5 steps to creating an effective HR business plan May 3, 2018

5 steps to creating an effective HR business plan

A basic business plan will involve creating goals to start a business, expand an existing business or implement a project, and developing ways to achieve the goals. Human resources generally refers to an internal department that handles the hiring, training and paying of employees. Without adequate staff, in terms of quantity and quality, a business will be unprepared to execute its plan.

Small business owners often face setbacks without a written HR business plan, such as, costly employee turnover, procedural bottlenecks and inconsistent productivity. A HR plan is a practical and tactical tool that can help you determine exactly where you're going and drive your business forward.

Here are five critical steps to creating an effective HR plan for your company:

Assess current HR capacity

The first step in the human resources planning process is to assess your current staff. Before making any moves to hire new employees for your company, 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.

Have a Succession Plan

Eventually your business will face changes in management; this is an unavoidable part of the natural growth of any organisation. Managers will come and go and positions will be created and dissolved as you continue to expand and re-organise.

You'll want to be ready for this when it happens by having a succession plan already in place. It will be up to you whether you want to include your employees in the creation of this succession plan or not. Either way, be aware of their career goals and what their plans are for the future - don’t hesitate to inform them when changes are taking place.

By doing this you’ll be aware of what the most important positions in your company are and who may have the skills to fill those positions.

Outline how you will motivate and retain employees

You need the right people to stay on board to take your company further. A HR plan will outline your key strategies to motivate employees and maintain their loyalty.

Being creative with employee perks, rewards and compensation is one of the first steps. For example, your HR plan can clearly address motivational strategies such as profit-sharing or short-term rewards that involve personal or family life, such as entertainment vouchers.

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.

Conduct a Gap Analysis

A gap analysis is a formal study comparing the resources your company currently has to what they may need as they grow and develop in the future. If your HR services are outdated, or in danger of becoming outdated, a gap analysis will reveal this and allow you to make the necessary improvements to keep your company going strong for years to come.

HR planning is an ongoing process. Your strategy should be reviewed regularly and updated as your organisation changes.

Looking for HR management courses to help with your HR business plan? Read about our HR courses and contact us for information on the human resources courses we can offer you.