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Human resource planning is an activity undertaken by the human resource function within an organization to assure that human resource actions and activities are properly aligned with the overall business or organization strategy. Traditionally, the term human resource planning referred solely to the practice of examining the number of anticipated openings, comparing that with the labor market trends and ensuring that the appropriate actions were taken to fill those positions. Human resource planning in the 21st century is a much more comprehensive set of analyses and examinations to ensure that the human resource function optimally contributes to the organization's overall business success.

As the human resource function transitions away from a primarily transactional or administrative function and strives toward creating stronger business partnerships within the organization, the need for thorough and accurate human resource planning increases. The process of human resource planning is likely to be unique to each organization; however, the most common steps to human resource planning are as follows:

  • Thorough analysis of both the internal and external environment, which includes an analysis of the current state and the anticipated future state
  • Examination of the internal and external analysis and determination of the human resource implications
  • Creation and implementation of a human resource strategy to support business endeavors
  • Monitoring and evaluation of the appropriateness and effectiveness of the human resource strategies

Each of the aforementioned steps is reviewed in more detail next.

Analysis of Internal Factors

Thoroughly examining information internal to the business or organization is a critical first step to human resources being seen as a viable business partner. This examination should begin with a review of the business goals, both long and short term. Only after truly understanding the changing nature of the business goals can human resources be prepared to support the business with these new objectives.

The internal factors examination should also look to anticipate the future personnel that will be needed to help the organization achieve its business goals. When considering future personnel needs, it is important to focus on skills and abilities needed in additional or shifting resources, not just on raw numbers of individuals needed.

The internal analysis could also focus on the current internal environment through the gathering of employee opinions via survey and/or actively maintaining a turnover analysis, to better understand how many and what type of employees are leaving the organization, and for what reasons. In addition to an environmental or culture analysis and/or turnover analysis, the human resource team should examine critical talent within the organization and the succession plans to determine if indeed the organization has the internal manpower needed to achieve the business goals.

In sum, the internal analysis should include an examination of the current state of the business and, more importantly, the future business goals and direction. After understanding the context provided through the business goals, a closer analysis should be made of the organizational environment and the personnel available and needed for future success. This information should then be coupled with the external or environmental analysis findings before devising a human resource strategy.

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