what is strategic planning in human resources

Strategic Human Resource Management (2023 Guide)

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Updated: Jan 3, 2023, 11:38am

Strategic Human Resource Management (2023 Guide)

What is strategic human resources, why strategic human resources is important, 5 steps to strategic human resources, bottom line, frequently asked questions (faqs).

Strategic human resource management (SHRM) is a process that organizations use to manage their employees. It is a way to ensure that the organization’s human resources are used in a way that supports the organization’s goals. Think of it as a bridge connecting human resources and the goals of the company. With SHRM, businesses can more effectively manage employee performance and development, as well as create programs and policies that support the company’s overall strategy.

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The goal of SHRM is to create policies and programs that align with the company’s business strategy. The main difference between human resources and strategic human resources is that human resources focus on the day-to-day management of employees, while strategic human resources focus on how employees can achieve the company’s overall goals. This means that SHRM must first understand the company’s business goals and then create programs and policies that support those goals.

Some common examples of SHRM programs and policies include:

These are just a few examples of the types of programs and policies that can be part of SHRM. The specific programs and policies will vary depending on the company’s goals and the needs of its employees.

SHRM is important because it helps businesses achieve their goals. By aligning HR programs and policies with the company’s business strategy, SHRM can help businesses improve employee performance, develop the workforce and create a positive work environment. SHRM can also help businesses save money by reducing turnover and improving productivity.

Now that you know what SHRM is and why it’s important, you may wonder how to get started. The process involves knowing the goals of your company, its abilities, future needs and resources. From there, you put your plan into action, then reassess and pivot if necessary.

Here are the five steps to strategic human resources plan:

1. Know your company’s goals and abilities

The first step to SHRM is understanding your company’s goals and abilities. When you know your company goals and can articulate them, you’ll have an easier time creating programs and policies that support those goals. You’ll also be able to more effectively measure the success of your SHRM programs and make changes as needed.

Consider the following questions:

Answering these questions will help you understand your company’s goals and abilities, and how SHRM can help you achieve those goals.

2. Forecast future needs

Now that you have an idea of your company’s goals and abilities, you need to forecast future needs. In order to ensure your company’s future success, you need to predict how many employees with the required skills will be necessary and measure it against your company’s current workforce. This will help you determine what skills your company will need in the future and how to develop those skills in your workforce.

By answering these questions, you will be able to comprehend what abilities your company will need in the future and how to cultivate a workforce with those required skills.

3. Determine the resources needed to achieve company goals

After you know your company’s goals and have forecasted future needs, you need to determine the resources needed to achieve those goals. This includes identifying the financial resources, human resources and physical resources required.

To determine these, you’ve got to conduct an audit of both your internal and external resources. This will give you a sense of what types of resources you have available to achieve your goals and where you may need to supplement.

For example, if you’re looking to expand your workforce, you may need to invest in recruiting programs. Or, after conducting a needs assessment, you may find that your current workforce doesn’t have the necessary skills to achieve your company’s goals, so you’ll need to invest in training programs.

Another example is if you’re looking to launch a new product. In this case, you’ll need to consider the financial resources required to develop and market the product, as well as the physical resources required to produce it. You’ve also got to consider talent and skill set when launching a new product. Do you have the right people in place to bring your product to market? And do they have the necessary skills to do so?

4. Execute your plan

Now that you’ve set your company’s goals, forecasted its future needs and gathered the resources required to achieve those goals, it’s time to put your SHRM plan into action. Most companies start by recruiting the right candidates, training and development and then performance management. However, this will vary depending on your company’s specific needs.

If you already have a large talent pool to choose from, you may be better off cultivating skills of current employees before recruiting outside talent. After you’ve satisfied that resource, you may find you still need to hire. If so, you’ll need to have clear expectations and skill requirements before recruiting.

Once you’ve hired talent, it’s imperative to have a proper onboarding process. This will help ensure that your new hires are set up for success and understand what’s expected of them. After you’ve brought new talent into the fold, you need to focus on development. This includes training programs as well as opportunities for professional growth. By offering these opportunities, you’ll be able to retain top talent and keep them engaged in their work.

Last but not least is performance management. This includes setting clear expectations, providing feedback and conducting performance reviews. Performance management is a key part of SHRM as it helps ensure that your workforce is meeting expectations and contributing to your company’s bottom line.

Here are a few things to keep in mind when executing your SHRM plan:

5. Assess and pivot

After you’ve executed your SHRM plan, it’s important to assess how things are going. This includes looking at what’s working and what’s not. Based on your assessment, you may need to make adjustments to your plan. For example, if you’re not seeing the results you want, you may need to change your recruiting strategy. Or, if you’re finding that your training programs aren’t effective, you may need to make changes to those as well.

It’s also important to keep in mind that your SHRM plan is not a one-time thing. As your company grows and changes, so too will your SHRM needs. As such, it’s important to revisit your SHRM plan on a regular basis to ensure that it’s still relevant and effective.

Strategic human resource management is a process that helps companies achieve their goals by better managing their workforce. By taking the time to develop a SHRM plan, companies can ensure that they have the right people in place to achieve their goals. While developing a SHRM plan can be time-consuming, the benefits outweigh the costs. Not only will a well-executed SHRM plan help you achieve your company’s goals, but it will also help you retain top talent and keep your employees engaged in their work.

What is strategic human resource management (SHRM)?

Strategic human resource management is a process that helps companies manage their workforce in a way that aligns with their company’s goals.

Why is SHRM important?

SHRM is important because it helps companies ensure that they have the right people in place to achieve their company’s goals. Additionally, SHRM can help companies retain top talent and keep their employees engaged in their work.

What's the difference between human resources and strategic human resource management?

The difference between human resources and strategic human resource management is that human resources focuses on the day-to-day management of employees while SHRM takes a more strategic approach.

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Human Resources

Gartner Glossary

Hr strategic planning.

HR strategic planning involves the identification of and response to HR functional and talent risks that inhibit the successful execution of strategic priorities. It refers to the way that HR leaders plan for business risks and opportunities by prioritizing and allocating resources to HR initiatives. This involves aligning business and HR strategies, defining HR priorities relative to critical business initiatives, and adjusting the execution of initiatives as business conditions change. HR leaders often need assistance with either making the business case for the HR strategic planning of specific initiatives for the coming year, or prioritizing resource allocation between several ongoing projects.

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strategic human resource planning process

4 steps to strategic human resource planning

Reading time: about 7 min

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.

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

Recruitment

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.

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.

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

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COMMENTS

Strategic Human Resource Management Guide
Strategic human resource management (SHRM) is a process that organizations use to manage their employees. It is a way to ensure that the organization’s human resources are used in a way...
What Is HR Strategy? And How Can You Best Execute It?
As part of strategic workforce planning, it is essential for HR leaders to identify whether the organization has the capabilities and skills it needs to achieve its business goals. It’s also critical to incorporate plans to address skills needs directly into HR strategies.
Human Resources Strategic Planning: an Introductory Guide
A human resource strategy is an organization’s comprehensive, long-term plan for managing and maintaining an effective team of staff members to ensure that they are aligned with the company’s values and overall strategies. In turn, this guides all aspects of the human resources department. What are the 6 steps for creating an HR plan?
Definition of HR Strategic Planning
HR strategic planning involves the identification of and response to HR functional and talent risks that inhibit the successful execution of strategic priorities. It refers to the way that HR leaders plan for business risks and opportunities by prioritizing and allocating resources to HR initiatives. This involves aligning business and HR ...
4 Steps to Strategic Human Resource Planning
Human resource strategy is an elaborate and systematic plan of action developed by a human resource department. This definition tells us that an HR strategy includes detailed pathways to implement HRM strategic plans and HR plans.