Strategic HR Planning

As a part of study on ‘Best Employers in Asia 2007', Hewitt examined the issue of HR effectiveness. Key areas used to assess HR effectiveness included HR Strategy, HR structure, HR costs, service delivery models, and HR measurement.

The CEO and employee assessments were used to calculate an HR Effectiveness score, which differed greatly between The Best and The Rest, shown as below :

  The Best The Rest
HR Effectiveness as rated by CEO 97 % 73 %
Employee rating of HR Effectiveness 79 % 44 %
Overall HR Effectiveness rating 88 % 58 %

Globalisation has led to an innovative boom across industries, where companies need to continuously push the boundaries of innovation in order to compete. Therefore, with the growth of industry, the need for highly skilled talent becomes all the more critical to a company's success.

Today's Talent, Tomorrow's Leaders


A dream? No.

This is the reality at organizations that steadfastly focus on exceptional “ Talent Development ”. In the series of articles that would follow, we shall be talking about the present day situation and the role of HR Professionals in “ Talent Development System ”.

The driver is the ‘ human resource strategic planning system ', which indicates the talent required to execute the strategic plan. It is enabled by recruitment and selection, career management, training and development, succession management, compensation and benefits, and performance management systems.

However, developing an effective human resource development plan is not as simple as developing a number of charts or spreadsheets.

HR strategic planning is creating a vision of the future and managing the planning at macro as well as micro level to transform that vision into reality.

This exercise needs a broad range of activities including image building (having a recruitment  value  proposition), developing job descriptions, talent acquisition, goal setting, performance management etc. Such a plan needs to  be formulated  for a long-term vision. However, in all cases it is advisable that strategy needs to be developed with the current business scenario and  with “best practices”, being implemented by best employers.


What process do we use?

Decide where your organisation is now in the lifecycle of an enterprise: the start-up stage, the growth stage, the mature stage or the decline stage. Then formulate a clear picture of your future and look for ways of getting there.

The model you use should therefore begin with the future :

A Strategic Human Resource Planning Model :

There is no single approach to developing a Human Resources Strategy. The specific approach will vary from one organisation to another. Even so, an excellent approach towards an HR Strategic Management System is evident in the model presented below. This approach identifies six specific steps in developing an HR Strategy :


Source : A Strategic Human Resource Management System for the 21st Century. Naval Personnel Task Force, September 2000

 The six broad interconnected components of this system consist of three planning steps and three execution steps. The top three components represent the need for planning. Organizations must determine their strategic direction and  the outcomes they seek. This is usually accomplished with some form of strategic planning.  Classic  strategic  planning is a  formal, top-down, staff-driven process. When done well, it is workable at a time when external change occurs at a more measured pace.

Once strategic planning is under way, a process must be undertaken by the organization to design and align its HRM policies and practices to provide for organizational success. The remaining step in planning is  to determine the quality and quantity of human resources the organization needs for its total force.

The rest of the HR  strategic  system  exists for and is  guided  by  these  plans,  policies,  and  practices.  These  execution components  contain  mechanisms  that  generate  the  correct  skill sets,  invest in staff  development and  performance, and productively employ them in the organisation. The  last  component  provides a means to assess and sustain the competence and performance of the organization and the people in it with regard to outcomes that the organization seeks.

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