Strategic human resource planning (SHRM) is a proactive process that aligns human resource capabilities with long-term business goals.
In this guide, we’ll go through the basics of why this foward-thinking approach is so important for resource planning success. This includes its definition, the main steps, and best business practices.
Key Takeaways
Strategic human resource planning is part of the broader human resource planning (HRP) strategy. This process targets long-term objectives, spanning from one to five years, and ensures that businesses have enough capacity to meet future needs.
Strategic HR planning must be aligned with short-term resource planning, which handles daily concerns, such as employee schedules and workloads. Long-term strategies should also be aligned across departments, such as the finances or management, to ensure that initiatives contribute to shared organizational goals.
See more: What Is Human Resource Planning?
Some of the critical business questions that strategic HRP addresses can include:
Additionally, it can cover broader concerns, such as the need for organizational flexibility or continuous improvement. As an ongoing process, strategic management provides the perfect answer for businesses to tackle and address complex issues.
The four main steps of strategic HRM include analyzing current capacity, needs forecasting, gap analysis, and strategy development and implementation.
This step involves analyzing both internal and external business circumstances that are important for future demand. Internal factors usually include details about your current employees, including their productivity, specific skills, availability, and engagement levels. External factors encompass market trends, economic conditions, and industry-specific demands that could influence future resource requirements.
Get an all-in-one solution and improve your business performance with employee scheduling, time off management, billable hours tracking, and more.
Start Free Trial
Accurate needs forecasting is one of the most challenging parts of the developing workforce plans. It involves predicting the skills, overall capacity, and roles needed to keep a business relevant during changing market conditions and technological advancements. Therefore, it requires a thorough understanding of your human capital and the industry.
Needs forecasting includes:
Gap analysis takes the first two steps of the human resource management process to pinpoint specific areas of improvement — it compares the current workforce capabilities with future needs to identify conflicts or discrepancies.
For example, a retail chain looking to expand its online presence might consider its current capacity, and realize that it has enough technical roles to go into e-commerce. However, by conducting needs forecasting of the competitors, it may recognize the need for marketing professionals skilled in SEO or digital marketing to drive more of their customer base to their website.
The next step involves developing specific strategies to address resource conflicts and help your business reach its goals. Some of these may include:
To ensure that your strategies are effective across time, it’s necessary to closely monitor progress, usually by analyzing various key capacity performance indicators (KPIs). Setting desired targets can be a good way of determining if you’re on the right track — for example, an agency with low productivity might set its desired utilization rates at 80%.
Manage and visualize your employee productivity with Productive
However, it’s equally important to keep in mind that some benefits of successful ERP can be difficult to quantify or determine in a short amount of time. This can include better workplace culture or increased employee satisfaction.
See more: ERP benefits for businesses
The strategic HR document should include an outline of the organization’s human resource objectives, the strategies for achieving them, and the steps for implementation. Putting your initiatives into writing can help drive alignment across various teams and ensure that everything is progressing according to plan.
According to research by Forrester, 97% of organizations have minimal or no digitally documented processes. While traditional documentation can be better than no documentation, consider the benefits of automating information gathering and sharing with ERP software solutions.
We used to have a project management tool, a time tracking tool, a support tool, a way we handled opportunities and sales-driven processes. Those were all separate tools that we had, and it wasn’t good. It also meant that all that data was being lost every time we switched between tools, or we had to find a way to normalize the data between them. And now, the fact that it’s all in one, it’s really a game changer.
BRYAN CASLER,
VICE PRESIDENT OF DIGITAL STRATEGY AT 4SITE INTERACTIVE STUDIOS
For example, the resource and agency management tool Productive can help you automate the work scheduling process with its resource planning model template, provide real-time reporting on utilization rates, manage employee availability and time off, and more.
Another great feature you can consider is collaborative documentation with AI content creation. This can help you keep all essential project data on a single platform.
Get a sneak peek into our Bold Community and learn how agencies can benefit from AI in 2023 with Nicholas Petroski from Promethean Research.
