Human Resource Planning

When an entrepreneur decides he needs to hire someone to help with certain tasks, or a huge corporation decides to hire someone else to help out in any department, those are decisions that resulted from human resources planning. While a small business might not actually follow a formalized process of this planning, simply the act of deciding someone needs to be hired and determining what qualifications they should have is a simplified form of this planning. Most larger companies and corporations do follow certain steps each time they determine the need to hire (they even perform HR audits to help them), or look into whether or not they should hire, a new employee.

Beyond Basic Human Resources Planning

Looking into whether or not a person should be brought into the company is typically the first step in a corporation's plan. Once the decision is made that yes, a new employee should be hired, the planning phase is not over (not if you want to maximize employee productivity). Human resources planning refers to a much broader plan that includes not just deciding and hiring, but how to get the best people and attract them to work in that company instead of somewhere else.

The HR plan and process doesn't stop once a new person is hired. Retention is a key component of good human resources planning, too. Human resources—employees—are one of the biggest expenses in any company. The process of advertising a job and recruiting, interviewing, hiring and training is a huge investment. This takes time and man hours by those employees who see to the hiring and training process. A company that can retain the employees it hires will put out far less money on the whole process. A company that has a high turnover rate, on the other hand, is spending money on this process much more often, and that cuts into a company's bottom line.

Even if you discount the money and man hours spent hiring and training, there are other financial drawbacks to hiring each new person. Because a new person has to get used to the new job and the atmosphere, new hires will typically not reach the working efficiency of a trained and adjusted employee for at least a few months. This can take even longer, depending on the job and its complexity. This results in lost income and higher costs, until that employee is working at top efficiency. Companies that have high turnover because of poor human resources planning often see these new employees leave before they reach top efficiency or shortly after they do, resulting in a huge cost with little benefit besides filling a position for a short while.

Companies that don't follow good planning practices will be forced to react to situations instead of take charge of them. For instance, a company that doesn't have a good grasp on what it takes to manage human resources may find that a position needs to be filled. The focus will be on filling that position as quickly as possible, instead of the strategies that could be used to make sure the ideal person gets that position rather than just someone who could do the job.

Using good strategies to get the right person and give them incentives to stay and do a good job will give the company better talent and higher retention, thereby lowering costs and creating a better atmosphere of morale within the company.

Good human resources planning also can eliminate things like huge job cuts to cut costs. Companies that value their employees and have each one in the right position will find that each person pulls his or her weight, and that cutting them will be to the detriment of the company. If a company can cut huge amounts of staff with no or little loss in business operations and efficiency, then the planning was done poorly from the beginning to allow too many staff that are unnecessary. Companies that plan well from the beginning typically find other ways to cut costs thanks to the innovative and forward-thinking staff they've hired.

Human Resources Planning for the Future

People who work in human resources and those charged with human resources planning do the best job for their companies by looking at the company's long-term goals before formulating a plan. A company that has an unclear goal or plan won't be able to anticipate its human resources needs in the future. Deciding the skills that future employees should have will be difficult when the company managers aren't sure where the organization is headed.

So human resources planning can be done most effectively when the other departments such as product development, sales and marketing have clear plans and goals for the future. Determining where a company is headed is necessary in determining the skills, talents and achievements of the people that the company may need to hire in the future, as well as the skills current employees should have and the skills they might need to acquire to keep the company moving forward.