In this article, we’ll discuss the benefits of human resource planning, how it affects employees, the core elements of a successful workforce plan, and how technology can help.
But first, let’s quickly recap on what human resource planning is.
What is human resource planning?
Human resource planning (HRP) is the process of managing your company’s current human resource needs and forecasting future workforce demands. The aim? To ensure that the right people—with the right skills—are available at the right time and place.
To do this, you’ll need to analyse current and future business requirements, and identify the skills, knowledge, and experience you need. It also involves identifying any gaps between the current workforce and future requests and developing strategies to address those gaps.
For example, consider an IT firm that expects a surge in demand for cloud services. Through human resource planning, they may identify a shortage of cloud architects and developers. To address this gap, they could implement targeted hiring, training programs for existing employees, or a combination of both. This proactive approach ensures they have the right talent and skills to meet evolving business requirements and remain competitive.
Top tip: This is something our human resource planning and management software and talent management software does very effectively. (More on this later.)
Your businesses can use it to assess staffing needs, ensuring they can meet the demands of your business and customers. It also helps to avoid any shortages or surpluses in the workforce.
You can then improve your employee management, recruitment, and training, while offering an opportunity for your managers to address employee concerns and to improve job satisfaction. Win-win.
As an interesting side note, most project managers still use Excel for resource planning. Yet while tools like Excel are easily available you have to be aware of their limits. If you're keen to learn more, you'll love our new ebook on how to go beyond Excel for resource planning.
The benefits of human resource planning
When done effectively, there are many benefits of human resource planning, including:
Let’s briefly run through each one.
1. Increase productivity
Effective planning ensures that the right people are in the right roles—at the right time. Productivity will likely increase when your employees are well-suited to their roles, and have the right skills, knowledge, and resources to perform their jobs effectively. HRP can also help you fix inefficiencies and bottlenecks in your projects, further increasing productivity.
2. Reduce costs
By reducing turnover and the associated costs of recruitment and training, and by identifying opportunities to optimise staffing levels, you can cut overall labour costs. HRP can also help you avoid over or understaffing, which can lead to unnecessary expenses or lost revenue. In fact, this is one of the most important benefits of human resource planning.
3. Cope with change
You can use human resource planning to create robust measures that deal with varying customer demands, business expansion, and political and economic conditions. For instance, an IT firm might experience an increased demand for cloud services due to changing customer preferences or new regulations favouring cloud adoption. Through human resource planning, HR can analyse these shifts. They may need to upskill existing employees in ERP cloud technologies, recruit new talent with specific cloud expertise, or reorganise teams to better serve cloud customers.
4. Better strategies for retaining talent
Retaining high-performing employees is crucial for your businesses to minimise attrition costs. With HR planning, you can spot factors that keep employees engaged, then create programs that support their welfare, such as competitive compensation, employee engagement, and building a positive work environment.
5. Hire quality candidates
The right approach to planning can help your company hire only the most qualified individuals, allowing you to determine the skill sets needed for a specific role, create an interviewing process, and ask the right questions. Effective HR planning also allows you to prepare for your current and future staffing needs, encouraging growth and expansion.
6. Meet staffing needs
Because HR departments are responsible for recruitment and staffing, effective planning can ensure your staffing needs are met, which can prevent potential problems that come along with losing members. For example, HR planning can prepare ahead of time for any vacancies should an employee resign, or handle the hiring process in case of an urgent need to ramp up.
7. Facilitate expansion programs
As your company grows, the demand for human resources increases. Whether it’s as simple as scaling up through massive hiring, or as complex as mergers and acquisitions, HR planning is essential. You can better understand the talent requirements and cultural nuances of scaling into new areas. And then develop strategies to attract and retain the right people with the necessary skills and cultural fit.
8. Train and develop employees
On the surface, reskilling the workforce might not sound too daunting. However, the statistics are telling. According to the World Economic Forum’s Future of Jobs Report, 50% of all employees will need reskilling by 2025.
This is where a clearly-defined training program comes in. It allows you to strengthen the skills of your employees and equip them with the latest techniques and knowledge to help them smash their own targets.
9. Effective performance management
The majority of Senior HR Managers (75%) agree that collaboration, constant communication, and a mentorship culture will be the mandate of a high-performing workplace. With this in mind, it’s clear that performance management needs to change from ‘the annual performance review’ to a more continuous process of regular feedback. A central hub with detailed insight on employees' skills, client engagements, should help with this.
10. Improve decision-making
According to a 2020 McKinsey Global Survey, “companies lack the talent they will need in the future: 44% of respondents say their organisation will face a skills gap within the next five years, and another 43% reported existing skills gaps.”
In other words, 87% say they are either experiencing a skills gap now, or expect to very shortly. The good news is, with insight on future staffing needs and workforce challenges, you can make better decisions about staffing, training, and development, and you’ll be better equipped to respond to changes in the business environment.
11. Boost employee engagement and morale
Year in, year out, HR statistics show that employees want to be recognised. In fact, according to Fortune, 37% of employees say that recognition would encourage them to produce better work. Of course, this makes sense. When employees feel that their skills and contributions are valued, they’re more engaged and motivated to perform each task to their best ability.
The right approach to human resource planning can help you create a positive work environment and to develop programs and policies that support employee well-being, which can boost morale.
12. Gain competitive advantage
Lastly, by anticipating and addressing future needs, you can stay ahead of the competition, attract and retain top talent, develop new products and services, and respond to changes in the market more quickly and effectively. This can help your business gain a competitive advantage and long-term success.
How does human resource planning affect employees?
It sounds obvious, but while human resource planning has many benefits for businesses, it also positively impacts employees. Here are just a handful of the benefits:
Job security
If you implement HR planning effectively, it should provide employees with better job security by ensuring that your company’s prepared for any changes that may affect the workforce, like downsizing or expansion plans.
Career development
HRP can provide opportunities for your employees to develop skills and advance in their careers. For example, by identifying the skills needed for various roles within your business, HR planning can help you create training programs and career development paths designed to help employees improve their skills and qualifications.
Employee satisfaction
If your employees feel valued and supported, they’re more likely to be satisfied with their jobs and motivated at work. As we mentioned, HR planning can help you create policies that promote the welfare of your employees, including health and wellness seminars, work incentives, and flexible shift arrangements.
Performance management
HRP can also support performance management by providing a standardised process for performance reviews. When managers use a consistent process for evaluating employee performance, it should help create a fair and transparent work environment.
If you’re thinking; “I know the benefits, but how do I actually go about creating a best practice approach to human resource planning?” This next section is for you.
How to use software for human resource planning
Human resource planning has many moving parts. While it used to be possible to handle them using basic tools, it might be time to consider specialist software once you reach this point:
➡️ You’re struggling with a workforce skills gap and it’s hard to schedule and match projects to the right talent based on skills and availability
➡️ You’re finding it difficult to keep a central repository of talent profiles, skill sets, work experience, and more.
➡️ You don’t have the ability to keep things secure and can’t manage things like access controls, and read, write, and edit access.
To improve human resource planning effectively and sustainably, HR teams should look at more than just updating existing processes.
According to author and Salesforce growth expert Tiffani Bova, there are five main factors that will improve the employee experience, and Bova cites technology as central. At the same time, Gartner reports that 46% of HR leaders say human resource technology was their top priority last year.
A user-friendly human resource management platform, like Retain, provides features that can help HR teams and talent to be more productive and cost effective:
🟢 Optimise the resource scheduling process by finding out who has the right skills, availability, and capacity—and where current and future gaps are.
🟢 Drill down into as much detail as you need, like specific skills, certifications, charge rates and more.
🟢 Self-service profiles empower employees to manage their own talent profiles.
🟢 Easily report on key talent and resource metrics.
🟢 See up to 12 months utilisation reporting to understand who’s got capacity to take on more, and discover gaps in talent or skills you need to fill.
In short, digital human resource platforms can help you become more efficient, automating manual work such as data entry, reporting, resource skills matching, scheduling, and much more.
“I really like using Retain Cloud because it’s user-friendly, very flexible, and customisable to your own liking,” says Selmi van Staden, Director, Pitcher Partners. “The onboarding and set-up were quick, with only half a day needed to configure and get the data format right. The customer support team are also very friendly and responsive which is amazing given the time difference.”
The benefits of human resource planning: A quick round-up
Human resource planning offers various benefits for businesses, giving you better insights into how to grow your business. It’s a vital process that can help you retain top talent, address your staffing needs, and build effective expansion programs, which should help put your business on the path to long-term success.
There’s a lot at stake—employee satisfaction and business growth included.
But you don’t have to go it alone.
Being strategic about how you streamline your HR systems with technology eliminates waste and blockages and allows your business to run more smoothly and more profitably.
If you’re ready to see how the right HR technology can make your life easier, why not get in touch with us for a personalised demo.
Looking for more? Check out our complete guide to resource planning.
