Strategic human resource planning is important to the success of any organization. It is the process of developing a long-term approach when developing HR programs that directly contribute to major long-term business objectives. But, when not fully understood, strategic planning can be just another one of those buzz phrases thrown around at HR association and networking events as an answer to a generic question:
“How is business?”
“Oh, been working on our strategic plan lately.”
“Really? Me too!”
A lot of the work we do is integrated into the process of strategic planning. While we all look for a starting point to begin work on our strategic plan, the truth is that a strategic plan is an ongoing course of action. It is the foundation for all of the other HR functions used to keep the business humming along nicely and is comprised of several factors. In this piece, we are going to explore three basic aspects of the strategic function: 1.) Setting clear objectives; 2.) Applying consistent action; and 3.) Commitment to long-term planning.
Setting clear objectives
While the function of the HR department is to provide a working strategic plan for the business to use, there is not a one-fits-all model that can be applied. However there is a set of guidelines that help to create a successful plan and it begins with assuring that all communication lines are open between management and employees.
An old Chinese proverb states, “If you are planning for a year, sow rice; if you are planning for a decade, plant trees; if you are planning for a lifetime, educate people.” Or, as John Naisbitt stated, “Strategic planning is worthless -- unless there is first a strategic vision.” Without communicating the organization’s vision and educating all team members as to the importance of following that vision, a strategic plan is useless. A good understanding of the vision (as well as the mission and purpose statement) of the organization not only sets clear guidelines for business operations, it can also help to control employee turnover.
One of the major challenges for HR professionals is deciding where they are going to focus, and how to bring about the type of change that is in line with what the business needs. A clear set of objectives needs to be established. This is not something that should be sat on for months until the plan looks perfect --- it won’t. Decisive action needs to be taken as soon as objectives are determined. This action includes communicating the objectives to all team members, and embarking on a step-by-step plan to reach those objectives.
Applying consistent action
The role of HR is to help make a business successful through great people and people management. As part of the strategic planning process, particularly crucial functions such as recruiting, performance reviews, and succession planning need to be addressed to ensure that the business gets and keeps the best people.
In strategic HR planning, a skills inventory is used for understanding the company’s pool of current skills and talent. This list helps the company to know when it is time to recruit and train new employees. Recruitment is one of those ongoing phases within strategic planning. Determining what worker competencies are present in the company now versus what competencies will be needed to meet future business demands is needed for recruiting the right people. For proper selection, organizations must acquire hard data about the labor market and generate good internal data on turnover, employee skills, and emerging needs. This will also help in determining what kinds of employee development plans to implement.
With recruitment, cost and time are major issues. No matter how efficient the process, it costs more and takes longer to find, hire and train a new person than to re-train a current employee. This is just one of the reasons emphasis should be placed on retaining employees. While obvious, many employers neglect implementing open communication with employees, providing quality training programs and incentive plans to keep the current workforce in place.
Managing employee performance involves not only measuring and monitoring results, but also involves the organization’s strategy, policies, and practices with respect to establishing performance expectations for employees. The key here is to in fact establish expectations. An employee cannot be responsible for not performing up to a level that they didn’t know existed. This goes back to communication, communication, communication. All too often a manager or business owner will unfairly critique an employee’s performance without any basis or measurement to go by.
The succession plan should be tied closely with the development and implementation of the business plan. Succession planning is the process of identifying a long-term plan to orderly replace your organization’s leaders and vital employees. Many organizations understand the concept of succession planning, but don’t think about it until a key employee has left and there is no candidate available to immediately fill the position. Succession planning’s main concept is simple: identify the critical positions, identify the future vacancies of those positions, and then identify either inside managers or outside talent who will fit into those vacancies.
Although the principle of succession planning is simple, the method is more involved and should be started in the early phase of strategic planning. Succession planning can become complicated depending on the size of the company, turnover rates, technological requirements, new business opportunities or needs such as diversification and other company-specific requirements. The first step in the process is to create a succession plan policy. Meeting with key leaders or the business owner, determine the steps of your organization’s succession plan. Include factors such as a system for communication of the succession planning process to managers; a system for monitoring candidate's development plan progress by senior management; and a review of recruitment and replacement needs at the point in time when those individuals are ready to advance.
Commitment to long-term planning
Within ten years, what we think of as traditional training programs will be obsolete. Technology, evolving management techniques, and a different generation of employees will require changes in how we recruit, manage, and train. Along with the already fast pace of business, long-term thinking will be required for successful strategic planning. Part of the planning and implementing of strategy is to try to understand the future, particularly the implications of future developments for various aspects of the business.
Since crystal balls are hard to come by these days, many companies explore an alternative future, which is simply viewing different aspects of the world from a view from the future.
An example is a high-tech company focusing on alternative views of computer usage or access, or the potential development of key technologies. Another is a health care provider may focus on demographic changes that could lead to new patient needs. Whatever is projected based on your business services and products is what you want to use for planning purposes. Google “alternative factors scenarios” or “scenario analysis” and you’ll find a plethora of software tools available for projecting scenarios to assist you with your long-term planning.
Since history often repeats itself, using historical data from your business to forecast upcoming needs is also helpful. This is often used for organizations with seasonal business. Various tools are available. The point is to always have an eye on long-term planning, which is five to ten years out.
Integrating the functions of setting strategic objectives, applying consistent action, and commitment to long-term planning into your daily activities will make strategic planning less painful and more rewarding than ever.