: The Strategy Behind “Strategic Staffing”


By Christina Morfeld This article presents several compelling reasons to

undertake a workforce planning initiative, outlines the four-step process, and


offers valuable "best practices" for optimal results. (Added: 14-Sep-2002 Hits: 3514)

HR technology planning trips up

by Craig Donaldson

WHILE technology has become an indispensable part of the HR function, many organisations are failing
to fully leverage existing HR technology investments due to a lack of planning.

A recent survey of more than 65 Australian companies found that when undertaking a HR technology
project, successful companies spent a minimum of 25 per cent and up to 50 per cent of project time
and resources on planning.

In successfully leveraging HR technology investments, key planning areas include process optimisation
and proper change management activities, according to Kathy McRae, practice leader for technology
solutions at Watson Wyatt Australia, which conducted the survey.

“This is not just project management. It means working out what you are trying to achieve up front,
how this differs from where you are now (in terms of people, process and technology) and then how you
are going to get there,” she said.

With 94 per cent of companies planning further HR technology projects this year, the Australian eHR
survey also found that 63 per cent agreed that HR technology helped them focus on more strategic
activities and a further 62 per cent agreed that the technology enabled better quality service to their
organisation.

However, there was a continuing problem with underutilised functionality within HRMS technology, with
more than 90 per cent of organisations still purchasing modules that are either rarely or never used.

The survey found that modules most commonly underutilised include career planning (88 per cent),
incentive management (58 per cent), performance management (47 per cent) and recruitment (44 per
cent).

“Too many people get caught up by the exciting software they see, without thinking about how they can
make it work in their organisations,” McRae said.

“They need to understand that functionality is only as valuable as the data that is supporting it, and the
way in which users can access it.

“Don’t sacrifice integration or functionality. There no longer needs to be a trade-off between these two
items.”
The survey also dispelled the single vendor myth, with no hard evidence that a single HRMS vendor can
meet all the HR functional needs of an organisation.

“Our survey showed quite clearly that not one participant had been able to meet every HR technology
need with one single solution,” said McRae. “The most successful survey respondents were those who
chose an optimal mix of vendors.”

Aside from spending significant time and resources in planning, the most successful organisations also
automated significantly more HR functions than average performers, namely eRecruitment, rostering
and online information and services such as ESS and MSS.

How is human resource planning linked to


overall strategic planning?

Navigate Strategic Planning


Frequently Asked Questions and
Answers

General Questions
Strategic Planning Terms and Definitions
Creating A Strategic Plan - How To...
Understanding Strategic Goals, Objectives,
and Business Goals
Implementing The Strategic Plan - How To
Strategic Planning Tools
Strategic Thinking and Business Strategy
Human Resource Planning (HR Planning)
Planning For Webmasters and Business On
The Internet

Particularly for those working in HR departments, it's easy to forget that HR


planning (and HR functions) do not exist as ends in themselves, but exist to
serve the rest of the organization in achieving the business goals of the
organization. Often HR functions and human resource planning get
accidentally de-linked from business goals.
Since human resources functions and strategies are a means to achieve
corporate ends, they need to be tied to, and driven by the corporate role,
mission, vision and strategic goals, or else they simply end up as processes
that add overhead, but down increase return.

The solution is obvious. Human resource planning needs to reference the


details of the overall strategic plan of the organization. In effect, it serves
the strategic plan