Strategic Planning For Human Resources Management _TOP_
The purpose of strategic planning is out figure out what a company wants to do and why it is in business. For example, an organization might decide that it wants to diversify into new markets because it has gone as far as it can go in its current markets. The strategic options here include:
Strategic Planning for Human Resources Management
The process of strategic planning would involve investigating all of these options and deciding which one represents the company's vision of the future. From there, the company's leadership team would start drilling down into the specific strategies that can enable the company to meet its big-picture goals.
Businesses typically look three to five years ahead when formulating a strategic plan, and the process results in a document that articulates the company's vision, mission, big-picture goals and the broad strategies it will use to reach those goals. This planning document is intended to guide leadership in its decision-making.
A key part of strategic planning is assessing the company's resources. It's easy for any company to dream big and have stratospheric ambitions, but what the company can realistically achieve is limited by the number and type of resources it has at its disposal. For most businesses, those resources fall into three main categories:
Human resources: This resource comprises the people whose talents, skills and personal characteristics the business can use to accomplish its strategic goals. While technology and money are important assets, human resources are the most important, because technology and money need people to manage them.
As you can see, human resources are an integral part of any strategic plan. If the business does not have the right skills and talent in place to achieve its goals, then the strategic plan will fail due to a lack of knowledge and manpower. Similarly, if talent is acquired and deployed without reference to the company's strategic goals, then you're going to end up with a lot of people doing jobs that don't add value to the business, and which don't move the company closer to where it wants to be.
The purpose of human resource planning is look into the future and decide what skills, knowledge and competencies the business is going to need in one, three or five years' time to meet its strategic goals. For example, if the company is currently outsourcing its marketing function but intends to bring this function in-house, then an obvious early strategy is to recruit a full marketing team, from a senior manager all the way down to a junior marketing associate or intern.
Strategic planning and human resources planning basically have a symbiotic relationship, in that each function is dependent on the other. Here are some examples of how the relationship works in practice:
When leaders start developing a strategic plan, they will liaise with different department heads to see how the proposed business strategies might affect them. The human resources planning team will figure out the financial impact of the initiative based on the recruiting, training and retention strategies that may be necessary to support the plan. If the initiative involves downsizing, for example, then human resources managers must look at the various options for decreasing the labor supply through dismissals, retirements, transfers out of the department, sabbaticals and voluntary quitting.
As soon as a strategic initiative receives the green light, the human resources team must ready the company's employees for the changes that are about to ensue. This might include changing people's job descriptions, moving people between job units, policy making, motivation strategies, developing training programs, and pinpointing and eliminating labor shortages through recruitment and outsourcing.
Because strategic planning and HR planning are interdependent, it really doesn't matter which plan the leadership team begins to develop first. In fact, they probably should be developed in conjunction with each other. That's because the strategic plan cannot be finalized until there are supporting talent strategies in place from human resources, and the human resources plan cannot be finalized until the long-term goals of the company are clear.
The most effective organizations are those that achieve alignment between the technology, finance and human resources of the business and the formulation and implementation stages of the strategic plan. It should be an integrative activity, rather than a leader-follower process.
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 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.
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 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.
In order for strategic human resource management to be effective, human resources (HR) must play a vital role as a strategic partner when company policies are created and implemented. Strategic HR can be demonstrated throughout different activities, such as hiring, training, and rewarding employees.
Companies are more likely to be successful when all teams are working towards the same objectives. Strategic HR carries out analysis of employees and determines the actions required to increase their value to the company. Strategic human resource management also uses the results of this analysis to develop HR techniques to address employee weaknesses.
HR personnel should decide on a timeline to carry out a strategic HR management review. This review will track the progress made and also identify areas for improvement. The review should be measured against whether changes are helping your company to achieve their goals. Corrective action must be taken if strategic human resource management is failing to meet its objectives.
Emerald Insight published an article about whether strategic human resource management practices have an effect on performance. The paper is based on research, which found that training, development, and pay are the strategic human resource management practices that had the greatest impact on employee performance.
HR Magazine uses Walmart as an example of how strategic human resource management can be used to establish a profitable company. The article provides details about how Walmart aligns its seven overriding strategies (price, operations, culture, key item/products, expenses, talent, and service) with human resource strategic management, for example:
Nissan uses a philosophy called kaizen to help its employees to always keep striving to make improvements to how they work. This approach starts during the recruitment stage and new hires are encouraged to keep improving so that they can stand out. Other strategic human resource management practices at Nissan include leaders being given the independence to hire and build their team.
Following a strategic management plan can help employees strive for the same goals and maximize the results. Unfortunately, many HR professionals struggle with implementing their strategic management plans because they made errors while setting up the plan in the first place or when they tried to improve it.
Focus employee energy and establish priorities by avoiding some of the most common mistakes HR professionals make when setting up and improving strategic management planning processes. Below, you'll find a list of these mistakes as well as tips on how to avoid them from nine members of Forbes Human Resources Council.
HR professionals tend to forget to include management in the creation or improvement of the planning process. Focus groups with leaders or one-on-one conversations with leaders about the current system and processes are important in determining if the proposed ideas will receive buy-in. It is imperative for the new system or updated system to be accepted by leadership. - Charmaine Marie Smith, CSI, Inc.
HR professionals often put too much focus on the output and too little focus on the journey. In many ways, strategic planning is a process of discovery. It requires discussion, debate, listening to all voices, having tough conversations at times and holding deep knowledge of the company. This journey is necessary as it will create the alignment and buy-in that is required to execute the development strategy. - Ben DeSpain, Velocity, a Managed Services Company
The mistake of seeking out best practices instead of focusing on the "best fit" can be detrimental to a plan. The strategic management planning process should always be uniquely drawn from the business strategy and needs. However, there is an overreliance on approaches and metrics that work for other companies that might be at different stages of evolution and have different needs. - Tonushree Mondal, Tonushree Mondal Consulting LLC
We often trip ourselves up by not being laser-focused on alignment and impact. We need to consider alignment with the strategic business goals and how our deliverables impact business. We say we want a seat at the table, but what do we do with that seat? How do we drive and influence business imperatives, champion human-centered strategy and leadership? How comfortable are we with challenging the status quo? - Maria Miletic, Blue Prism Software 041b061a72