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creating a strategic hr plan

HR strategy

Human resource (HR) strategy maximizes the potential of an organization’s human capital so it can achieve its broader business objectives. For some employers, however, transitioning HR from a purely transactional function to a strategic one can be challenging. But considering the competitive advantages enjoyed by talent-driven organizations, it’s an obstacle worth overcoming.

What is an HR strategy?

HR strategy is a roadmap for solving an organization’s biggest challenges with people-centric solutions. This approach requires HR input during policy creation and elevates the importance of recruitment , talent management , compensation, succession planning and corporate culture.

HR Strategy

Why is HR strategy important?

Without strategy behind it, HR remains an administrative function and business growth may be hindered. Consider, for instance, two different companies that would like to expand into new markets.

One of them is strategic and gives HR a seat at the table from the very beginning. It researches locations that would be the most advantageous from an employment standpoint and then develops a long-term plan for networking highly-qualified, passive candidates in the chosen regions.

The other company takes transactional approaches to solving problems. Instead of including HR in its expansion discussions, it delegates a hiring manager to recruit candidates without knowing if the desired talent exists in that market or if the employment rules add a significant number of unexpected obstacles.

As the first example shows, when HR is involved and integrated at many levels of an organization, it can create a powerful advantage.

How to create a human resource strategy

Creating an HR strategy means taking a hard look at an organization’s strengths, weakness, opportunities and threats – a process also known as a SWOT analysis. Every business is different, but most follow these steps:

What are the benefits of strategic human resources planning?

One of the primary benefits of syncing HR strategy with broader business initiatives is that it helps organizations allocate budgets in ways that will maximize their return on investment (ROI). Employers who take this approach to HR, may also be able to:

Best practices for implementing an HR strategy

Everyone has fires to put out, which is why being proactive rather than reactive in the workplace does not always come naturally. The good news, however, is that HR experts have perfected some tried and true methods for implementing strategy effectively. Best practices are to:

Frequently asked questions

What are strategic hr functions.

Examples of strategic HR functions include compensation planning, recruitment, succession planning and employee development.

What are four human resource strategies?

What are the types of HR strategy?

There are essentially two types of HR strategies – those that are overarching and those that are specific. Overarching strategies apply to the management of an organization’s people as a whole, while specific strategies address subsets of HR, like talent management or recruitment.

How do you develop a strategic HR plan?

A strategic HR plan can be created by thoroughly evaluating an organization’s strengths, weaknesses, opportunities and threats. This is known as a SWOT analysis. Once employers know this information, they can create realistic goals that account for what they do well and where they need improvement .

This article offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.

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5 Steps To Developing A Strategic HR Plan

Apr 18, 2018 | Blog

You’ve heard it before, and you’ll hear it again – every business needs a strategic plan.

The most successful companies develop and implement an effective strategic plan to help them pursue their organizational goals. But, even the best strategic plan won’t be very effective if the human resources function isn’t in alignment with it.

A Strategic HR Plan is a tool to help businesses align their organizational goals with their HR capabilities , and every business should have one in place to support the growth outlined in their strategic plan.

If you haven’t developed a Strategic HR Plan for your business (or if you’re still not quite sure what it is!), don’t worry!

Below we share our 5 Steps To Developing A Strategic HR Plan to help you effectively support and achieve your organization’s strategic goals.

If you’re interested in learning more about developing a  Strategic HR Plan  or a Strategic Plan for your business,   schedule an appointment with one of our HR professionals   or give us a call at 877-753-0970 .

What is a Strategic HR Plan?

A Strategic HR Plan helps organizations to align human resources to corporate strategy. It is an essential planning document built upon the corporate mission, vision, values, and goals established in the strategic business plan.

It provides information on how the HR function will support the goals and strategies of the organization, while also ensuring that HR planning and practices are consistent.

The ideal Strategic HR Plan outlines how the gaps between present and future capabilities will be addressed, enabling businesses to effectively pursue their company goals.

Why develop a Strategic HR Plan?

In most organizations, managers have a responsibility to fulfill expectations in the areas of corporate governance, transparency of policies, accountability, and economic efficiency.

For your business to be successful in these areas, you need to have the right people, with the right skills, in the right place, at the right time to carry out the strategy.

A comprehensive Strategic HR Plan will ensure that you have the capacity to deliver on strategy and the ability to monitor progress towards your organization’s goals. It should also establish:

How do you create a Strategic HR Plan?

The process for developing a Strategic HR Plan begins by identifying where your organization is now in the life-cycle of an enterprise: the start-up stage, the growth stage, the mature stage, or the decline stage.

Once you’ve decided where your company is today, formulate a clear picture of your company’s future along with ways to get there. Your Strategic HR Plan will be built upon the foundation of this strategic business plan.

Step 1: Identify Future HR Needs

Using your business’ strategic plan as a guide, identify the future HR needs of the organization. Ask questions like:

Step 2: Consider Present HR Capabilities

Now consider your company’s present HR situation by asking questions like:

Step 3: Identify Gaps Between Future Needs & Present Capability

Compare your future HR needs from step 1 with your present HR capabilities from step 2, and identify any significant gaps that appear.

Gaps can develop in a number of areas including policies and procedures, capability, and resource allocation. Start with these questions:

Step 4: Formulate Gap Strategies

Next, work to develop strategies that will address the gaps you identified in Step 3. These gap strategies may affect:

Not all gaps will be of the same strategic importance, so you will need to set priorities for addressing them.

For example, imagine you discovered a need to update your HR information system. Investing in a new system would provide you with employee progress data that you deemed essential for your future company goals.

The need for an upgraded HR information system should be prioritized as urgent because it’s necessary to succeed in your long-term strategic plan.

Questions you can ask to help you determine the priority of your needs include:

Step 5:  Share & Monitor The Plan

Sharing the Strategic HR Plan with your senior leadership and those connected to the HR function of your organization is a crucial component of its success. The more your team understands and supports the plan, the more empowered they will be to help the company achieve its goals.

It’s also important to monitor the progress of the Strategic HR Plan you develop and to communicate successes or modifications to your team.

At the very least, you should review the plan on an annual basis to verify that the goals on which the plan was based are still accurate and to make adjustments as needed.

Developing Your Plan

Developing a comprehensive Strategic HR Plan is an essential investment in helping your company achieve its goals.

A Strategic HR Plan aligns your corporate mission with your business plan, ensuring you have the capacity to deliver on strategy as you pursue your organization’s goals.

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Blog Human Resources

6 Steps to Create a Strategic HR Plan [With Templates]

By Jessie Strongitharm , Aug 25, 2022

hr plan

The backbone of any successful business is the people and processes behind it — that’s why creating a human resources (HR) plan is key. This strategic document drives your business forward by evaluating where your workforce is at, and comparing it to future needs. 

Without an HR plan, organizations can suffer from issues that would have otherwise been avoided. From productivity pitfalls to costly employee turnover, there’s no shortage of risks you can sidestep if you do human resource planning in advance. 

Not sure where to start? No worries. I’ve outlined six steps you can take to create an effective HR plan that ensures your organization is well-staffed and well-served. You’ll also find a variety of  HR templates  that you can customize in just a few clicks — no design expertise required. 

Click to jump ahead:

What is human resource planning.

Human resource planning is the process of considering the current and future “people needs” of an organization.

This involves evaluating an organization’s workforce structure and protocols to ensure operational goals are met, productivity stays high and future demands for labor and talent can be fulfilled. 

The result of this process is the creation of an HR plan, which typically takes the form of a written document. These documents tend to follow a similar structure to most  strategic business plans  and are created on an annual basis, by HR managers or company leaders.

Check out the template below for an example. 

hr plan

This eye-catching, one-page  HR Strategic Plan Template  offers a concise summary of your human resource planning efforts, so you can easily share info with colleagues. 

Just swap out the text and visual assets for those of your choosing in  Venngage’s editor , and you’re off to the races. 

Return to Table of Contents

Start creating a strategic HR plan in 6 steps

Ready to create a strategic plan for the human resources that power your business? Here are six steps to help you succeed at the human resource planning process.

The first step to creating a future-forward HR plan is to assess employees’ current skill sets, and compare them to your operational needs moving forward. This will help you identify gaps and inform any hiring of new employees.

Employees’ skill levels can be assessed by reviewing their work history, hard and soft skills and professional growth over time. 

Using a matrix is a great way to understand where the skill gaps in your current workforce exist. Below is an example that describes the skills needed for different marketing roles. 

hr plan

Don’t need it for marketing specifically? No worries — you can fully customize this template by swapping in your own text to examine any human resource gaps. 

Another way to assess skills is by giving employees a questionnaire they can fill out. This  Employee Competency Assessment Template  does just that.

hr plan

Based on the information collected, you’ll get a sense of what positions best suit each individual, and whether any upskilling or hiring is required. 

Next in your strategic strategic HR management plan, you’ll want to consider the future. This involves accounting for any upcoming changes to your workforce, so operations can continue without error.

When forecasting labor needs, the following should be considered: 

Beyond those, it’s a good idea to assess the impact of external conditions on your labor needs during your human resource planning. For example, new technological developments may decrease the amount of employees you require to operate your business. 

Organizational design is the process of structuring the way a business operates so it can best achieve its goals. This is hugely important when it comes to your human resource planning process! 

With a clear understanding of your organization’s strategic objectives in mind, reviewing your organizational design allows you to understand the staffing requirements you’ll need to succeed at them. This means taking into account your  organizational structure  and chains of command, as well as how work gets done and the way information flows.

 From there, you’ll be able to see which departments need more team members so it can accomplish the organization’s objectives. 

An easy way to get started is by using an organizational flow chart. 

hr plan

With its color coding and layout, even a new manager can quickly look at this chart to identify the people responsible for leading teams and making decisions. 

And if there are any changes, it’s easy to to reflect them in the chart itself. All you need to do is customize the text and visual assets in  Venngage’s Chart Maker  as desired. 

Not quite your style? There’s plenty of other  organizational chart templates  to choose from. 

hr plan

Here’s an organizational chart that’s perfect for small businesses that have limited employees. One quick look, and you’re good to go. 

The bottom line is, no matter how big or small your business may be, you should always revisit your organizational design to optimize your workforce management and business operations. 

Related:  Types of Organizational Structure [+ Visualization Tips]

In this day and age, it’s a known fact that companies must provide more than just a paycheque to attract and retain talent, and encourage growth. 

It’s true —  studies have shown  employees are more engaged in their work when they feel it is meaningful, fulfilling and slightly challenging. So your human resource plan should consider how to inspire such feelings, and what actions you can take to motivate employees to stay. (Hint: a strong HR training and development program is key.)  

The  talent management infographic template  below is a great way to begin. 

hr plan

Using this  process chart , you can detail the steps you’ll take to retain the talent you have. Reference it as needed in your human resource planning.

 Another great way to keep staff motivated and geared towards their professional growth is by coming up with  ideas for employee development . Facilitating a company culture that champions continuous learning guarantees your team will feel supported and challenged in all the right ways.

The two employee development plan templates below will help you do just that. 

hr plan

Though both templates are geared towards healthcare organizations, it’s easy to customize their content in Venngage to promote the continuous learning and development of employees in any industry.

 As a result, your employees will be able to reach their full potential, while simultaneously supporting the long-term goals of your organization. 

Related:  6 Employee Development Ideas for Efficient Training

 Let’s face it, human resources ain’t cheap.

 Meaning, if you struggle at organizing and monitoring your HR budget, you’re bound to overspend on your initiatives —and no financially savvy business wants that. 

That’s why I recommend including financial information in your HR planning process, so you can reference your budget and expenses as needed. This ensures you’ll be able to stay within range as you work towards achieving your strategic goals for human capital . 

Plus, you don’t need to use one that contains walls of text and wack-loads numbers. Check out the clean and cheery option below — it’s as easy to fill out as it is to understand. 

hr plan

And if you’re looking to compare a forecasted budget to previous annual spending when strategizing your HR budget, the  Budget Comparison Infographic Template  below will help. 

hr plan

The bar graph is a great  data visualization  of annual expenses, organized by category. Just add (or import) any values to Venngage’s editor, swap out the text, and you’re ready to compare with ease. 

Related:  10+ Expense Report Templates You Can Edit Easily

Measurable results are important when it comes to your HR planning processes, because they indicate whether your strategy is working or not. 

Keeping those metrics in mind, your company can make adjustments and improve upon any future plans — AKA strategize for future success in business. That’s why your human resource plan should include info re: the specific key performance indicators (KPI) you’ll be measuring. 

KPIs are established to help determine if HR strategies and plans are working. Much like those used for evaluating the performance of  marketing  or  sales plan , KPIs for human resources are measurable results that indicate an organization’s success at achieving predetermined goals.

These may take the form of headcounts, turnover rates, demographic information, time to hire and employee satisfaction scores. 

Here’s one employee satisfaction survey you can use to understand your workforce better. 

hr plan

When you’re ready to organize those HR KPIs in a document, the  recruiting template  below is perfect for keeping tabs at a glance. 

hr plan

Related:  10+ Customizable HR Report Templates & Examples

How do I make an HR plan? 

After you’ve collected the data you need, you’ll want to convey this info in an engaging, professional manner for easy referencing and sharing amongst colleagues. Given this, using Venngage is the best route to go. 

Here are the simple steps to help you bring an actionable HR plan to life: 

Note: sharing is available free-of-charge. However, the option to download your creations and access features like  My Brand Kit and Team Collaboration  are available with a  Business plan . 

FAQ about HR plans

How long should an hr plan be .

There are no hard and fast rules when it comes to the length of an HR plan. That being said, if you’re going to share it with colleagues, you probably don’t want to create a 20+ page document. One to five pages should suffice. 

Try to be as concise as possible when relaying the facts, and use  data visualizations  wherever possible to save room.

Do I need an HR contingency plan?

In the same way creating an HR plan is a proactive move that helps your organization account for future needs, it’s a good idea to devise an HR contingency plan. This ensures there’s a back-up plan in place should your initiatives not go as expected. 

For example, if you’ve identified that you need five new hires to keep up with consumer demand, but the talent pool is lacking, a contingency plan could house suggestions for restructuring your workforce to mitigate this. 

In other words, it’s best-practice to hope for the best, but prepare for the worst. 

Is an HR plan different from an employee development plan?

Yes. While an HR plan is a strategic document describing how an organization addresses its personnel-related needs at a high-level, an  employee development plan  outlines the processes needed to help an individual achieve their professional goals.

 Even though the human resource planning process may involve outlining some employee development tactics, it is not unique to each employee as in the case of an employee development plan.

Make your HR planning processes effortless 

You don’t need a crystal ball to feel confident about your people moving forward. With a solid HR plan and strategy in place, you’ll prime your workforce — and all business endeavors — to succeed in even the most competitive of markets. 

Just remember this: human resources planning, and creating strategic business plans in general, doesn’t have to be exhausting. 

With Venngage’s huge selection of  professionally-designed templates  and easy-to-use editor, all it takes is a few minutes to produce a polished document perfect for all your needs.  Sign up for free today ! 

strategic human resource planning process

4 steps to strategic human resource planning

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4 steps to strategic human resources planning

It’s easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer demands. But despite its obvious importance, many organizations do not have a strategic human resource planning process in place, with many HR professionals reporting their departments need to improve strategic alignment.

If you’ve considered developing an HR planning process, you’re in the right place. This article will explain what human resource planning entails and how to document your strategic plan. With this knowledge under your belt, you’ll be filling positions and growing as a company in no time.

steps to strategic human resources planning

Introduction to strategic human resource planning

In order to improve the strategic alignment of staff and other resources, it’s essential to understand how to create a strategic HR planning process. At its most basic level, strategic human resource planning ensures adequate staffing to meet your organization’s operational goals, matching the right people with the right skills at the right time.

It’s important to ask where your organization stands currently and where it is going for your plan to remain flexible. Each company’s plan will look slightly different depending on its current and future needs, but there is a basic structure that you can follow to ensure you’re on the right track.

The strategic human resource planning process begins with an assessment of your current staff, evaluating whether it fits the organization’s needs. After that, you can move on to forecasting future staffing needs based on business goals. From there, you’ll need to align your organization’s strategy with employment planning and implement a plan to not only to hire new employees but also to retain and properly train the new hires—and your current employees—based on business changes.

Read on to understand human resource planning in more detail.

1. Assess current HR capacity

The first step in the human resource planning process is to assess your current staff. Before making any moves to hire new employees for your organization, it’s important to understand the talent you already have at your disposal. Develop a skills inventory for each of your current employees.

You can do this in a number of ways, such as asking employees to self-evaluate with a questionnaire, looking over past performance reviews, or using an approach that combines the two. Use the template below to visualize that data.

skills inventory by department

2. Forecast HR requirements

Once you have a full inventory of the resources you already have at your disposal, it’s time to begin forecasting future needs. Will your company need to grow its human resources in number? Will you need to stick to your current staff but improve their productivity through efficiency or new skills training? Are there potential employees available in the marketplace?

It is important to assess both your company’s demand for qualified employees and the supply of those employees either within the organization or outside of it. You’ll need to carefully manage that supply and demand.

Demand forecasting

Demand forecasting is the detailed process of determining future human resources needs in terms of quantity—the number of employees needed—and quality—the caliber of talent required to meet the company's current and future needs.

Supply forecasting

Supply forecasting determines the current resources available to meet the demands. With your previous skills inventory, you’ll know which employees in your organization are available to meet your current demand. You’ll also want to look outside of the organization for potential hires that can meet the needs not fulfilled by employees already present in the organization.

Matching demand and supply

Matching the demand and supply is where the hiring process gets tricky—and where the rest of the human resources management planning process comes into place. You’ll develop a plan to link your organization’s demand for quality staff with the supply available in the market. You can achieve this by training current employees, hiring new employees, or combining the two approaches.

skills supply and demand chart (marketing department)

3. Develop talent strategies

After determining your company’s staffing needs by assessing your current HR capacity and forecasting supply and demand, it’s time to begin the process of developing and adding talent. Talent development is a crucial part of the strategic human resources management process.

overview of the talent development process


In the recruitment phase of the talent development process , you begin the search for applicants that match the skills your company needs. This phase can involve posting on job websites, searching social networks like LinkedIn for qualified potential employees, and encouraging current employees to recommend people they know who might be a good fit.

Once you have connected with a pool of qualified applicants, conduct interviews and skills evaluations to determine the best fit for your organization. If you have properly forecasted supply and demand, you should have no trouble finding the right people for the right roles.

Decide the final candidates for the open positions and extend offers.

Training and development

After hiring your new employees, it's time to bring them on board. Organize training to get them up to speed on your company’s procedures. Encourage them to continue to develop their skills to fit your company’s needs as they change. Find more ideas on how to develop your own employee onboarding process , and then get started with this onboarding timeline template. 

timeline for onboarding

Employee remuneration and benefits administration

Keep your current employees and new hires happy by offering competitive salary and benefit packages and by properly rewarding employees who go above and beyond. Retaining good employees will save your company a lot of time and money in the long run.

Performance management

Institute regular performance reviews for all employees. Identify successes and areas of improvement. Keep employees performing well with incentives for good performance.

Employee relations

A strong company culture is integral in attracting top talent. Beyond that, make sure your company is maintaining a safe work environment for all, focusing on employee health, safety, and quality of work life.

4. Review and evaluate

Once your human resource process plan has been in place for a set amount of time, you can evaluate whether the plan has helped the company to achieve its goals in factors like production, profit, employee retention, and employee satisfaction. If everything is running smoothly, continue with the plan, but if there are roadblocks along the way, you can always change up different aspects to better suit your company’s needs.

Why document your strategic HR plan

Now that you know the steps to strategic human resource planning, it's time to adapt those steps to your own organization and determine how to execute.

There are a number of reasons to document your strategic human resources plan, particularly in a visual format like a flowchart. Through documentation, you standardize the process, enabling repeated success. Documentation also allows for better evaluation, so you know what parts of your plan need work. In addition, a properly documented plan allows you to better communicate the plan throughout the organization, including how everyone, from the top down, can contribute to make sure the plan works. 

Document every step of the process, from beginning to end, and find room for improvement in your human resources process along the way.

strategic human resource plan

Start creating your own strategic human resource plan with this template.

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How to Write a Strategic Human Resources Plan

How to Create a Human Resource Department Annual Strategic Plan

Three key elements of the human resources planning model, ratio analysis formulas used in human resources.

A strategic plan serves as a road map for an organization in terms of its vision, mission statement, core values, objectives and goals. It gives functional areas such as distribution, manufacturing, marketing, finance, operations, research and development and human resources a framework for contributing to goal achievement. It is within this framework that human resources must develop a strategic plan for what the authors of “Successful Strategic Human Resource Planning” call “people management” to ensure workforce availability, competency and competitiveness.

The planning process becomes smoother with preparation. During this preliminary “plan-to-plan” stage, individuals who will be involved, the project’s time frame, information needed and sources for that information are identified. Odds for success increase by devoting time to ensure that no one (customers, investors and employees) and nothing has been overlooked. Small businesses may opt to base their HR plan on a set number of quarters or on a half-year basis depending on growth projections and whether they are in the start-up stage.

Situation Analysis

The first step in writing a strategic human resource plan involves a thorough study of external factors affecting the business: economic conditions, political/legislative atmosphere, competitive climate, market conditions, industry outlook and trends in technology. This “environmental scanning” identifies threats the organization faces and opportunities to exploit.

Internal Analysis

The internal analysis centers on corporate culture, employee competencies and workforce composition by location in terms of workers with general knowledge versus specific skills, contract labor and what author and professor emeritus George W. Bohlander calls “alliance/partners” — those whose skills do not relate directly to the organization’s strategy. Taking stock of the human capital currently employed provides a foundation for determining future staffing needs.

Forecasting Demand

Forecasting encompasses labor demand and supply predictions to indicate any surplus or shortage that the HR strategic plan must address. Demand estimates must consider the organization’s objectives, business unit goals, budgets and historic turnover, absenteeism, retirement and attrition rates. A small business likely will use the qualitative method to forecast demand when it has little or no historical data, rather than crunch statistics. The qualitative method takes advantage of management expertise, intuition and prior experience to assess future employment needs.

Forecasting Supply

Supply estimates are based on labor market characteristics such as unemployment rate, demographic trends, government regulations, education levels and worker mobility. Small businesses should consult local, state and government agencies as sources if national and international data is not relevant to their situation.

Action Plans

The final step in writing a strategic human resources plan compares the current workforce inventory with the labor forecasts. Gaps related to skills, position types (e.g., managers, specialists, plant workers) and workforce size are addressed with action plans based on organizational structure, employee development, succession planning, outsourcing, recruitment and technology strategies.

Trudy Brunot began writing in 1992. Her work has appeared in "Quarterly," "Pennsylvania Health & You," "Constructor" and the "Tribune-Review" newspaper. Her domestic and international experience includes human resources, advertising, marketing, product and retail management positions. She holds a master's degree in international business administration from the University of South Carolina.

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How to write a strategic human resources plan

creating a strategic hr plan

Success in business doesn’t just happen. It’s the result of hard work and careful planning. To achieve your business goals, your company needs a strong corporate strategy. It also needs a strategic human resource management plan.

What Happens If You Have an Ineffective Human Resources Plan

Your corporate HR strategy guides your company toward its goals. When creating a corporate strategy, it’s important to remember that this strategy will affect every aspect of your business. Here are just a few of the implications of an ineffective HR plan:

On the other hand, a strategic, thoughtful HR plan can help your company avoid employee issues so your company can thrive.

Create Your Strategic HR Plan

When’s the last time you assessed your company’s HR plan? If it’s been a while – or if it’s never happened – now is the time to write a strategic human resources plan. Here are some steps to follow:

Step 1: Align Your HR Strategy with Your Corporate Strategy

Your HR strategy should power your corporate strategy, but this can’t happen if the two strategies are out of alignment.

Step 2: Assess Your Current Strengths and Weaknesses

Before your company can improve its HR functions, it needs to conduct an honest assessment of its current capabilities.

Step 3: Look Outward

Your company does not exist as an island. When creating a strategy plan for human resource management, consider the external factors that can impact your employees and inform your HR policies.

Step 4: Decide How to Fill in Gaps and Meet Challenges

Every company has room for improvement. Your assessment of your company’s current HR capabilities will likely uncover gaps. Writing your strategic human resources plan requires you to determine how to fill in these gaps.

Step 5: Look to the Future

Your company has big plans. A good HR strategy can guide your company as it grows. When writing your HR plan, don’t just focus on the present – or worse, the past. Also focus on the future.

Step 6: Implement Your Plan

Once you have a clear plan ironed out, it’s time to implement it.

Step 7: Reassess and Update

After implementation, it will be necessary to review the HR plan and tweak it as necessary. This may be done on a regular schedule. Reviews may also occur after significant events that impact HR functions, such as crises, growth and mergers.

Need help developing your strategic human resources plan?

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How to Create a Human Resource Strategy

Posted by Erik van Vulpen

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creating a strategic hr plan

creating a strategic hr plan

Strategic HR Planning

Strategic HR planning 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. While workforce plans are not as common, they are just as important.

Even a small organization can develop a strategic plan to guide decisions about the future. Based on its overall 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 costs such as recruitment and training 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.)

Part of strategic planning is defining your organization's mission, vision and values. Andrew Fleck Child Care Services has provided their Mission, Vision and Values as an example:

Mission – We support children and their families through high quality, inclusive services that meet their diverse developmental, early learning and child care needs

Vision – Working with the Ottawa community to build accessible multi-service support, early learning opportunities and child care for every child

Your strategic HR plan should be aligned with your Mission, Vision and Values.

In this section:

Introduction to strategic HR planning

The overall purpose of strategic hr planning is to:.

Strategic HR planning predicts the future HR 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:

HR Management  Standard 6.1 The organization has a process to review staffing needs resulting in a plan to address those needs.

The strategic HR management planning process

The strategic HR management planning process has four steps: Assessing the current HR capacity Forecasting HR requirements Gap analysis Developing HR strategies to support organizational strategies

1. Assessing the 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.

2. 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:

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.

3. 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 those that could be improved or new practices needed to support the organization's capacity to move forward.

4. Developing HR strategies to support organizational strategies

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

1. Training and development strategies

These strategies include:.

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.

2. Recruitment strategies

Each time you recruit you should be looking at the requirements from a strategic perspective. For example, if your organization has several supervisors that are nearing retirement age, your recruitment strategy should include recruiting staff with the ability to assume a supervisory role in the near future.

3. Outsourcing strategies

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 purchased 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.

4. 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.

Examples of collaboration include:

5. Restructuring strategies

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.

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

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.

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.


The strategic hr plan needs to be communicated throughout the organization. your communication should include:.

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, as well as existing resources such as payroll and benefit plans.

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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