business plan human resources

We use essential cookies to make Venngage work. By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

Manage Cookies

Cookies and similar technologies collect certain information about how you’re using our website. Some of them are essential, and without them you wouldn’t be able to use Venngage. But others are optional, and you get to choose whether we use them or not.

Strictly Necessary Cookies

These cookies are always on, as they’re essential for making Venngage work, and making it safe. Without these cookies, services you’ve asked for can’t be provided.

Show cookie providers

• Google Login

Functionality Cookies

These cookies help us provide enhanced functionality and personalisation, and remember your settings. They may be set by us or by third party providers.

Performance Cookies

These cookies help us analyze how many people are using Venngage, where they come from and how they're using it. If you opt out of these cookies, we can’t get feedback to make Venngage better for you and all our users.

• Google Analytics

Targeting Cookies

These cookies are set by our advertising partners to track your activity and show you relevant Venngage ads on other sites as you browse the internet.

• Google Tag Manager
• Infographics
• Daily Infographics
• Popular Templates
• Accessibility
• Graphic Design
• Graphs and Charts
• Data Visualization
• Human Resources
• Beginner Guides

Blog Human Resources 6 Steps to Create a Strategic HR Plan [With Templates]

6 Steps to Create a Strategic HR Plan [With Templates]

Written by: Jessie Strongitharm Aug 25, 2022

The backbone of any successful business is the people and processes behind it — that’s why creating a human resources (HR) plan is key. This strategic document drives your business forward by evaluating where your workforce is at, and comparing it to future needs. 

Without an HR plan, organizations can suffer from issues that would have otherwise been avoided. From productivity pitfalls to costly employee turnover, there’s no shortage of risks you can sidestep if you do human resource planning in advance. 

Not sure where to start? No worries. I’ve outlined six steps you can take to create an effective HR plan that ensures your organization is well-staffed and well-served. You’ll also find a variety of  HR templates  that you can customize in just a few clicks — no design expertise required. 

Click to jump ahead:

What is human resource planning?

• Assess employees’ current skill levels
• Forecast your labor needs based on available information
• Revisit your organizational design
• Outline how you will manage, motivate and retain talent 
• Align your workforce planning with your budget 
• Establish KPIs for your human resource planning objectives

Human resource planning is the process of considering the current and future “people needs” of an organization.

This involves evaluating an organization’s workforce structure and protocols to ensure operational goals are met, productivity stays high and future demands for labor and talent can be fulfilled. Staying updated with industry trends using the LinkedIn People Directory can help achieve this.

The result of this process is the creation of an HR plan, which typically takes the form of a written document sometimes autogenerated using HR software . These documents tend to follow a similar structure to most  strategic business plans  and are created on an annual basis, by HR managers or company leaders.

Check out the template below for an example. 

This eye-catching, one-page  HR Strategic Plan Template  offers a concise summary of your human resource planning efforts, so you can easily share info with colleagues. 

Just swap out the text and visual assets for those of your choosing in  Venngage’s editor , and you’re off to the races. 

6 steps to create a strategic HR plan

Ready to create a strategic plan for the human resources that power your business? Here are six steps to help you succeed at the human resource planning process.

1. Assess current employees’ skill levels

The first step to creating a future-forward HR plan is to assess employees’ current skill sets, and compare them to your operational needs moving forward. This will help you identify gaps and inform any hiring of new employees.

Employees’ skill levels can be assessed by reviewing their work history, hard and soft skills and professional growth over time. 

Using a matrix is a great way to understand where the skill gaps in your current workforce exist. Below is an example that describes the skills needed for different marketing roles. 

Don’t need it for marketing specifically? No worries — you can fully customize this template by swapping in your own text to examine any human resource gaps. 

Another way to assess skills is by giving employees a questionnaire they can fill out. This  Employee Competency Assessment Template  does just that.

Based on the information collected, you’ll get a sense of what positions best suit each individual, and whether any upskilling or hiring is required. 

2. Forecast your labor needs based on available information

Next in your strategic strategic HR management plan, you’ll want to consider the future. This involves accounting for any upcoming changes to your workforce, so operations can continue without error.

When forecasting labor needs, the following should be considered: 

• Planned promotions
• Upcoming retirements 
• Layoffs 
• Personnel transfers 
• Extended leaves of absence (i.e. maternity/paternity leave) 

Beyond those, it’s a good idea to assess the impact of external conditions on your labor needs during your human resource planning. For example, new technological developments may decrease the amount of employees you require to operate your business. 

3. Revisit your organizational design

Organizational design is the process of structuring the way a business operates so it can best achieve its goals. This is hugely important when it comes to your human resource planning process! 

With a clear understanding of your organization’s strategic objectives in mind, reviewing your organizational design allows you to understand the staffing requirements you’ll need to succeed at them. This means taking into account your  organizational structure  and chains of command, as well as how work gets done and the way information flows.

 From there, you’ll be able to see which departments need more team members so it can accomplish the organization’s objectives. 

An easy way to get started is by using an organizational flow chart. 

With its color coding and layout, even a new manager can quickly look at this chart to identify the people responsible for leading teams and making decisions. 

And if there are any changes, it’s easy to to reflect them in the chart itself. All you need to do is customize the text and visual assets in  Venngage’s Chart Maker  as desired. 

Not quite your style? There’s plenty of other  organizational chart templates  to choose from. 

Here’s an organizational chart that’s perfect for small businesses that have limited employees. One quick look, and you’re good to go. 

The bottom line is, no matter how big or small your business may be, you should always revisit your organizational design to optimize your workforce management and business operations. 

Related:  Types of Organizational Structure [+ Visualization Tips]

4. Outline how you will manage, motivate and retain talent 

In this day and age, it’s a known fact that companies must provide more than just a paycheque to attract and retain talent, and encourage growth. 

It’s true —  studies have shown  employees are more engaged in their work when they feel it is meaningful, fulfilling and slightly challenging. So your human resource plan should consider how to inspire such feelings, and what actions you can take to motivate employees to stay. (Hint: a strong HR training and development program is key.)  

The  talent management infographic template  below is a great way to begin. 

Using this  process chart , you can detail the steps you’ll take to retain the talent you have. Reference it as needed in your human resource planning.

 Another great way to keep staff motivated and geared towards their professional growth is by coming up with  ideas for employee development . Facilitating a company culture that champions continuous learning guarantees your team will feel supported and challenged in all the right ways.

The two employee development plan templates below will help you do just that. 

Though both templates are geared towards healthcare organizations, it’s easy to customize their content in Venngage to promote the continuous learning and development of employees in any industry.

 As a result, your employees will be able to reach their full potential, while simultaneously supporting the long-term goals of your organization. 

Related:  6 Employee Development Ideas for Efficient Training

5. Align your workforce planning with your budget 

 Let’s face it, human resources ain’t cheap.

 Meaning, if you struggle at organizing and monitoring your HR budget, you’re bound to overspend on your initiatives —and no financially savvy business wants that. 

That’s why I recommend including financial information in your HR planning process, so you can reference your budget and expenses as needed. This includes not only hiring and training costs but also the complexities of managing a global payroll for diverse teams.

Ensuring this allows you to stay within range as you work towards achieving your strategic goals for human capital . Plus, you don’t need to use one that contains walls of text and wack-loads numbers. Check out the clean and cheery option below — it’s as easy to fill out as it is to understand. 

And if you’re looking to compare a forecasted budget to previous annual spending when strategizing your HR budget, the  Budget Comparison Infographic Template  below will help. 

The bar graph is a great  data visualization  of annual expenses, organized by category. Just add (or import) any values to Venngage’s editor, swap out the text, and you’re ready to compare with ease. 

Related:  10+ Expense Report Templates You Can Edit Easily

6. Establish KPIs for your human resource planning objectives

Measurable results are important when it comes to your HR planning processes, because they indicate whether your strategy is working or not. 

Keeping those metrics in mind, your company can make adjustments and improve upon any future plans — AKA strategize for future success in business. That’s why your human resource plan should include info re: the specific key performance indicators (KPI) you’ll be measuring. 

KPIs are established to help determine if HR strategies and plans are working. Much like those used for evaluating the performance of  marketing  or  sales plan , KPIs for human resources are measurable results that indicate an organization’s success at achieving predetermined goals.

These may take the form of headcounts, turnover rates, demographic information, time to hire and employee satisfaction scores. 

Here’s one employee satisfaction survey you can use to understand your workforce better. 

When you’re ready to organize those HR KPIs in a document, the  recruiting template  below is perfect for keeping tabs at a glance. 

Related:  10+ Customizable HR Report Templates & Examples

How do I make an HR plan? 

After you’ve collected the data you need, you’ll want to convey this info in an engaging, professional manner for easy referencing and sharing amongst colleagues. Given this, using Venngage is the best route to go. 

Here are the simple steps to help you bring an actionable HR plan to life: 

• Outline the information you would like to include in your strategic hr plan
• Pick the human resource planning templates that best suits your needs 
• Customize the templates’ text and visual assets so they speak to your organization 
• Apply your company’s brand guidelines with a few clicks using Venngage’s automated branding feature,  My Brand Kit
• Download and share as desired

Note: sharing is available free-of-charge. However, the option to download your creations and access features like  My Brand Kit and Team Collaboration  are available with a  Business plan . 

FAQ about HR plans

How long should an hr plan be .

There are no hard and fast rules when it comes to the length of an HR plan. That being said, if you’re going to share it with colleagues, you probably don’t want to create a 20+ page document. One to five pages should suffice. 

Try to be as concise as possible when relaying the facts, and use  data visualizations  wherever possible to save room.

Do I need an HR contingency plan?

In the same way creating an HR plan is a proactive move that helps your organization account for future needs, it’s a good idea to devise an HR contingency plan. This ensures there’s a back-up plan in place should your initiatives not go as expected. 

For example, if you’ve identified that you need five new hires to keep up with consumer demand, but the talent pool is lacking, a contingency plan could house suggestions for restructuring your workforce to mitigate this. 

In other words, it’s best-practice to hope for the best, but prepare for the worst. 

Is an HR plan different from an employee development plan?

Yes. While an HR plan is a strategic document describing how an organization addresses its personnel-related needs at a high-level, an  employee development plan  outlines the processes needed to help an individual achieve their professional goals.

 Even though the human resource planning process may involve outlining some employee development tactics, it is not unique to each employee as in the case of an employee development plan.

Make your HR planning processes effortless 

You don’t need a crystal ball to feel confident about your people moving forward. With a solid HR plan and strategy in place, you’ll prime your workforce — and all business endeavors — to succeed in even the most competitive of markets. 

Just remember this: human resources planning, and creating strategic business plans in general, doesn’t have to be exhausting. 

With Venngage’s huge selection of  professionally-designed templates  and easy-to-use editor, all it takes is a few minutes to produce a polished document perfect for all your needs.  Sign up for free today ! 

Discover popular designs

Infographic maker

Brochure maker

White paper online

Newsletter creator

Flyer maker

Timeline maker

Letterhead maker

Mind map maker

Ebook maker

10+ SAMPLE HR Business Plan in PDF

Hr business plan, 10+ sample hr business plan, what is a hr business plan, areas of human resources, tips to improve human resource management , how to create a hr business plan, what is a hr business plan, how do you write a human resources business plan, what are the 7 major hr activities.

HR Business Plan And Budget

7 Steps for HR Business Plan

HR Secretariat Business Plan

HR Strategic Business Plan

Sample HR Business Plan

HR Business Plan Example

HR Department Business Plan

HR Approved Strategic Business Plan

HR Business Plan Summary

HR Budget and Business Plan

Step 1: establish the objectives, step 2: clarify the roles and job descriptions, step 3: assess the programs and resources, step 4: identify the strategies , share this post on your network, you may also like these articles.

In this comprehensive guide, we explore the essentials of creating an effective Floor Plan. Whether you are designing a new home, renovating an existing space, or planning an office…

Nursing Care Plan

In this comprehensive guide, we explore the essentials of creating an effective Nursing Care Plan. Whether you are a nursing student, a new graduate, or an experienced nurse, this…

browse by categories

• Questionnaire
• Description
• Reconciliation
• Certificate
• Spreadsheet

Information

• privacy policy
• Terms & Conditions

• Search Search Please fill out this field.
• Building Your Business
• Becoming an Owner
• Business Plans

Management and Human Resources Business Plans

The management portion of your business plan, the hr portion of your business plan, frequently asked questions (faqs).

As a startup, it’s never easy to come up with a business plan, let alone the management and human resources sections of a business plan. Despite that, it’s important that you start your business plan for human resources as soon as possible. Doing so gives your management goals a plan that will guide you and keep your business on track as it grows. 

The key components of your human resources business plan should include your organizational structure, the philosophy and needs of your HR department, the number of employees you want to hire, how you plan to manage them, and all the estimated costs related with personnel.

You’ll want to start your HR business plan by outlining your own managerial experience and skills as well as those of your team. Highlight the roles of each member of your team, and any particular areas of strength or deficiency in your personnel lineup. For example, your HR team may be strong in compliance and conflict resolution but weak in hiring. 

Don't worry if you don’t have a complete team in place when you write your HR business plan. Simply use this section to outline the organizational structure along with job descriptions, how you plan to recruit key team members, and what their responsibilities will be.

This section should look like a pyramid with you at the top and will likely have lateral positions. Be as specific as possible when defining an employee's responsibilities because this is what will drive your business.

Do You Need an HR Manager?

If you’re a solo practitioner, you may not think of including an HR manager in your management business plan. However, if you expect to hire non-managerial employees (such as salespeople or clerical workers), you should consider recruiting a human resources manager.

If hiring a human resources manager can’t be done, consider a human resources consultant. Human resource management requires an immense amount of time and paperwork, and an experienced HR consultant will be able to quickly get your payroll and benefits program up and running, affording you more time to concentrate on growing the business. Human resource responsibilities should include:

• Handling FICA and unemployment taxes and paperwork
• Ensuring compliance with the Family and Medical Leave Act
• Staying on top of IRS filings

There are plenty of companies that offer HR management platforms tailored to each business's needs. Research these companies and be sure to include their estimated cost in your HR business plan.

When you develop the HR portion of your business plan, begin by including a brief overview of your HR strategy. Investors may be curious about how your payroll will be handled and the associated costs of administering it, as well as the type of corporate culture you plan to create. Specific items to highlight in the HR section include:

• Payscale: Show the salaries for managers and non-managers based on the market for those jobs.
• Vacation time: Describe your vacation-time policy. How much time do employees get? How quickly does it accrue? Vacation time is not required by law, but most firms offer vacation time to stay competitive and keep employees refreshed. 
• Insurance: Health insurance is a common staple benefit, although skyrocketing prices have forced many firms to cut back on this benefit. If you can’t afford a health plan, look into subsidizing one with employees paying the rest. Alternatively, inquire if a professional insurance representative can help you get a bulk rate.
• Additional benefits: Other things to consider include life insurance, a 401(k) and matching funds, bereavement leave, religious and floating holidays, and a bonus structure, if applicable.

In addition to the key elements above, it helps to have a framework from which to build your HR business plan. Here’s a basic outline that can help you get started: 

• Figure out what your human resources department would need. 
• Determine a strategy for recruiting talent.
• Formulate your hiring process. 
• Develop a training program for new employees. 
• Determine how much you want to pay your team (this is a good spot for payscale info)
• Create performance standards

It may be overwhelming to contemplate these benefits and their costs in the early stages of setting up your business, but in a competitive labor market, your firm needs to offer enough to entice qualified people and, more importantly, to keep them happy.

Consider revisiting your management and HR business plans every couple of years to see if you need to create action steps to refine your processes.

What should be in an HR business plan?

An HR business plan should include a mix of the steps you plan to take to launch an effective HR department, as well as specifics about how you plan to handle time off, insurance, and other benefits you plan to offer.

How do I write a human resources plan?

It helps to start with a simple framework. Try to break the plan down into sections: HR needs, recruitment, hiring, training, pay, and performance reviews. From there, incorporate other aspects of HR, like benefits and promotions.

U.S. Chamber of Commerce. " Does Your Small Business Need an HR Department? "

 University of Minnesota. “ Human Resources Management: 2.2 Writing the HRM Plan .”

Mecklenburg County, North Carolina. “ FY 2020-2022 Strategic Business Plan: Human Resources .”

HR Business Plan Template: Everything You Need to Know

With an HR business plan template, you can help your company recruit new employees, retain existing employees, and guide the development of the workforce. 4 min read updated on September 19, 2022

With an HR business plan template, you can help your company recruit new employees, retain existing employees, and guide the development of the workforce so that you collectively meet your business objectives, regardless of any changes in the industry or economy.

When creating your HR business plan, you need to perform a needs analysis of your workplace to tailor the plan to your company's requirements. You'll also need to learn about the industry standards for your field to make sure you're competitive.

Without such a plan in place, your workers will feel unprepared and won't know how to work towards your company's overall goals.

Steps for Developing a Human Resources Department Business Plan

There are several steps to creating an HR business plan. They include:

• Clarify the requirements . While you might be tempted to create a detailed plan that encompasses the entire company's next 10 years, hold off. Always talk with your boss to see how much detail he or she would like in the plan. This will save you time and help streamline the process. However, there's no harm in creating your own personalized strategic plan for your specific department.
• Read through the HR job descriptions . The HR department typically has employees such as HR assistants, HR generalists, and an HR director . Read through the job descriptions for each worker in the department and see what kind of duties are missing. Brainstorm additional functions that each job role could provide to the company.
• Curate your list . Take the different functions you've brainstormed and compare them to what each member of the HR department is already doing. Are there functions you could add or subtract from each employee for more productivity? You don't have to go into detail here, but just think about how you could improve each role.
• Schedule a meeting with the executives . Before you make any changes, you'll obviously need to get input and approval from the company's executives. They may have more feedback on how the HR department can provide additional services and support the company's overall goals and mission.
• Create a feedback form . Come up with a list of questions to ask leadership about HR's role in the company and provide it to them in advance of the meeting so they have time to think it over and talk with their staff. You may even want to provide a rating and ranking format for the questions, as this will make their responses easy to understand and implement. Overall, this is a key process to understanding what management and employees want and need from the HR department.
• Look at external resources . While the internal information you're collecting is the most important, it also doesn't hurt to take a look at data from professional organizations and websites, such as the Society for Human Resource Management , The Balance , or HR Magazine . You can also ask colleagues from other local organizations for tips on creating your business plan.
• Use this information to make a plan . With your ideas, feedback from executives, and tips from external resources, you should have a clear idea of what your plan should look like. The things that are missing from the HR department should now be clear, and this should guide you on what to focus on to improve HR's contribution to the company.
• Identify goals for this year and next . While your plan can have long-term goals, keep the majority of them a little bit shorter in scope to see how things work out. This gives you the chance to reorganize and restructure if things aren't going right. Consider creating a list of accomplishments you can reach for the end of this year and into the next.

A Real Life Example

If you're seeking more guidance on how to create a successful HR business plan, look to Starbucks as an example.

As the world's largest coffee chain, Starbucks had $21.3 billion in sales in 2016.

Despite these massive numbers, Starbucks maintains the same approach to their human resources department. All of the HR planning is guided by the company's organizational strategy and brand.

Their strategy is to use specific interview techniques when hiring new employees. This lets them identify potential leaders and place them in a "New Partner Orientation and Immersion" training program. With this system, Starbucks has achieved the lowest employee turnover rate in the quick-service restaurant industry.

Starbucks also offers numerous employee perks and dedicates a lot of time to employee training through an online portal that teaches employees essential job skills.

If you need help with your HR business plan template, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• HR Compliance
• SPHR Certification
• Human Resources Management
• LLC Business Plan Template
• Details of a Business Plan
• Business Plan Management Structure: What You Need to Know
• CCP Certification
• Service Business Plan
• Creating a Business Plan

Use Human Resources Planning to Forecast for (Less) Risky Business

By Becky Simon | October 18, 2017 (updated July 21, 2021)

• Share on Facebook
• Share on LinkedIn

Link copied

No organization can afford the risk of a critical skills shortage. Human resource planning (HRP) helps to ensure that you have the right people on your team - those with the skills to compete, innovate, or grow your company.

How do you anticipate workforce needs in a business environment where the rate of change is increasing while the number of people with the right skills is shrinking? The answer is human resource planning. In this article, five experts share their perspectives on what’s needed to operate comfortably in rapidly changing times. While human resources (HR) forecasting isn’t an exact science, you’ll find ideas and processes, examples, and templates that you can use to forecast more confidently, manage operations, and take control to increase current and future profitability.

What Is the Meaning of Human Resource Planning?

Human resource planning, also known as workforce planning , helps organizations recruit, retain, and optimize the deployment of people needed to meet strategic business objectives and to respond to changes in the external environment. In order to proactively avoid talent shortages or surpluses and achieve a balance of talent based on need, effective human resource planning is an ongoing, systematic process.

Darrin Murriner is the author of Corporate Bravery , a field guide to eliminating fear-based decisions, and the Co-founder of Cloverleaf.me , a technology platform that helps business leaders and managers build thriving teams.

He says, “Human resource planning and organizational strategy connect at the hip. You can't deliver business strategy without making sure you have the right human capital you need in the right places for the task at hand.”

Smart companies get the human capital part right by implementing a tactical human resource plan that connects directly to organizational and human resource strategies.

Starbucks: Serving Up Human Resources Planning Derived from Mission and Strategy

Starbucks, the world’s largest coffee chain, recorded $21.3 billion in sales for 2016, ranking it at 131 on the 2017 Fortune 500. The company projects that it will reach $35 billion in sales by 2021 by opening 12,000 stores over the next five years , the majority of them in China. How do you plan human resources with such a massive growth goal? For Starbucks, their approach remains the same no matter where stores are located. Their human resource planning flows from its organizational strategy and its brand. People are Starbucks’ primary resource, as their mission clearly states: "Our mission: to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time." 

An important aspect of Starbucks’ human resource planning is its selection process, which uses specific interview techniques to determine if potential employees are ‘on brand’ and evaluate their skill sets. The company identifies capable company leaders and hires them using a program called "New Partner Orientation and Immersion." This human resources planning approach has led to the lowest employee turnover rate among quick-service restaurants. While most quick-serve restaurants range between 150 to 400 percent turnover, Starbucks’ rate is 65 percent . The company is always on the lookout for new employee perks and focuses energy on employee training, which includes an elaborate online portal that offers an instruction program imparting the necessary job knowledge.

The Difference Between Strategic Human Resources Planning and Human Resources Planning

“The war for talent around the world continues to grow.” says Matthew Burr, Moderator of the Upstate HR Podcast and Principal at Burr Consulting, LLC , a human resource consulting firm focused on small and medium organizations. To win the human capital competition, companies should use a strategic human resource plan as a roadmap to achieve three- to five-year goals. Strategic plans influence the development of tactical resource planning (Starbucks being a prime example). For example, a human resources strategic plan may include long-term aims to recruit and retain an excellent staff with a high-level of technical expertise. The tactical plan would include detailed action plans with completion due dates. For the strategic recruitment goals, the tactical program might consist of short-term goals, such as benchmarking salaries via survey data, or creating a social media campaign to identify and recruit technical professionals. The plan may also target filling IT positions through international recruiting.   

Both strategic and tactical human resource plans support the overall organizational strategy. To learn more about strategic human resources management, read Welcome to the HR Revolution: Strategic Human Resources Management .

Why Is It Important to Plan Human Resources?

Our world is increasingly one of swift technological change, constant product innovation, economic globalization, and generational and cultural shifts. Correspondingly, the life cycles of business designs and products are shortening. Companies must adapt. More than physical or financial capital, human capital efficiently adapts to this new reality. Simultaneously, human capital is at most significant risk of depreciation or obsolescence within a business — and that’s a risk that organizations can’t afford if they’re going to survive and thrive. In fact, only 12% of firms that were on the Fortune 500 list in 1955 remain on the list in 2016.

​“Talented people will always have options; Knowing succession plans, training, leadership development will be a tremendous asset to a growing firm,” adds Burr. “HR planning is critical to organizational strategy: We need subject matter experts and leaders to drive the strategy forward in evolving industries. HR planning plays a significant part in supporting strategy, as human resources are the biggest investment for any organization. Evolving laws and regulations also impact strategy internationally.  Staffing levels, recruitment and retention programs support scalability of any firm or organization.” 

Handrick says it’s all about planning for future growth. “Small businesses that are planning to open a physical or second location also need to think through their HR strategy. Most small businesses begin as sole proprietorships. They need to know when it makes sense to bring on staff, where that staff will work, their compensation, and how to offer benefits, perhaps by partnering with a professional employer organization (PEO).” 

• Improving Company Operations: Human capital management and resource planning is a driver for improved company operations and value creation. In July 2017, a group of institutional investors petitioned the Securities and Exchange Commission to disclose policies, practices, and performance of public companies’ human resources management . The petition signifies a move to use workforce analytics to measure the value of an organization’s most valuable asset in a knowledge-based economy .

“You need to work systemically,” says Adler. “Part of the operating plan has to be a workforce plan. HR has to make sure they have a place at the strategy and decision-making table. In my experience, I’ve seen that HR usually doesn’t get involved until it’s late. In this environment, you need to be moving at the speed of light and not the speed of sound.”

• The Talent Shortage and Demographic Change: In its 2016/2017 Talent Shortage Survey , the ManpowerGroup reported the highest worldwide talent shortage since 2007. Forty percent of employers are having difficulty filling positions, up from 38 percent in 2015. The Harvard Business Review article, Employers Aren’t Just Whining - the “Skills Gap” Is Real , states that “New technologies frequently require specific new skills that schools don’t teach and that labor markets don’t supply.”  At the same time, there’s a demographic change. In most developed economies, the ‘silver tsunami’ - the group of aging individuals that results from ebbing birth rates and graying baby boomers - is surging. The percentage of the U.S. workforce between the ages of 55 and 64 is growing faster than any other age group.
• Technological Change and The New Generation: Millennials now make up more than 50 percent of the current workforce — and will be 75 percent of the global workforce by 2020 . Human resources need to ride this rising tide and learn to welcome technological advancements to meet talent’s expectations and business requirements. Talent and workplace analytics will become customary, and organizations using the data will be far more competitive.
• Organizational Change: With technology driving change everywhere, organizations need to be nimble and often make significant changes in the way they do business. They also need to make changes with care. Research shows that change initiatives are more likely to fail because of poor communication, employee resistance, and failure to adequately prepare. Human resources are an integral part of change management , which is a systematic approach that applies tools, knowledge, and resources to deal with business transformation. The primary goal of change management is to successfully implement new processes, products, and business strategies while minimizing adverse outcomes. Effective change management includes and also goes beyond project management and involves leading the "people side" of the change equation. 
• Government/Legislative Changes: Each state has regulations that affect everything from employee criminal records checks, labor relations, records retention, and mileage reimbursements. Additional federal laws impact human resource management, too. Consequently, human resource professionals need to be conversant in dynamic employment law to minimize company liability. Not being on top of legislation can pose a significant risk to companies and expose them to expensive lawsuits or damage their brand, which can also be off-putting for potential hires.

Seven Steps to Human Resource Planning

There are seven different steps in the human resource planning process, but the pivot point is forecasting demand. That means that today’s human resources professionals need to have a well-rounded picture of their own company and a grasp of multiple factors to put together a plan. “Understanding the three- to five-year business strategy provides what HR must have to forecast workforce needs within the firm,” says Burr. “But there’s also a need to understand the global economy and potential growth options, laws, and regulations to add value to any HR strategy and forecast.”  

The seven steps to creating a human resource plan provide a roadmap for companies, but one size does not fit all. The amount of detail and which factors to include are different for every organization. Startup sole proprietorships working in a single geographic area will need to create an entirely different plan than a multinational enterprise. 

Step One: Analyze Organizational Objectives

Aligning HR practices to strategic objectives is fundamental to an effective human resources plan. In a perfect world, human resources management works hand in hand with other top managers so there is a clear understanding of ultimate goals, and then they focus on the human capital needed to meet them. It’s vital that the human resources plan encompasses every part of the company from product development to sales and expansion plans. 

HR Strategic Plan Template

If your company hasn’t written a strategic human resource plan, this template will help you get started. Modify the template to suit your specific needs or to focus on target areas such as benefits or retirement. Stakeholders will appreciate the basic design when they want to review important aspects of your plan.

‌ ‌Download HR Strategic Plan Template

Need more strategic planning templates to clarify goals for your organization? You can find more free strategic planning templates here . 

Step Two: Inventory Current Human Resources

If you have one, use the updated human resource information storage (HRIS) sys­tem to analyze the number of people you currently employ, along with their skills, perfor­mance, and potential. Once you determine which jobs need to be filled based on your forecast, you can then decide whether you have enough internal candidates to fill the job requirements or if you need to go to external sources or strategies to add staff. 

Employee Evaluation Template

If you don’t have an HRIS system, you can use this performance evaluation template for performance reviews and as a first step in referencing your current human resource inventory.  Adapt this easy-to-use form to gain a better understanding of the duties for each position by identifying gaps in performance and staffing when you review information in the aggregate. This template documents performance against set goals, employee evaluation, and professional development plans for the upcoming year.

Download Employee Evaluation Excel Template

Excel | Smartsheet

Step Three: Forecast Demand

Forecasting human resource demand involves estimating the number of future employees of the right quality and quantity, with a view to the company’s strategic plan over a given period of time. Forecasting demand is the most crucial part of human resource planning and the most daunting. It’s challenging for many reasons, and even more so because there are no absolute answers on how to accomplish it. 

There are two categories of forecasting methods: quantitative and qualitative. You can use both methods to track the work performance of the workforce as a whole, individuals, or business units. Qualitative reports contain anecdotal observations, while quantitative data is statistical or more data-driven. Select the methods that make the most sense in your environment. For example, in a non-manufacturing company, the work-study method which calculates the necessary working hours to produce units may not make sense. By gathering both quantitative and qualitative information, you can identify issues that are impacting your business's productivity, and then develop a well-rounded forecast to increase the company's efficiency, ensure you’re not over or understaffed, and understand future needs.

SWOT Matrix Template

The classic SWOT layout provides a clear view of your compiled findings as they relate to your human resources plan. The template also includes a column for rating the importance of each item by category so you can have a clear understanding of how the analysis elements compare and which will need the most attention. You can add Excel worksheets to hold supporting data and clarify the basis of your findings. 

Download Basic SWOT Matrix Template

If you’re looking for different formats in Excel, PowerPoint, or Word, you can find free SWOT templates here . 

Step Four: Estimate Gaps

With your forecast completed, you’ll have an understanding of future needs and if you will need to fill them with external workers hired full-time, part-time, or as contractors. If you have the right number of employees that don’t have the right skills, you can use training and development to upgrade employee skills to fill the gaps, or you may need to deploy workers in another role.

Employee Training Plan Template

Training is relevant for both employee success and team member retention. Though training takes time and effort, it's essential to have a plan in place to ensure a productive ramp-up period for new employees or existing employees who are learning the tasks and responsibilities of a new role. With this adaptable employee training schedule template, you can create training activities lists, add details about which team members need help to complete each task, track status, and provide a way for the manager and employee to enter feedback.  

Download Employee Training Template

Transition Plan Template

Moving team members to fill different roles can be the ideal solution to filling workforce gaps. When making these changes, ensure that you maintain the information and knowledge the employee had in the initial role. An employee transition plan keeps the information accessible and easy to share. You can also use this transition plan template to assist the person previously in the role train any new team members. Input every aspect of the role that will be useful in the present and future.

Download Transition Plan Excel Template

Step Five: Formulate the Human Resource Action Plan

The human resource plan relies on identifying deficits or surplus in the company. You’ll need to determine if you need to begin recruiting or training, transition, or develop voluntary retirement processes and redeployment in case of a surplus. Include priorities and critical planning issues in your plan.

Action Plan Template

This action plan template provides sections for goals, but you can add more sections to customize it to complete your human resources plan. Goals are translated into actionable steps that you can track to check progress. Assign start and end dates for each action, and take notes about each part of the plan. 

Download Action Plan Template

Word  | Smartsheet

Step Six: Integrating/Implementing the Plan

This is the most challenging aspect of any human resources plan. The organization often invests time and money on plans that are shelved and not utilized. Company executives need to grant buy-in, embrace the plan, and bring the organization on board. Overcome any potential employee resistance to the process by rolling in one aspect of the plan at a time to help employees acclimate to changes.    Staffing or Recruiting Plan Recruitment is one of the top responsibilities of any human resources team. Searching for, vetting, and finding the right talent to join your team are all crucial steps to ensure the success of your organization. Having a staffing plan in place makes your team aware of the available recruitment sources, hiring goals, and budget. Use this staffing plan to organize all staffing details with columns for budgets, hiring goals, status, and comments. 

‌ ‌Download Staffing Plan Excel Template

Candidate Screening Tracker

If you don’t have an automated system, you can track and manage applicants’ cover letters,  resumes, applications, and details about job openings. Tracking this information can be a lot of work depending on the size of the company and current hiring plan. Use this candidate tracker template to organize candidate documentation and details, and ensure that you provide a positive experience for candidates and people involved in the interview process. Track candidate contact information, phone interview questions and answers, status, comments, next steps, and more using this template.

Download Candidate Tracker Excel Template

Onboarding Plan Template

Onboarding ensures proper training and enculturation for new team members, and is also a powerful retention tool for any organization. Develop your own onboarding plan by using this template to plan activities at each stage of the process. Since a full year of onboarding is a best human resources practice, this spreadsheet shows tasks assigned to individual contacts over a twelve-month period. Add or remove columns to create a comprehensive onboarding plan.

Download Onboarding Plan Template

For more best practice information and free templates to support your human resources planning, read Top Excel Templates for Human Resources . 

Step Seven: Monitoring, Control, and Feedback

Strictly monitoring progress helps identify sticking points in your plan and helps you avoid making changes too quickly. It’s essential to compare actions to how the plan is being implemented to ensure fidelity. The human resource plan is an evergreen document that takes changing circumstances into account. Ongoing measurement, reporting, and continuous improvement efforts will keep the company moving towards its stated strategic goals. 

Project Management Dashboard Template

Monitoring all the changes you need to while executing a complicated human resources plan can be time consuming. With this customizable project management dashboard, you can compile every aspect of the process, share status information with management and other team members, and view the big picture at a glance.

‌ Download Excel Project Management Dashboard

Forecasting Is an Ongoing Process

“HRP plans should be reviewed annually, just after the business completes its strategic planning and forecasting for the year,” says Handrick. “For example, if the business plans to open an additional manufacturing location, or offer additional services requiring tech skills not currently in place, then HR will come along and provide estimates as to how many FTEs, what roles, and what kind of skills will be needed. HRP helps with the budgeting for the next fiscal year, and once approved can get to work filling those roles. In a fast-moving environment, HRP may need to be updated with every major change. For example, let's say your organization is project based and you just won a huge contract. Right away your HRP team will need to work with project managers to estimate staffing needs, whether temp or permanent, contract or hire.”

Human Resource Planning Round-Up: Best Practices and Expert Insights

Our experts share their thoughts on some additional issues to keep in mind as you develop your own plan:

• The Importance of Policy Planning: Company policy supports your human resources plan. Policies such as employment classification, benefits, compensation, performance, and improvement are designed to target not only the selection, training, and support of team members, but also to provide guidelines for conduct in and out of the work environment and many other aspects of employment.
• Social Media as Friend and Foe: Social media sites like LinkedIn and Twitter can be powerful recruiting platforms and a friendly, fun way to communicate with team members. However, they can also potentially be an issue when disgruntled employees or competitors get into negative commentary. It’s important to be alert to your company’s social media profile and to take corrective action when the buzz may not be favorable to your goals. 

Sharon Margules, MA, CPC, ACC and CEO of Margules Leadership Consulting says, “The ability of a business to achieve its strategy is largely based on the talent it has to execute. While market and competitive forces can significantly impact the capacity of an organization’s pursuit of its strategy, the explicit capabilities of those doing the work will determine if the result is a success or failure.”

• The “New” Human Resources Professional: “Ultimately, a good HR person is a good business person,” says Adler. “The best HR professionals are system and integration project managers who understand deadlines and highly complex projects. A great candidate has business experience in something other than HR. In my consulting work, I’ve told CEOs that they should look for HR managers with a business background. I think it’s an important consideration, particularly for large firms.”
• More About Markov Predictive Analysis Modeling: One of the most difficult analyses to execute and potentially one of the most valuable tools in forecasting is the Markov model. It’s not a quick fix, but for most mid-to-large companies, it’s worth the time investment to learn how to execute it. For a detailed explanation, read A Markov Model for Human Resources Supply Forecast Dividing the HR System into Subgroups . 
• Leadership and Succession Planning: “HR plays a critical role in enabling leadership, in mature or scaling organizations, to anticipate and understand the talent capabilities that will be necessary to meet their strategic objectives,” says Margules. She lists four items: 
• HR should have a seat at the table when the strategy is being conceived to align on what capabilities are needed, and by when, to realize the strategy.
• HR needs to influence progressive and aggressive budgeting for resource acquisition, training, coaching, and development every year.
• HR must institutionalize effective succession and talent planning practices at all levels, and build an adaptive organization that can flex its structure to optimize performance.
• HR must use far-reaching ideas to retain its key talent and sustain a highly-engaged workforce in a diverse and driven culture. 
• Plan Implementation: “HR plans should align with business strategy and annual plans and should be adaptive to a volatile and uncertain business climate,” says Margules. “While many organizations take a reactive, in-service approach to HR planning and determine their priorities and plans largely in support of annual plans, the most effective organizations are proactive: They anticipate needs and build plans that achieve short term and long term objectives. They adopt progressive practices such as allocating a portion of the staffing budget and resources to recruit and hire key talent for future-focused work. And, they have enough foresight to invest in high potential programs at multiple levels, entry-level accelerated development programs and coaching to build pools of qualified talent for future growth plans.”
• Buy HR Planning Tools or Do It Yourself? “The problem with traditional human resource planning is that it often hasn't supported the scalability of a growing business,” says Burr. “This is precisely why we have to consider new models for talent management, organizational design, and learning and development to ensure that our human resource planning processes can be flexible to meet the scaling needs of the business. This is part of the reason why you have seen an explosion of people analytics tools in the HR marketplace. It is to fill the demand for flexible and scalable models that provide the needed tools for business leaders to plan their people needs as the business grows.”  Adler concurs and says: “I think a spreadsheet can often do a better job. Workforce planning has been around a long time. I think the main point is to be proactive and less reactive in the planning process.”

Five Challenges to Human Resources Planning and Implementation

“People are naturally change- and-risk-averse. Planning and proper support by HR and the people they hire need to happen 100 percent of the time,” says Adler. More often than not, there are some challenges involved in human resources planning and implementation. Here are the five main hurdles:

• Forecasting Is an Imperfect Art: Human resource planning relies on forecasting and supply, which can never be a 100 percent accurate process. 
• Resistant Workforce: Employees may feel that their workload will increase, so they resist the process, or they may be uncomfortable altering familiar patterns in their work life and tasks.
• Ambiguity and Rapid Change: Uncertainties such as labor absenteeism, employee turnover, seasonal employment, technological changes and market fluctuations all affect planning.
• Inefficient Information Systems: Human resource information systems need to be reliable, comprehensive, and up to date. It makes it difficult to plan without good data about current employees.
• Cost and Time Factors: With all of the work hours involved in completing and repeating the seven steps, human resource planning is a time consuming and expensive process, so companies sometimes avoid it altogether, despite the benefits. 

A Look to the Future of Human Resources Planning

Here are some of the themes experts think will influence human resources professionals, their companies, and the people they hire in the near future:

• Going Global: Globalization, the export of U.S. jobs and the import of non-U.S. employees are already underway, as is offshoring (basing services or processes in different countries). “Globally planning can be complex for any HR professional,” says Burr. “It can be a stressful situation for offshoring and outsourcing of jobs within a firm. HR planning should involve a detailed assessment of the new location globally, the workforce demographics, industry competitors, laws and regulations and the potential impact on U.S. jobs. How do we communicate? How do we train? This will all vary by organization, but a strategic HR plan that communicates the information can lessen the impact. With a sound and detailed HR plan, recruiting, retaining and growing talent within the organization will be much easier.”   “Expect more offshore jobs, outsourcing and contract hiring because frankly they’re cheaper, and in many disciplines like finance, IT, marketing, can do the same work for less,” says Handrick. “Other than providing training for supervisors to manage off-site work teams, there's really no difference for HRP except where the line item goes on the plan. For instance, if you know you'll need 12 FTEs next year, and can get four of them offshore, that line item goes to 'expenses' rather than to 'salary' for the remaining eight.”
• More Technology: Social media will likely be in higher use to reach potential workers, particularly millennials who use Twitter, LinkedIn, and Facebook in their job hunts. Telecommuting and the use of social collaboration tools and video conferencing apps will keep people working and in touch with company culture. Emerging platforms will further streamline basic human resources functions to make onboarding and professional development more cost-effective and accessible from anywhere in the world for a virtual workforce.
• Big Data: Metrics and in-depth analysis of processes and people will become increasingly important in human resources as they are in other functional areas. Data- driven decision making is the future, as are metrics to show ROI in people and technology.  
• Security Issues: All this new technology brings up security concerns for employers and employee. Data breaches are a fact of life, and the threat to personal data security, company security, and supply chain risks will likely continue. 
• Health Care Costs: Costs are likely to continue increasing, since they have been rising steadily in the last several decades. New legislation will perhaps slow the costs of health care. In the meantime, strategies to lower employee healthcare costs will likely take the form of initiatives to improve employee health, and taking advantage of health reimbursement accounts (HRAs) that are consumer-driven or health savings accounts (HSAs).

Improve Human Resources Planning with Smartsheet

Empower your people to go above and beyond with a flexible platform designed to match the needs of your team — and adapt as those needs change. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. 

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time.  Try Smartsheet for free, today.

Discover why over 90% of Fortune 100 companies trust Smartsheet to get work done.

• By Job Titles
• By College Majors
• By Companies
• By Location
• Job Search Advice

HR Business Plan: What Is It And What Are Its Steps?

Every company that has an HR department needs an HR business plan. Without it, you will have inconsistencies when you deal with your employees.

Human resources manage the relationship between your company and its employees. Due to this, it is only natural for human resources to have their own plan of approach to their tasks.

Key Takeaways:

An HR business plan is the strategic approach of the human resources department.

The HR business plan should clarify responsibilities, organize its processes, and create performance standards in which to gauge its success.

First assess the current HR situation, then establish goals and strategies to enact those goals for the HR department.

Make sure your HR strategies comply with legal requirements.

What Is A HR Business Plan?

An HR business plan is a strategic approach your human resource department will follow to accomplish its goals.

Like all business plans, an HR business plan needs to define its objectives, organize systems of measured success, and incorporate a flexible framework. A robust plan can adapt to new scenarios and still focus on its long-term aims.

Though this will vary by company, in general, every HR business plan will want to:

Clarify roles and responsibilities. Focus on the roles and responsibilities of the department and its members. You want to understand the job descriptions of each member of the human resource department. Then decide what the overall purpose of the department is and connect it back to each member. Be aware of any conflicting or contradictory agendas and seek to streamline.

Design and organize processes. Human resources helps hire, train, onboard, and terminate staff. There should be well-detailed plans for each process that keeps the human resources department prepared for any scenario.

Address compensation and benefits. Human resources manages the implementation of benefits and compensation. Therefore, the department’s plan must discuss how this will be handled.

Comply with legal requirements. The human resource department needs to be well-versed in the legal requirements and protections of the employees. The plan should provide a clear compliance with the law.

Create performance standards. A business plan is useless unless it can be evaluated against measures of success. It helps to provide metrics with results to be more objective in analysis.

Tie in to overall business plan. The HR business plan needs to complement the overarching business plan of the company. Avoid any policies or procedures that conflict with the overall business plan.

A human resource business plan will develop these points into a coherent strategy.

Steps To Develop A HR Business Plan

Assess current human resource situation. Before a plan is made, the human resources department and the company executives need to know what they have already. Your company should evaluate the roles and responsibilities of its human resource staff. You will want to see if anything is missing or if there is anything that is expendable.

Establish goals for human resource department. Now that you know what you’re working with, it is time now to think about what you want the human resource department to accomplish. Use the roles and responsibilities you just clarified to arrange practical benchmarks you want the department to make. Make sure goals do not interfere with one another but build toward an overall objective.

Create strategies to enact goals. Once you have your goals in place, it is time to build strategies to accomplish those goals. These strategies should work in tandem, so make sure each one has a logical progression. Like the goals, you do not want your strategies to interfere with one another but instead build towards an overall objective.

Evaluate business plan. Once you enact the plan, you need to make sure you accomplish your goals. Have a feedback system put in place where you can measure the success and failures of your plan. Come up with contingency plans in case your initial plans need to be re-evaluated.

Why Have A Human Resource Business Plan

An HR business plan is needed to establish long-term success with your employees.

Your plan gives focuses on the roles and responsibilities of the department. Human resources play a critical role in the hiring, training, and retention of staff. A business plan will clarify these procedures.

A HR business plan also provides consistency in the implementation of benefits and managing the welfare of the employees.

The human resource business plan empowers the department to perform at its best. In turn, it will help employees be equipped and compensated to perform at their best.

Without a HR business plan, your company is at risk conflicted and contradictory procedures that impede growth and success.

• Guide to Customer Retention
• Management Abbreviations
• Innovation in the Workplace
• Zappos Hiring Case Study
• Why a Clean Workspace Is Good for Business
• Tips for HR Magement Success
• How to Achieve Better Results With Your Team
• Working With a New Client
• What Is Market Mapping
• Managing Unprofessional Online Behavior
• Morale-Boosting Activities
• Understanding Your Team
• Signs of a Bad Hire
• How to Spot Leadership Potential
• Quality Management Implementation
• Goal Setting Tips for Business Owners
• How To Create An Effective HR Business Plan
• How To Avoid Nepotism
• Safeguarding Procedures For HR Managers
• How To Create A Productive Workplace
• The Power Of Strategic Partnerships
• Advice From Successful Business Leaders
• Why You Should Network
• How To Manage Up
• Corporate Retreat Ideas
• What Is An Employee ID?
• What Is Employee Self-Service?
• The 4 Ps Of The Marketing Mix
• How To Be Flexible At Work
• What Is Greenwashing?
• What Does A Chamber Of Commerce Do For Businesses
• How To Write A Sales Introduction Email
• A Guide To The Critical Path Method
• What Is A Change Agent?
• How To Build Your Employer Brand
• How To Have Effective Meetings

Conor McMahon is a writer for Zippia, with previous experience in the nonprofit, customer service, and technical support industries. He has a degree in Music Industry from Northeastern University and in his free time he plays guitar with his friends. Conor enjoys creative writing between his work doing professional content creation and technical documentation.

Find Your Next Hire Out Of Over 5 Million Candidates

Get connected with quality candidates whose resumes on Zippia best fit your job description.

Related posts

10 Ways to Help Your Team Achieve Better Results

10 Fun-filled Activities to Help Boost Team Morale

9 Ways to Motivate Your Remote Team [Infographic]

5 Reasons Why a Clean Workplace is Good for Business

• Zippia For Employers >
• Hiring Hub >
• Life At Work >
• Become A Better Manager >
• 5 Steps To Creating An Effective Hr Business Plan

Download : Free HR business plan template

Every success story starts with a plan. Using this template, you can help flesh out a business plan for your HR function with: 

Best practices for HR business partnerships 

A helpful template to realise your people team’s goals

Tangible ways to action and activate an HR strategy

Download for free here

4 steps to strategic human resource planning

Reading time: about 6 min

4 steps to strategic human resources planning

• Assess current HR capacity
• Forecast HR requirements
• Develop talent strategies
• Review and evaluate

It’s easy to understand the importance of the human resource management planning process—the process by which organizations determine how to properly staff to meet business needs and customer demands. But despite its obvious importance, many organizations do not have a strategic human resource planning process in place, with many HR professionals reporting their departments need to improve strategic alignment.

If you’ve considered developing an HR planning process, you’re in the right place. This article will explain what human resource planning entails and how to document your strategic plan. With this knowledge under your belt, you’ll be filling positions and growing as a company in no time.

Introduction to strategic human resource planning

In order to improve the strategic alignment of staff and other resources, it’s essential to understand how to create a strategic HR planning process. At its most basic level, strategic human resource planning ensures adequate staffing to meet your organization’s operational goals, matching the right people with the right skills at the right time.

It’s important to ask where your organization stands currently and where it is going for your plan to remain flexible. Each company’s plan will look slightly different depending on its current and future needs, but there is a basic structure that you can follow to ensure you’re on the right track.

The strategic human resource planning process begins with an assessment of your current staff, evaluating whether it fits the organization’s needs. After that, you can move on to forecasting future staffing needs based on business goals. From there, you’ll need to align your organization’s strategy with employment planning and implement a plan to not only to hire new employees but also to retain and properly train the new hires—and your current employees—based on business changes.

Read on to understand human resource planning in more detail.

1. Assess current HR capacity

The first step in the human resource planning process is to assess your current staff. Before making any moves to hire new employees for your organization, 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. Use the template below to visualize that data.

2. Forecast HR requirements

Once you have a full inventory of the resources you already have at your disposal, it’s time to begin forecasting future needs. Will your company need to grow its human resources in number? Will you need to stick to your current staff but improve their productivity through efficiency or new skills training? Are there potential employees available in the marketplace?

It is important to assess both your company’s demand for qualified employees and the supply of those employees either within the organization or outside of it. You’ll need to carefully manage that supply and demand.

Demand forecasting

Demand forecasting is the detailed process of determining future human resources needs in terms of quantity—the number of employees needed—and quality—the caliber of talent required to meet the company's current and future needs.

Supply forecasting

Supply forecasting determines the current resources available to meet the demands. With your previous skills inventory, you’ll know which employees in your organization are available to meet your current demand. You’ll also want to look outside of the organization for potential hires that can meet the needs not fulfilled by employees already present in the organization.

Need advice on calculating your staffing needs and developing a staffing plan?

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.

3. Develop talent strategies

Recruitment

In the recruitment phase of the talent development process , you begin the search for applicants that match the skills your company needs. This phase can involve posting on job websites, searching social networks like LinkedIn for qualified potential employees, and encouraging current employees to recommend people they know who might be a good fit.

Once you have connected with a pool of qualified applicants, conduct interviews and skills evaluations to determine the best fit for your organization. If you have properly forecasted supply and demand, you should have no trouble finding the right people for the right roles.

Decide the final candidates for the open positions and extend offers.

Bring clarity to the hiring process to find the best candidates for your company.

Training and development

After hiring your new employees, it's time to bring them on board. Organize training to get them up to speed on your company’s procedures. Encourage them to continue to develop their skills to fit your company’s needs as they change. Find more ideas on how to develop your own employee onboarding process , and then get started with this onboarding timeline template. 

Employee remuneration and benefits administration

Keep your current employees and new hires happy by offering competitive salary and benefit packages and by properly rewarding employees who go above and beyond. Retaining good employees will save your company a lot of time and money in the long run.

Performance management

Institute regular performance reviews for all employees. Identify successes and areas of improvement. Keep employees performing well with incentives for good performance.

Employee relations

A strong company culture is integral in attracting top talent. Beyond that, make sure your company is maintaining a safe work environment for all, focusing on employee health, safety, and quality of work life.

4. Review and evaluate

Once your human resource process plan has been in place for a set amount of time, you can evaluate whether the plan has helped the company to achieve its goals in factors like production, profit, employee retention, and employee satisfaction. If everything is running smoothly, continue with the plan, but if there are roadblocks along the way, you can always change up different aspects to better suit your company’s needs.

Why document your strategic HR plan

Now that you know the steps to strategic human resource planning, it's time to adapt those steps to your own organization and determine how to execute.

There are a number of reasons to document your strategic human resources plan, particularly in a visual format like a flowchart. Through documentation, you standardize the process, enabling repeated success. Documentation also allows for better evaluation, so you know what parts of your plan need work. In addition, a properly documented plan allows you to better communicate the plan throughout the organization, including how everyone, from the top down, can contribute to make sure the plan works. 

Document every step of the process, from beginning to end, and find room for improvement in your human resources process along the way.

Start creating your own strategic human resource plan with this template.

About Lucidchart

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

Related articles

Hiring to avoid firing: improving the human resources life cycle.

Firing is the worst. Use these tips and free templates to visualize and improve your human resources lifecycle.

How to build a recruitment process

The success of your organization depends on the people you choose to build it. Learn how you can visualize your recruitment process and hire top talent.

Bring your bright ideas to life.

or continue with

By registering, you agree to our Terms of Service and you acknowledge that you have read and understand our Privacy Policy .

Your HR Strategic Plan: Why You Need One and How to Create It

Aug 26, 2023 by The HR Team

An effective HR strategic plan is a necessity for organizations that want to thrive in today’s competitive environment.

Over the years, human resources (HR) has emerged as a critical strategic function, going far beyond traditional administrative tasks. Today’s HR department is the source for learning and development, talent acquisition, employee experience, organizational development, ethical conduct, and much more. As such, aligning human resources goals with business objectives has become critical for long-term business success in a competitive and ever-changing landscape.

In this article, we’ll explore the reasons your company needs an HR strategic plan , along with seven steps for creating an effective one.

A comprehensive, well-constructed hr plan offers robust benefits like these:.

• Business goals get a boost A strategic human resources plan aligns your human capital management efforts with your overall business objectives. It ensures that HR initiatives contribute directly to organizational growth, profitability, and sustainability. By integrating HR strategies with business strategies, it creates a powerful synergy that propels your company forward.
• Improved talent acquisition and retention In a talent-driven market, attracting and retaining top-tier employees is a paramount concern. An HR strategic plan outlines how to attract, hire, onboard, and retain the right people for your organization. It includes strategies for employer branding, recruitment, training, and development that help you build a strong, engaged workforce.
• Greater agility and nimbleness The business world is characterized by constant change, such as technological advancements, market fluctuations, and evolving customer preferences. An HR strategic plan equips your organization to adapt to these changes by fostering a culture of flexibility and innovation. It outlines how HR professionals will facilitate skill development, retraining, and reskilling efforts to keep your workforce informed and agile.
• A more engaged, productive workforce When team members are more involved and engaged with their work, their commitment, morale, and productivity are enhanced. An HR strategic plan includes initiatives that support employee engagement, such as performance management systems, feedback mechanisms, and wellness programs. These efforts contribute to a positive company culture and a more enjoyable work environment, which drives overall organizational success.
• Compliance and risk management are bolstered By integrating risk management and compliance considerations into HR strategies, businesses can proactively identify, mitigate, and address potential risks and ensure adherence to legal, ethical, and regulatory requirements. From contract management to data privacy and beyond, an HR strategic plan outlines how your company will adhere to labor laws and industry standards, reducing legal liabilities and reputational risks.

Creating Your HR Strategic Plan: Seven Steps for Success

• Conduct a comprehensive assessment Begin by evaluating your company’s current HR practices, strengths, weaknesses, opportunities, and threats. Gather data on employee demographics, performance metrics, turnover rates, and employee satisfaction. This assessment serves as the foundation for your strategic plan.  
• Define the objectives Based on your assessment, set clear and measurable HR objectives that align with your company’s goals. Whether it’s increasing employee retention rates, improving leadership development, or enhancing diversity and inclusion, ensure that your objectives are specific, achievable, and relevant.
• Develop strategies and initiatives For each objective, outline the strategies and initiatives you will undertake to achieve them. For example, if your goal is to enhance employee training and development, your initiatives might include creating a comprehensive training curriculum, investing in e-learning platforms, and implementing mentorship programs.
• Allocate resources Determine the budget, staffing, and technology requirements for each initiative. Adequate resource allocation is essential to ensure the successful execution of your HR strategic plan.
• Establish Key Performance Indicators (KPIs) Define KPIs that will help you measure the effectiveness of your initiatives. These metrics might include employee turnover rates, employee satisfaction scores, or how long it takes to fill open positions, for example.
• Implement and monitor Execute the HR initiatives according to your plan and closely monitor their progress. Regularly review your KPIs, gather feedback from employees and stakeholders, and make necessary adjustments to keep your plan on track.
• Review and fine-tune regularly The business landscape is ever-changing, so your HR strategic plan should not remain static. Conduct regular reviews of your plan’s effectiveness and modify it as needed to align with new business priorities and industry trends.

Throughout the development and execution of your plan, open communication across the entire organization is a necessity. Transparent communication builds buy-in from employees and leaders, fostering a positive, collaborative approach to achieving HR and business objectives.

Think of your HR strategic plan as a compass that guides your organization toward a prosperous future. By following the steps above, you can create an impactful plan that sets the stage for sustained growth and success.

The HR Team partners with organizations to develop smart HR strategic plans that drive positive outcomes. Contact us today to learn how we can help you craft a comprehensive strategic plan that responds to your unique needs.

  About The HR Team: Founded in 1996, The HR Team is a Maryland-based human resources outsourcing firm committed to developing strategic, customized solutions that respond to the unique needs and cultures of organizations of all types and sizes. Available as a one-source alternative to an in-house HR department or on an à la carte project basis, the company’s flexible service models address the full spectrum of HR needs that many organizations struggle to address. The HR Team helps clients achieve their highest level of success by providing value-driven human resources services that leave them time to focus on what they do best: directing business growth and profitability. H eadquartered in Columbia, Maryland, the firm serves all of Maryland, Washington, DC, and Virginia. To learn more about The HR Team, call 410.381.9700 or visit https://www.thehrteam.com/ .

Our Services

• HR Outsourcing
• Performance Management
• Manager Coaching and Guidance
• Market Compensation
• Employee Surveys

Careers with our Clients

Searching for a new job? Our clients are always on the lookout for the talented, passionate people to join their teams. Find the position that’s right for you by browsing all available opportunities below, or narrow down your search by key using the key word filter. Click on the job title for a detailed description of the position. Looking to join The HR Team? If we have an opening, it will be posted here.

Browse Careers

The HR Team, Inc.

How can we help you?

• Name First Last
• Email Address
• Phone Number
• Organization
• Company Website URL
• Tell us a little bit about your situation.
• How did you hear about/find us?
• Please check the box below.
• Name This field is for validation purposes and should be left unchanged.

Virtual Teams, Real Results: Why Workplace Collaboration Matters More Than Ever

Eileen's Lesson: Before you panic, consider how you can pivot.

HR Outsourcing for Nonprofits: How to Boost Your Efficiency and Impact

We are proud to be affiliated with the following organizations

At The HR Team, we help small to mid sized companies better manage their human resources.

The HR Team, Inc. 410-381-9700 [email protected]

facebook twitter linkedin youtube

Subscribe to Our Monthly eNewsletter

• Comments This field is for validation purposes and should be left unchanged.

Are You a Human Resources Manager? We’re Hiring! Apply Now

Develop a Successful Human Resources Department Business Plan

Plan to Chart Your Business Course for Success and Contribution

• Management Careers
• Job Search Resources
• Hiring Best Practices
• Employment Law
• Employee Motivation
• Employee Management
• Management & Leadership
• Employee Benefits

Susan Heathfield is an HR and management consultant with an MS degree. She has decades of experience writing about human resources.

If you’re a department leader, your boss will likely one day ask this question: “What is your business plan for your department?” As the leader of the Human Resources function, you can use these steps to answer that question.

A frequently asked question at this website, it’s a difficult question to answer in a generic fashion because the needs of every company for the contribution of the HR department can differ widely. You can, however, use these steps as a guide as you develop your own HR business plan.

Your Human Resources department business plan depends on your needs analysis of your own workplace. Your Human Resources department business plan also depends on learning about and benchmarking industry standards outside of your organization.

But, the fundamental question you need to answer, to reply to your boss’s question, is, “What does your workplace need from the HR function?” Here’s how you can find the answer.

Steps to Develop a Human Resources Department Business Plan

• Start your Human Resources department business plan by clarifying exactly what your boss needs and wants from you and in how much detail. You don’t want to spend hours and hours developing information or a detailed plan that the boss doesn’t need or want. That said, for your own clear purpose and direction, your own strategic plan for your department, this approach will yield great value.
• Read through the detailed job descriptions that have been developed for the HR Director/VP , HR Generalist , and HR Assistant . Are there functions listed in these job descriptions that you are not performing that you could perform that would add value to your organization? Start a function list. You can also use a commercially developed Human Resources department audit book/program or an occasional free Human Resources department audit plan list.
• Take a look at this list, plus add to the list, the functions that your Human Resources department is already performing and functions that you know you want to add—or subtract. Minute detail is not required until you are ready to put together your Human Resources department business plan when you complete these steps.
• Meet with your fellow executives to obtain an assessment of their current satisfaction with your services, additional services they’d like you to add, and their ideas about how HR can best support your organization’s mission , vision , and goals. Supply the questions to your key colleagues in advance of your meeting. Inform them that you have distributed the questions in advance so that they can solicit feedback from their staff, too. If you have effectively gathered the above internal and external information, you may be able to present the choices in a rating and ranking format. This is the key step within your organization for assessing what the line management and the employees want from the HR function. Of course, there are administrative and counseling functions that they might never consider asking you to provide that you will continue to provide as part of a professional HR function. The purpose of asking is to find the offerings that your customers think they need most.
• You are developing a great deal of internal information about your company’s HR needs. You might also look at recent journals from professional associations such as the Society for Human Resource Management (SHRM). Talk with colleagues in any local associations you attend. Take a look at literature available such as HR Magazine . The articles from this section of TheBalance.com are particularly useful for planning the priorities and scope of the HR department business plan.
• Once you have gathered all of this information, or even, just enough—your executives’ priorities may give you extremely clear direction, for example—you can make a plan. You can see what you are missing in your HR department, what you might expand, what you need to focus on strategically to build your department’s contribution, and what you may currently offer that is not needed.
• From these identified missions, prioritize and make a plan, based on resources and your preferred method of presentation or accomplishment, of what you can accomplish this year and next. Some solutions may be HRIS-based needs ; others may have to do with HR office offerings; others may require a strategic change in direction or the addition of a major function. You won’t know until you study and ask.

Now, at last, you can answer your boss’s question: What is your business plan for your HR department?

• How to Do Human Resources Strategic Planning
• Create Value With Human Resources Measures
• Human Resource Management Basics
• What Is Personnel Management?
• Human Resources Management Fundamentals in Hiring Employees
• How to Develop a Job Description
• Training and Preparing for a Human Resources Job
• What Is Human Resource Development?
• Build a Strategic Framework Through Strategic Planning
• The 3 New Roles of the Human Resources Professional
• 10 Things You Should Never Tell HR
• Why Human Resources Management Is So Important
• Human Resources Job Titles
• What Does a Human Resources (HR) Recruiter Do?
• Performance Development Planning (PDP)
• Most Popular Topics in the Human Resources Content

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Human Resources Consulting Business Plan

Start your own human resources consulting business plan

Human Capital Maximizers

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Human Capital Maximizers (HCM) is a human resource consulting company located in Portland, Oregon.  HCM has expertise in a wide range of HR areas and is targeting the emerging company market.  HCM will offer this market the ability to compensate client’s employees with stock options from their company.  This will be especially appealing to many start-up companies that find capital scarce. 

Major Adversity, the founder and owner will be leveraging his past and current personal/professional relationships to generate business for Human Capital Maximizers.  Major will be the sole employee until month six when he will be hiring a human resource specialist/manager to help out with the consulting.  Human Capital Maximizers will show increasing profitability over the next three years.

1.1 Keys to Success

The keys to success are to provide a needed service while providing a flexible means of compensation.

1.2 Mission

Human Capital Maximizers’ mission is to provide human resource consulting for emerging companies.  We exist to attract and maintain customers.  When we adhere to this maxim, everything else will fall into place.  Our services will exceed the expectations of our customers.

1.3 Objectives

The objectives for the first three years of operation include:

• To create a service-based company whose primary goal is to exceed customer’s expectations.
• To increase our number of clients served by 20% per year through superior performance and word-of-mouth referrals.
• To develop a sustainable start-up consultancy firm that can survive off its own cash flow and has significant equity holdings in emerging companies.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Human Capital Maximizers is a HR consultancy firm serving the Portland area market. HCM will be set up as an Oregon Corporation owned by Major Adversity and will focus on emerging companies.

2.1 Company Ownership

Human Capital Maximizers is a privately held Oregon corporation founded and owned by Major Adversity.

2.2 Start-up Summary

Human Capital Maximizers will incur the following start-up expenses:

• Two desks, two chairs, and two lockable file cabinets.
• Two computer systems including a CD-RW, printer and a third computer to serve as a server.
• DSL router and DSL connections.
• Two telephones, fax machine, and copier.

Please note that the following items which are considered assets to be used for more than a year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line depreciation method.

Human Capital Maximizers provides human resource consulting to emerging companies in the Portland/Vancouver market.   Human Capital Maximizers will charge a below market rate and take stock options in the company.  Human Capital Maximizers will  provide consulting for the following service areas:

• Human resource management.
• Organizational management.
• Professional development.
• Employee relations.
• Labor relations.
• Benefits and compensation.
• HR policy and procedure.
• Executive search.
• Sexual harassment.
• Position classification.
• Personnel management systems.
• Performance evaluations.

The pricing structure will either be an hourly rate or a per project fee.  These options will be settled on in negotiation with the client.  In general, Human Capital Maximizers is willing to be as flexible as possible.

Market Analysis Summary how to do a market analysis for your business plan.">

Emerging companies will be the target market for several reasons:

• They are in need of HR services as they are growing rapidly.
• They often do not have a large enough in-house solution as they are increasing in size.
• Capital is a scarce resource for emerging companies so the ability to accept stock options in replace of cash is appealing.

The emerging company market can be further broken down into two categories, technology and non-technology.  The significance of the breakdown is not that significant because many of the networking activities are occurring in settings that do not differentiate between technology and non-technology.

4.1 Market Segmentation

Human Capital Maximizers market can be segmented into two different groups, emerging high-tech companies and emerging non-high tech companies.  The emerging high-tech companies are going to be the larger of the two segments.  Even with the Internet bubble bursting within the last year, there are still many different emerging high-tech companies proliferating.  This is evidenced by the Business Journal of Portland which in their annual list of fastest growing companies for this year, 18 of the top 25 were technology companies.

There are also non-technology companies that are emerging in the Portland area and Human Capital Maximizers will be able to serve them as well.

4.2 Target Market Segment Strategy

Human Capital Maximizers’ two markets will be primarily targeted through networking activities.  Some networking will be conducted through the Oregon Entrepreneur Association, an association that supports entrepreneurial ventures in the local area.   This organization has monthly meetings that are in round-table format, allowing members to socialize.

Human Capital Maximizers will also be networking from personal/professional contacts that Major has developed professionally in the last five years in the HR/start-up industry.  HCM will also be relying on word of mouth to grow its customer base.

Strategy and Implementation Summary

Human Capital Maximizers will use their competitive edge of compensation flexibility to attract emerging companies.  This competitive advantage is especially valuable to emerging companies who are typically struggling to find enough capital to grow their business.  Accepting stock options as compensation is useful because equity is one thing these companies have lots of (that is of course if they haven’t given it all away to the Venture Capitalists).

5.1 Milestones

Human Capital Maximizers will have several milestones early on:

• Business plan completion.  This will be done as a roadmap for the organization.  This will be an indispensable tool for the ongoing performance and improvement of the company.
• Set up office.
• HCM’s first five customers.
• Profitability.

5.2 Sales Strategy

Major will also be able to speak about Human Capital Maximizers ability to accept options in lieu of cash.  This will be appealing to companies, particularly in the current capital market which is quite scarce.  Since capital is more difficult to come by now than in the last few years, emerging companies will be excited about this option.

5.2.1 Sales Forecast

The first month will be used to set up the office.  Additionally, during the first month Major will be working hard on developing contracts. The second month will see some activity, but it will not be until month six when business will be picking up at a higher rate.  Sales will continue to grow through year three.

5.3 Competitive Edge

Human Capital Maximizers competitive edge is their flexibility for compensation.  Most or all other companies require compensation to be in the form of cash, for them cash is king.  Human Capital Maximizers is able to take stock options in lieu of some cash.  While Human Capital Maximizers needs some cash to float the business, it can take up to 75% of its fees in equity.  Human Capital Maximizers is able to do this because they have secured an office space that is low in cost, helping them reduce their overhead.  In addition, Major’s wife contributes a significant portion of money to the household so Major is not in need of a lot of monthly compensation.  This allows him to accept options as payment in hopes of an upside to come several years for now. (Please note the the HR industry, unlike law firms and accounting firms do not run into conflict of interests situations regarding receiving equity as compensation.)

Web Plan Summary

The website will be used as a resource that prospective companies can view to gain more information about the company.  In essence it is Human Capital Maximizers’ brochure.  On the site there will be information about the management of the company and corresponding bios indicating all of their experience.  Also on the website will be a list of present and past clients and information regarding Human Capital Maximizers’ fee structure and willingness to accept stakes of option.

6.1 Website Marketing Strategy

The marketing of the website will consist of submitting it to the popular search engines.  The website will be used more as a information tool that prospective companies can be sent to for more information about Human Capital Maximizers as opposed to marketing the website in order for the website to develop new leads.

6.2 Development Requirements

The development requirements will entail hiring an individual (preferably a student for cost saving purposes) to develop and produce the site.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Major Adversity, the founder and owner received his undergraduate degree in marketing from Reed College.  After completing college Major recognized that he would eventually need to go to graduate school but was not ready to yet. 

Major worked in a large bicycle store for four years after college.  Major started out as a mechanic but quickly moved up to manager where he was responsible for much of the operation.  Some of the new responsibilities that Major enjoyed was the interviewing, selection & hiring, compensation, and employee relations.  After fours years in the bike shop Major was looking for a new challenge so he entered the University of Portland to pursue his MBA. 

Major received his MBA within two years and went to work for Nike out of school in their HR department.  After a year and half Major left Nike to work for a HR consultancy boutique that worked primarily with technology companies, many of them start ups.  Major enjoyed this thoroughly because of the dynamic environment that his clients worked in.  Major stayed with this firm for a total of four years.  

Toward the end of Major’s four years he got married and his wife, as a professional, was contributing large amounts of salary to the household.  This led Major to consider opening his own HR consultancy because he would be able to undertake some risk since the household was supported to a large degree by his wife.  Additionally, Major was could consider taking equity as compensation because a monthly salary was not a necessity.

7.1 Personnel Plan

Major will work full time for Human Capital Maximizers.  By month six Major will have developed more work than he will be able to manage himself and he will hire an additional HR consultant to help him out.  The employee will receive a straight salary and will have no future equity options in the client’s companies.  This employee will be given HR projects and will do the research and sometimes present the findings to the client, other times will allow Major to present to the client.

Financial Plan investor-ready personnel plan .">

The following sections will outline important financial information. Please note that the stock options granted in lieu of compensation are not entered into the financial plan as they are not yet of value.  Upon exercising the options there will be tax consequences (because one of the realizing events has occurred) as well as assets to be accounted for.

8.1 Important Assumptions

The following table details important financial assumptions.

8.2 Break-even Analysis

The Break-even Analysis is shown below.

8.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

8.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

8.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

8.6 Business Ratios

The following table outlines some of the more important ratios from the Management Consulting Resources industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 8742.

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

5 Steps To Developing A Strategic HR Plan

by Amy Letke | Apr 18, 2018 | Blog

Amy Newbanks Letke, SPHR, GPHR, is the Founder of Integrity HR, Inc. Amy provides workplace solutions to improve performance, reduce liability and increase profits. She is passionate about helping other entrepreneurs and business owners achieve success. Contact us for more insights - 502-753-0970 or [email protected]

You’ve heard it before, and you’ll hear it again – every business needs a strategic plan.

The most successful companies develop and implement an effective strategic plan to help them pursue their organizational goals. But, even the best strategic plan won’t be very effective if the human resources function isn’t in alignment with it.

A Strategic HR Plan is a tool to help businesses align their organizational goals with their HR capabilities , and every business should have one in place to support the growth outlined in their strategic plan.

If you haven’t developed a Strategic HR Plan for your business (or if you’re still not quite sure what it is!), don’t worry!

Below we share our 5 Steps To Developing A Strategic HR Plan to help you effectively support and achieve your organization’s strategic goals.

If you’re interested in learning more about developing a  Strategic HR Plan  or a Strategic Plan for your business, schedule an appointment with one of our HR professionals or give us a call at 877-753-0970 .

What is a Strategic HR Plan?

A Strategic HR Plan helps organizations to align human resources to corporate strategy. It is an essential planning document built upon the corporate mission, vision, values, and goals established in the strategic business plan.

It provides information on how the HR function will support the goals and strategies of the organization, while also ensuring that HR planning and practices are consistent.

The ideal Strategic HR Plan outlines how the gaps between present and future capabilities will be addressed, enabling businesses to effectively pursue their company goals.

Why develop a Strategic HR Plan?

In most organizations, managers have a responsibility to fulfill expectations in the areas of corporate governance, transparency of policies, accountability, and economic efficiency.

For your business to be successful in these areas, you need to have the right people, with the right skills, in the right place, at the right time to carry out the strategy.

A comprehensive Strategic HR Plan will ensure that you have the capacity to deliver on strategy and the ability to monitor progress towards your organization’s goals. It should also establish:

• HR practices that are consistent across the organization
• Training and skill development policies that are linked to strategy
• Succession planning processes that identify and minimize capability risks

How do you create a Strategic HR Plan?

The process for developing a Strategic HR Plan begins by identifying where your organization is now in the life-cycle of an enterprise: the start-up stage, the growth stage, the mature stage, or the decline stage.

Once you’ve decided where your company is today, formulate a clear picture of your company’s future along with ways to get there. Your Strategic HR Plan will be built upon the foundation of this strategic business plan.

Step 1: Identify Future HR Needs

Using your business’ strategic plan as a guide, identify the future HR needs of the organization. Ask questions like:

• What is the nature of our work?
• What type of culture will support productivity?
• What skills do we need to deliver results?
• Where are those skills and how are we tapping into them?
• How large is our organization?
• What systems and processes do we need?
• How are we making sure peoples’ skills match our needs?
• What risks are associated with this future?

Step 2: Consider Present HR Capabilities

Now consider your company’s present HR situation by asking questions like:

• With the future in mind, what is our current capability?
• How are we doing against benchmarks?
• What are our strengths and weaknesses?
• Are there legislative requirements we need to consider?
• What are we doing well now, that we need to do more of in the future?
• Where do the risks lie?
• What HR issues may prevent us from getting to the future?
• What current systems will support or hinder our progress?

Step 3: Identify Gaps Between Future Needs & Present Capability

Compare your future HR needs from step 1 with your present HR capabilities from step 2, and identify any significant gaps that appear.

Gaps can develop in a number of areas including policies and procedures, capability, and resource allocation. Start with these questions:

• Where do significant gaps appear between the present and future?
• How can these gaps be classified?

Step 4: Formulate Gap Strategies

Next, work to develop strategies that will address the gaps you identified in Step 3. These gap strategies may affect:

• Job/Work Design
• Selection/Staffing
• Performance Management
• Compensation/Rewards
• Training/Development
• Employee Relations
• Safety and Health
• Workforce Diversity

Not all gaps will be of the same strategic importance, so you will need to set priorities for addressing them.

For example, imagine you discovered a need to update your HR information system. Investing in a new system would provide you with employee progress data that you deemed essential for your future company goals.

The need for an upgraded HR information system should be prioritized as urgent because it’s necessary to succeed in your long-term strategic plan.

Questions you can ask to help you determine the priority of your needs include:

• What are the top priorities?
• Where can we experience rapid progress?
• How do these strategies work with our budgets?
• What is the degree of change needed?

Step 5:  Share & Monitor The Plan

Sharing the Strategic HR Plan with your senior leadership and those connected to the HR function of your organization is a crucial component of its success. The more your team understands and supports the plan, the more empowered they will be to help the company achieve its goals.

It’s also important to monitor the progress of the Strategic HR Plan you develop and to communicate successes or modifications to your team.

At the very least, you should review the plan on an annual basis to verify that the goals on which the plan was based are still accurate and to make adjustments as needed.

Developing Your Plan

Developing a comprehensive Strategic HR Plan is an essential investment in helping your company achieve its goals.

A Strategic HR Plan aligns your corporate mission with your business plan, ensuring you have the capacity to deliver on strategy as you pursue your organization’s goals.

Download Our FREE Resources

A list of our useful HR resources

Looking for Something?

Boost Your Business with Compensation Analysis

The Dos and Don’ts of Company Events Like Picnics from an HR Perspective

Transformative Team Leadership

Guide to Interim Professional Placement

Workforce Planning in the Modern Business Environment: Trends, Strategies, and Implementation

HR On-Call Services – Expert Advice When You Need It

Recruiting Practices to Attract and Retain the Right Employees

Using HR Operational Reviews to Improve Business Performance

The Essential Guide to Creating and Updating Your Employee Handbook

Master the Maze of Human Resource Compliance: Strategies for Navigating Employee Laws and Regulations

HR Consulting Business plan Template

Written by Dave Lavinsky

HR Consulting Business Plan

You’ve come to the right place to create your Human Resources Consulting business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their HR Consulting businesses.

Below is a template to help you create each section of your Human Resource business plan.

Executive Summary

Business overview.

HR Solutions is a startup human resources company located in Spokane, Washington. The company is founded by Tremaine Jackson, a former human resources manager in a large retail company. Tremaine led a team of twenty human resources employees in overseeing all aspects of human resources for the employer and developed a unique application that he has decided to introduce in his new company, HR Solutions.

HR Solutions will be the comprehensive leader in human resource training, management, negotiations, and solutions-finding company in the state of Washington. They will provide everything human resource personnel need to hire and effectively onboard new employees, as well as everything needed to maintain proper records, effectively cover communication and employee relations, and become proactive about potential conflicts.

Product Offering

The following are the services that HR Solutions will provide:

• Proprietary app that creates comprehensive HR management plans
• Training to maximize personnel potential
• Assistance in compliance with laws and regulations
• Curated HR solutions to solve employee issues
• Assistance in establishing productive work environments
• Onboarding from A to Z
• “Support Cadre” for HR management personnel
• Recruitment and talent acquisition training
• Organizational process-and-procedure manual

Customer Focus

HR Solutions will target small-to-large businesses in the Spokane, Washington region. HR Solutions will also target Washington state with select online training programs and sales of the proprietary HR app. HR Solutions will target C-suite executives in Spokane.

Management Team

HR Solutions will be owned and operated by Tremaine Jackson. He recruited his former administrative assistant, Sharlene Harris, to be his Administrative Manager in HR Solutions, where she will provide oversight of all personnel and HR responsibilities within the company itself. He also recruited Mason Wright, a former associate and HR manager, to be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers.

Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Sharlene Harris holds a bachelor’s degree in Business Administration from Spokane College. She has been Tremaine’s administrative assistant for ten years and her new role will be the Administrative Manager in HR Solutions. She will provide oversight of all personnel and HR responsibilities within the company itself.

Mason Wright, a former associate and HR manager, developed a large following of loyal clients. He will be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers. His clients have indicated that they will follow him into the startup business.

Success Factors

HR Solutions will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of HR Solutions

Financial Highlights

HR Solutions is seeking $200,000 in debt financing to launch HR Solutions. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for HR Solutions.

Company Overview

Who is hr solutions.

HR Solutions is a newly established, full-service human resource company in Spokane, Washington. HR Solutions will be the most reliable, cost-effective, and effective choice for HR managers and leaders in Spokane. Certain online programs and the proprietary app will also be the most effective and productive options for HR personnel throughout the state of Washington. HR Solutions will provide a comprehensive menu of training, recruitment, personnel, solution-finding services for any company to utilize. Their full-service approach includes a comprehensive set of training, management, and solution options.

  HR Solutions will be able to provide superior HR support and solutions to every business. The team of professionals are highly qualified and experienced in onboarding, training and creating solutions for every human resource quandary. HR Solutions removes all headaches and issues of the human resource personnel and ensures clients find the best answers to all their HR needs with the outstanding customer service found at HR Solutions.

HR Solutions History

HR Solutions is owned and operated by Tremaine Jackson. Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Since incorporation, HR Solutions has achieved the following milestones:

• Registered HR Solutions, LLC to transact business in the state of Washington.
• Has a contract in place for a 20,000 square foot office space within a downtown Spokane building.
• Reached out to numerous former clients and contacts to include those who will refer and recommend HR Solutions.
• Began recruiting a staff of ten HR managers and three office personnel to work at HR Solutions.

HR Solutions Services

The following will be the services HR Solutions will provide:

Industry Analysis

The human resources industry is expected to grow during the next five years to over $35 billion. The growth will be driven by an increased number of young employees who require extensive training and onboarding. The growth will be driven by an increased need for employees as the older demographic employee retires. The growth will be driven by an increase in the number of employees who are new to the U.S. and require assistance in onboarding and training. The growth will be driven by new technological advances that are not yet known. Costs will likely be reduced as new applications, such as the one created by HR Solutions, are created and introduced into the industry.

Customer Analysis

Demographic profile of target market.

Customer Segmentation

HR Solutions will primarily target the following customer profiles:

• Small-to-large businesses in the Spokane region
• Small-to-large businesses throughout Washington (select programs/app)
• C-suite executives in Spokane

Competitive Analysis

Direct and indirect competitors.

HR Solutions will face competition from other companies with similar business profiles. A description of each competitor company is below.

Human Resource RX

Human Resource RX was founded in 2005 by Reme and Janette Choux. As former human resource negotiators within a large firm, they developed distinctive programs that can help HR managers reduce conflicts in the workplace. In addition, the programs assist personnel in recuperating from workplace trauma and other difficulties or issues that arise in the office.

Human Resource RX, headquartered in Spokane, claims to be the “Best HR Prescription” for companies that require assistance in the form of management and oversight in trauma or difficulty. Human Resource RX also assists in compliance issues within the state of Washington, bringing expert advice into thorny issues that can potentially lead to litigation. The company has three offices throughout Washington, each with a staff of twelve “HR managers” who service local businesses. The company has maintained a good standing within the state of Washington, although there have been two separate issues of incorrect legal advice offered to clients. The matters were both brought by former clients to the court system and eventually resolved.

Premier Human Resource Associates

Premier Human Resource Associates is owned and operated by Tami Watson, an HR executive with over thirty years of experience. She is joined in the company by her daughter, Reyna Watson, a recent graduate of Spokane College, where she earned a bachelor’s degree in Communication. Premier Human Resource Associates is located in Spokane and offers an extensive onboarding and training program to support HR managers within local hospitals and medical clinics.

The bulk of services provided to HR managers includes various specific onboarding and training needs of nurses, LVNs, and other care providers. Attention is given in particular to the processes of sanitation and hygienic practices, along with the methods of communication used within these specific businesses. To date, the company has assisted in successfully onboarding over 5,000 nurses and other caregivers.

Transport HR Training

Transport HR Training was started in 1997 as a result of multiple difficult issues within the truck driving industry in Washington. In the decades since, Transport HR Training has established the full spectrum of services and products for HR associates in the long-haul and short-transport businesses. Specific practices and procedures relating to, in particular, medical issues of drivers, have been developed to smooth the HR process and align truck drivers with services they need. Transport HR Training offers a comprehensive package of services that includes negotiation in conflict, onboarding specifics, driver training, legal procedures and processes, and other truck driver-specific conditions.

Competitive Advantage

HR Solutions will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

HR Solutions will offer the unique value proposition to its clientele:

Promotions Strategy

The promotions strategy for HR Solutions is as follows:

Word of Mouth/Referrals

HR Solutions has built up an extensive list of clients and contacts over the years by providing exceptional service and expertise to their clients. Associates will follow them to their new company and help spread the word of HR Solutions.

Professional Associations and Networking

HR Solutions will extensively network throughout HR association and industry events. They will take an active role in leadership wherever invited to do so and will work to support the efforts of all associates or members.

Website/SEO Marketing

HR Solutions will fully utilize their website. The website will be well organized, informative, and list all the services that HR Solutions provides. The website will also list their contact information and list their available times to make reservations during the week. This will allow HR managers to speak with HR Solutions when most beneficial to the client. The website presence will engage SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Human Resources company” or “HR near me”, HR Solutions will be listed at the top of the search results.

The pricing of HR Solutions will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for HR Solutions. Operation Functions:

• Tremaine Jackson will be the Owner and President of the company. He will oversee all staff and manage client relations. He has spent the past year recruiting the following staff:

Milestones:

HR Solutions will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the HR Solutions
• 6/1/202X – Finalize contracts for new HR Solutions clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into HR Solutions office
• 7/1/202X – HR Solutions opens its office for business

Financial Plan

Key revenue & costs.

The revenue drivers for HR Solutions are the fees they will charge to clients for their services, online training and proprietary app.

The cost drivers will be the overhead costs required in order to staff HR Solutions. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

HR Solutions is seeking $200,000 in debt financing to launch its human resources company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Clients Per Month: 40
• Average Revenue per Month: $80,000
• Office Lease per Year: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Human Resource Business Plan FAQs

What is a human resource business plan.

A human resource business plan is a plan to start and/or grow your human resource business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Human Resource business plan using our Human Resource Business Plan Template here .

What are the Main Types of Human Resource Businesses? 

There are a number of different kinds of human resource businesses , some examples include: Human Capital Strategy, Compensation & Benefits, Talent Management, and Professional Development.

How Do You Get Funding for Your Human Resource Business Plan?

Human Resource businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Human Resource Business?

Starting a human resource business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Human Resource Business Plan - The first step in starting a business is to create a detailed human resource business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your human resource business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your human resource business is in compliance with local laws.

3. Register Your Human Resource Business - Once you have chosen a legal structure, the next step is to register your human resource business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your human resource business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Human Resource Equipment & Supplies - In order to start your human resource business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your human resource business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Get 75% off your first 3 months of Payroll!

Human Resource Planning: 17 Tips for Scaling Your Business

Ever thought about how important your team is to your business success? They’re like the engines driving your growth—the ones that keep things running smoothly. But hey, managing them can sometimes feel like trying to gather a bunch of playful kittens. From finding new teammates to getting them up to speed, it can be as tricky as herding those cute felines. And when your business is growing, these challenges can get even trickier. That’s where Human Resource Planning comes in.

Welcome to your roadmap for scaling your business while keeping your workforce happy and productive. This guide is like a treasure map with 17 golden strategies to master Human Resource Planning. These strategies are here to help you level up, showing you how to make your scaling journey smoother and your business even better.

Table of contents

What is Human Resource Planning (HRP)?

What is human resource planning used for, challenges of human resource planning.

• Why is Human Resource Planning important? 

Steps to Human Resource Planning

• Regularly assess your current workforce ability
• Cultivate talent to align with your business’s vision
• Streamline internal management succession planning
• Improve your hiring process now
• Establish and actual HR department
• Budget for human capital growth
• Get your best practices in line with your actions
• Perform a gap analysis
• Leverage analytics for informed decision-making
• Take a customer-centric view of HR
• Build a comprehensive employee handbook
• Evolve and adapt your employee communication
• Create mid-term employee goals
• Find a mentor
• Evaluate your leadership
• Know when you need to subtract

Human Resource Planning: FAQs

Imagine your business as a puzzle, and each piece is a member of your team. Human Resource Planning (HRP) is like being the master puzzle solver. It’s the process of figuring out who you need in your team and when you need them. Just like you plan ahead for a party or a trip, HRP helps you plan for the people you’ll need in your company as it grows. It’s all about being prepared so your business can run smoothly even when things change.

Key takeaways

• Plan your team’s growth: Plan out how your team will grow, write down the jobs you need, and set goals for when to add new members.
• Keep checking on your team: Keep an eye on your team’s skills, listen to their feedback, and see how you stack up against other businesses.
• Help your team shine: Find the talents in your team and give them training that matches your business goals.
• Make hiring easier: Improve your hiring process, make sure job descriptions are clear, and find people who fit your company culture.

Think of HRP as a magic map that guides your business through growth. It helps you make smart decisions about hiring, training, and managing your team. HRP is used to predict what skills and talents your business will need in the future. This way, you can find the right people for the right jobs at the right time. It also helps you avoid surprises by keeping an eye on your team’s strengths and areas that need improvement.

Like every adventure, HRP has its own challenges. One big challenge is predicting the future accurately. You’re not a fortune teller, but you need to guess how many people your business will need months or even years from now. Another challenge is keeping up with changes. As your business grows, things change fast, and you need to adjust your plans accordingly. And let’s not forget about finding the perfect people—hiring the right folks with the right skills can be a puzzle all its own.

Why is Human Resource Planning important?

Imagine building a house without a plan. It might fall apart or not turn out how you want. That’s why HRP is crucial. It helps you build your business with a solid foundation. It saves you from hiring too many or too few people, and it makes sure everyone knows what they’re supposed to do. HRP also boosts employee morale. When people know they’re part of a well-planned team, they feel valued and motivated to do their best.

• Know your goals: Understand your business goals and what kind of team you need to achieve them.
• Assess your current team: Figure out what skills your current team has and what they might need to learn.
• Predict the future: Guess how many people you’ll need in the future and what skills they’ll need.
• Find the gaps: Compare your future needs with your current team’s skills to see where you’re lacking.
• Recruit and train: Start hiring new people with the right skills and train your current team to fill the gaps.
• Keep watching: Continuously check how your plan is working and adjust it as your business grows.

17 tips for scaling your business

Whether it’s hiring, recruiting, training, orientating, onboarding, or providing benefits, planning your human resources is challenging. Now throw in a growing business and the need to scale for it.

That’s where this list comes in.

1. Plan for strategic staff growth

Maybe your business started out with just two on staff. Then four. Someday, hundreds.

Plan now. Think of the specific tasks and jobs that are going to be needed. Write down the jobs (and descriptions) you think you’ll need. Decide what order you’ll need those jobs to become a reality.

Sure, things might change and you’ll have to tweak those plans. Yes, early on you’ll have to cross-train your staff so fewer people can cover more of those jobs. But you should set up a plan that has benchmarks that indicate when a new position is needed.

Maybe that benchmark is a specific number of customers, or a certain sales volume. Maybe when customer complaints or support wait times reach a particular level you know you need to add staff. The point is to have a plan of what comes next in terms of human resources, and delineation as to when that plan kicks in.

2. Regularly assess your current workforce ability

Assessment is the foundation of pretty much anything else we’ll be talking about in this post.

It’s important to assess your workforce regularly, because it’s the only way you’ll know what you have, what you need, and what is changing both in your actual workforce and also what is changing in your industry that your workforce needs to adjust to.

Things to assess might include:

• Current employee skills and abilities. This includes technical, knowledge, interpersonal, and leadership.
• Trends spotted in employee reviews. Any trend is worth paying attention to, whether positive or negative, particularly responses regarding training and the ability to do the job before them.
• How your competitors compare. Find successful competitors, and consider how your workforce compares to theirs in terms of capability (skills, knowledge, training).

3. Cultivate talent to align with your business’s vision

Employees have inherent talents, but you need to encourage them to grow.

ConAgra studied the performance of both trained and untrained employees to determine what kind of effect training had on them. They learned that managers with training had half the employee turnover than those who did not receive any training. That discovery led to better training and the numbers to back up the cost of paying for training.

When it comes to scaling your business, you should know what direction you want to see it grow. Train and cultivate the talent of employees to take it in that direction. Looking for leaders? Provide leadership training. Looking for better customer service? Provide customer service training.

4. Streamline internal management succession planning

As your business grows, you’ll also see your need for management to grow.

Ideally, if you’ve been training your employees, you’ll have a good pool of potential managers to draw from in your own workforce so that succession and transition aren’t as jarring.

Your plan should include things like:

• Having a system that identifies employees with management and leadership abilities.
• Identifying personality and interpersonal strength and weaknesses in potential leaders.
• Knowing what your employees career goals are, and pinpointing those who wish to manage.
• A known system that alerts employees to the fact that they have the possibility of promotion and being a manager some day.
• Establishing training for management techniques, as well as decision-making techniques.
• Normalizing communication with employees regarding changes in management and other similar decisions that have an effect on them so they are used to being involved in such moments.

Not all of your management needs will come from within your growing business, but scaling means you’ll want to tap into those employees who have been with you from early on and who know your business better than a newcomer.

5. Improve your hiring process now

Getting your hiring process perfected when you are still on the smaller side is best.

This might include:

• Talking to current employees about the hiring process and what they liked or would change.
• Being serious about exit interviews and finding out if the hiring process was misleading and led to turnover.
• Improving the process of letting potential employees see what your work culture is really like before they sign on.
• Improving tools that assess whether an employee is a good fit for both the position and your business’s work culture.
• Improving how you advertise for job openings, both in the copy you use to describe them as well as where you place job advertisements.

Hiring new employees is extremely time consuming and expensive. You want that time and money well-spent. There will be no magic moment where, as your business grows, your hiring process smooths out and gets better on its own. The whole point of being aware of scaling is to consider that your successes and failures scale to the same degree as your growth. If your hiring process is in turmoil, that’s only going to increase to the same degree as you grow.

6. Establish an actual HR department

Smaller businesses often do not have an actual human resources department, and they may function completely fine without one.

Larger businesses, however, do not have that luxury. Remember, HR departments are dealing with benefits, training, and interpersonal relationships. The larger your business and the more management layers grow, the more disconnected or distant your employees can become from those making decisions. Even if your HR department starts as one dedicated employee, be ready to start it.

7. Budget for human capital growth

Your employees are your most important asset. They are your human capital.

Be sure you’re budgeting not just for business expansion, but also for employee growth, too. That means considering benefits, expectations of employees, and workplace culture.

It’s not terribly complicated, but remember: if it isn’t in the budget, it isn’t going to happen.

8. Get your best practices in line with your actions

Most businesses have best practices, but they don’t always do so great on the actual follow-through.

For example, you may say that team collaboration is a best practice, but you have actually incentivized individual rewards. Or, you reward employees on a quarterly basis but only do performance reviews twice a year.

When your best practices are out of sync with your actions, you will fail to meet the goals that the best practices are meant to achieve.

9. Perform a gap analysis

A gap analysis is where you locate current gaps in what your business has and what it currently needs. It’s a bit different than regularly assessing your actual employees. It takes other things into consideration that actually affect your employees

• Job descriptions. They should accurately reflect what the jobs are. Their accuracy, both in description and expectation, has an effect on employee retention.
• Current tools employees use. This includes all tools, from computers in offices to kitchenware.
• Employee benefits. This includes such things as retirement funds, health insurance, sick days, vacation days, and any other items your employees generally receive.

A gap analysis takes into consideration where your company is at now. It’s pretty common for a business to set their policies and benefits and not realize they are outdated in a few year’s time. Over time, your business changes. It grows, it needs to scale, and it needs to attract and retain great employees. A larger business, for example, can probably afford better benefits. You can’t rely on what you set up in the early days, and a gap analysis is set to specifically pinpoint what needs changing.

10. Leverage analytics for informed decision-making

Data is your friend.

It’s found everywhere, from employee interviews to your accounting department. The problem is that if you don’t make an effort to collect data regularly and with a consistent reason, that data goes unused in a file.

Knowing the numbers for what is happening in your business is the best way to make informed decisions. When it comes to Human Resource Planning, you’ll want data on:

• Productivity. Are your employees as productive as they were when you were smaller? Is productivity scaling correctly with your business growth?
• Retention. Are your employees staying or leaving, and at what rate? What direction is this trending?
• Managerial effectiveness. Are your managers effective or causing problems with how they lead employees?
• Benefit costs. Are your benefit costs in tune with goals and budgets, or are they overwhelming your profits?
• Training, recruiting, and onboarding expenses. Are training expenses as you expect, or have they become more than you bargained for? These costs will be closely tied to retention and hiring.

Tracking analytic data on HR-related issues is the only way to take the guesswork out of whether or not scaling your business will be a nightmare.

11. Take a customer-centric view of HR 

Take an outside-in approach to viewing your employees.

What kind of experiences are your customers having as your company grows? You want to be sure to look for areas where business growth can damage a great customer experience, such as:

• Personal interaction. Are your customers still having a personalized experience with your employees, or is business booming so much that your employees are trying to juggle too many customers at once?
• Customer support. When customers have questions or complaints, are your employees able to keep up with the increased demand?
• Service or product selection. As your business grows, are you adjusting what you offer to fit a growing and changing customer base?
• Knowledge of services or products. Do your employees have the necessary knowledge of what your growing business offers customers, or are there knowledge gaps?

Are your human resources where they should be? Are they ready to be what they’ll need to be for future customer needs?

12. Build a comprehensive employee handbook

You can’t “go by the book” if you never created one.

As a small business, a slim employee handbook and a casual approach to guidelines as rules might have worked. But as your business grows, you need, in writing, more to the plan.

An employee handbook that is as detailed as needed provides consistency. No employee feels as if they are being treated unfairly if the handbook is followed.

Using the assessments and other tips in this post should help you know to adjust your employee handbook. Reviewing your employee handbook at least once a year (preferably more) is ideal, and if changes are made, you will need to bring all of your employees together to inform them and get them to sign off on the new book.

13. Evolve and adapt your employee communication

Early on, you may have had more personal interaction with your employees because your business was smaller. As it grows, though, that interaction changes and lessens. You might not even realize that there are some employees who are used to more communication with you but aren’t getting as much of it since you are busier than usual.

The problem is that even if you feel like you’re just as busy and just as communicative, you have employees who are growing distant from you. So while you may not have needed formal staff meetings or communication in the early days, a business that is going to scale has to adjust for a different approach to communicating.

It might seem silly, but start with staff meetings when you are still small. Get staff used to the idea. Small staff meetings can scale to department or large staff meetings. Daily one-on-one conversation with every employee, however, does not scale.

14. Create mid-term employee goals

Growing your business means you have a big goal, and you are pushing for it.

That’s true enough. But the middle of that growth process requires mid-range goals.

Long-term vision and goals are at the opposite end of the playing field from where you started, but there’s a lot of game play between one end to the other. You need the structure of goals there, too.

Create goals for human resources for that middle time. These tend to be plateau or benchmark goals that indicate a step in the right direction or that trigger the next phase of a plan. Perhaps you want to see 100% of your employees trained in a specific skill set, but might set a goal of 50%  during the fast growth period.  Or maybe you’d like to see all of your employees hit a certain sales or productivity level, but it’s too difficult to get them all there while you’re in the growth process of hiring and onboarding, so you set a mid-range goal that helps you move forward without abandoning that larger, future goal.

15. Find a mentor

Scaling your business can be scary, particularly when dealing with human resources. Find other business owners who have already done what you are in the midst of, and see if they will mentor you.

16. Evaluate your leadership

If you have top-level management that are creating a problem now, they are certainly going to be just as difficult (if not worse) later.

Are there personality clashes? Leadership issues? Ethical or trust issues? Anti-authority problems? Are they able to self-start or do they need you to micromanage them or give them detailed instructions constantly?

And not only that, but your team of leaders needs to be…smarter than you. That’s how you grow.

17. Know when you need to subtract

The idea of growth necessarily brings to mind adding things.

Adding sales, customers, employees. Growing.

But scaling also means knowing when to subtract . There are processes (and even job positions) that you may have needed earlier on, but which now are slowing you down. It is critical to be able to look dispassionately at some business traditions and positions and determine which ones have no place in a growing business.

Do you see a common theme running through these tips?

It’s all about planning ahead now, before your business gets too big to make changes. Remember: scaling magnifies the foundation. You can scale the good or the bad just as easily.

Paving the path to success with When I Work

As we unravel the intricate art of human resource scaling, one solution stands out as a guiding light—When I Work. It’s an hourly scheduling software meticulously designed to harmonize and streamline your workforce management efforts. With benefits such as automated scheduling, real-time communication, and easy shift swapping, When I Work presents itself as a catalyst for successful business expansion. By harnessing this innovative tool, you can ensure that your scaling journey is marked by precision, efficiency, and seamless HR management, allowing you to focus on propelling your business to new horizons. Explore the potential of When I Work and revolutionize the way you scale your business today. Sign up for your free 14-day trial of When I Work today.

Q: Is Human Resource Planning only for big businesses?

A: Human Resource Planning is not limited to big businesses. It’s equally important for businesses of all sizes, especially those with hourly, shift-based teams. Imagine you’re running a café with waitstaff, cooks, and baristas. HRP helps you ensure you have the right number of people on each shift, preventing understaffing during busy hours or overstaffing when things are quiet. Tools like scheduling software, such as When I Work, can simplify this process by helping you plan shifts effectively based on your team’s availability and skillsets.

Q: Predicting the future accurately seems tough. How can HRP help with managing an hourly, shift-based team?

A: HRP can assist you in managing your hourly, shift-based team by giving you insights into historical patterns. Let’s say you manage a retail store with fluctuating foot traffic. HRP can help you identify peak hours when more staff is needed and adjust shifts accordingly. Scheduling software like When I Work can take this a step further, helping you create flexible schedules that align with demand. It ensures you have the right number of employees in each shift, avoiding staff shortages or surplus.

Q: Is HRP only about hiring? How does it impact the day-to-day operations of an hourly team?

A: HRP goes beyond hiring—it’s a comprehensive strategy that involves everything from recruitment to performance management. For businesses with hourly teams, like a customer service center, HRP ensures there’s a balanced distribution of skills among different shifts. This guarantees that no shift is understaffed due to a lack of specific expertise. Scheduling software, such as When I Work, plays a vital role here. It empowers you to assign the right people with the right skills to each shift, improving efficiency and delivering excellent service.

Q: Can HRP help avoid problems in managing an hourly, shift-based team?

A: Absolutely! HRP is a proactive approach that prevents issues like insufficient staff coverage during busy periods or overworking employees. Let’s say you’re managing a restaurant with peak dining times. HRP helps you anticipate these busy periods and schedule more staff to handle the rush, enhancing customer satisfaction. By incorporating scheduling software like When I Work, you can ensure a smooth operation by distributing shifts evenly among your hourly team members, minimizing burnout, and ensuring that everyone has a fair workload.

Q: Is HRP a one-time thing for managing hourly teams?

A: No, HRP is an ongoing process, especially crucial for businesses with hourly, shift-based teams. As customer demands fluctuate, you need to adapt your schedules accordingly. For instance, managing a call center with varying call volumes requires constant adjustments. HRP helps you align staffing levels with call traffic patterns. Scheduling software, like When I Work, simplifies this continuous process by allowing you to quickly modify schedules based on changing needs, ensuring your hourly team remains efficient and your customers stay satisfied.

Like What You See?

Join over 140,000 other people and get valuable business tips delivered right to your inbox.

Something Went Wrong

We had some issues creating your account. Please check your info and try again.

Employee Burnout: Causes, Signs, And Strategies

9 Strategies For Decreasing Labor Costs

Rotating Shifts: A Manager’s Guide to Rotating Schedules

How to Save Time And Money With Automatic Scheduling For Employees

40 Employee Appreciation Ideas Your Staff Will Love

How to Write Up an Employee in 8 Easy Steps

• Search Search Please fill out this field.
• Human Resource Planning (HRP)
• Understanding HRP

What Is the Goal of Human Resource Planning (HRP)?

• Human Resource Planning FAQs

The Bottom Line

• Business Essentials

Human Resource Planning (HRP) Meaning, Process, and Examples

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is the continuous process of systematic planning to achieve optimum use of an organization's most valuable asset—quality employees. HR planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.

There are four key steps to the HRP process. They include analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and supporting organizational goals. HRP is an important investment for any business as it allows companies to remain both productive and profitable.

Key Takeaways

• Human resource planning (HRP) is a strategy companies use to maintain a steady supply of skilled employees while avoiding staffing shortages or surpluses.
• HRP needs to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term.
• Having a good HRP strategy in place can mean productivity and profitability for a company.
• HRP is made harder by the fact that not everything can be predicted.
• There are four general steps in the HRP process: identifying the current supply of employees, determining the future of the workforce, balancing between labor supply and demand, and developing plans that support the company's goals.

Michela Buttignol

What Is Human Resource Planning (HRP) Used For?

Employees are a key part of any business. Without a strong workforce, income will likely dry up and the company will go out of business. HRP is designed to prevent this from happening. Its mission is to identify current and future hiring and training needs.

HRP allows companies to plan ahead so they can maintain a steady supply of skilled employees. The process is used to help companies evaluate their needs and to plan ahead to meet those needs.

HRP needs to be flexible enough to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term. To help prevent future roadblocks and satisfy their objectives, HR managers have to make plans to do the following:

• Find and attract skilled employees
• Select, train, and reward the best candidates
• Keep employees motivated
• Cope with absences and deal with conflicts
• Succession planning
• Promote employees or let some of them go
• Keep tabs on trends that could impact future supply and demand

Identifying a company's skill set and targeting the skills a company needs enables it to strategically reach business goals and be equipped for future challenges.

The goal of HR planning is to have the optimal number of staff to make the most money for the company. Staying on top of this and achieving effective HRP can ensure that the company:

• Gets the best out of current employees and increases their value
• Has a competitive advantage in its industry
• Is better placed to respond to challenges and adapt to changes

Challenges of Human Resource Planning (HRP)

HRP offers many advantages but it isn't without challenges. The future isn't easy to predict. A technology breakthrough can change everything, as can a black swan event. Issues such as employees getting sick and wealthier or more prestigious competitors poaching staff can also cause serious problems.

Additionally, as globalization increases, HR departments will face the need to implement new practices to accommodate government labor regulations that vary from country to country. The increased use of remote workers by many corporations will also impact HRP and will require HR departments to use new methods and tools to recruit, train, and retain workers.

Companies can set themselves up to better deal with these types of challenges if they are adaptable and continuously keep tabs on the world around them. The more prepared a company is for an event that impacts its human resources, the better it can handle and potentially take advantage of it.

HRP strategies must frequently be revised to match not only the company's changing needs but also external changes.

There's also the challenge of HRP being time consuming and potentially costly. HRP offers benefits but it can take a while to reap them.

A high level of employee engagement can be essential for a company's success. If a company has the best employees and the best practices in place, it can mean the difference between sluggishness and productivity, helping to lead a company to profitability. However, like most important investments, it can take a while for these efforts to pay off. In the beginning, HRP will be a drag on profits.

What Are the Four Steps to Human Resource Planning (HRP)?

There are four general, broad steps involved in the HRP process. Each step needs to be taken in sequence in order to arrive at the end goal, which is to develop a strategy that enables the company to successfully find and retain enough qualified employees to meet its needs.

1. Analyzing Labor Supply

The first step of HRP is to identify the company's current human resources supply. In this step, the HR department studies the strength of the organization based on the number of employees, their skills, qualifications, positions, benefits, and performance levels.

2. Forecasting Labor Demand

The second step requires the company to outline the future of its workforce. Here, the HR department can consider anything that factors into the future needs of the company, including promotions, retirements, layoffs, and transfers. The HR department can also look at external conditions impacting labor demand , such as new technology that might increase or decrease the need for workers.

3. Balancing Labor Demand With Supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis that lays out specific needs to narrow the supply of the company's labor versus future demand. This analysis will often generate a series of questions, such as:

• Should employees learn new skills?
• Does the company need more managers?
• Do all employees play to their strengths in their current roles?

4. Developing and Implementing a Plan

The answers to questions from the gap analysis help HR determine how to proceed, which is the final phase of the HRP process. HR must now take practical steps to integrate its plan with the rest of the company. The department needs a budget , the ability to implement the plan, and a collaborative effort with all departments to execute that plan.

Common HR policies put in place after this fourth step may include policies regarding vacation, holidays, sick days, overtime compensation, and termination.

Why Is Human Resource Planning Important?

Human resource planning (HRP) allows a business to better maintain and target the right kind of talent to employ—having the right technical and soft skills to optimize their function within the company. It also allows managers to better train the workforce and help them develop the required skills.

What Is "Hard" vs. "Soft" Human Resource Planning?

Hard HRP evaluates various quantitative metrics to ensure that the right number of the right sort of people are available when needed by the company. Soft HRP focuses more on finding employees with the right corporate culture, motivation, and attitude. Often these are used in tandem.

What Are the Basic Steps in HRP?

HRP begins with an analysis of the available labor pool from which a company can draw. It then evaluates the firm's present and future demand for various types of labor and attempts to match that demand with the supply of job applicants.

Quality employees are a company's most valuable asset. HRP involves the development of strategies to ensure that a business has an adequate supply of employees to meet its needs and can avoid either a surplus or a lack of workers.

There are four general steps in developing such a strategy: first, analyzing the company's current labor supply; second, determining the company's future labor needs; third, balancing the company's labor needs with its supply of employees; and fourth, developing and implementing the HR plan throughout the organization.

A solid HRP strategy can help a company be both productive and profitable.

International Journal of Business and Management Invention. K. Prashanthi. " Human Resource Planning-An Analytical Study ," Page 64.

• Terms of Service
• Editorial Policy
• Privacy Policy

More From Forbes

20 tips for aligning workforce planning with organizational strategy.

• Share to Facebook
• Share to Twitter
• Share to Linkedin

Workforce planning is about strategically preparing for potential skill gaps you may have in the future, whether from internal promotions, retirements or turnover. The key to doing this successfully is aligning your workforce planning efforts with the broader goals and long-term needs of your organization.

Below, 20 Forbes Human Resources Council members share practical tips on forecasting talent needs, developing skills for the future and integrating workforce planning with business strategy. These insights will help you build a team that contributes to the long-term success of your organization.

1. Develop A Skills Inventory Using Analysis

Aligning workforce planning with organizational strategy is crucial. Ensuring that the organizational strategic objectives including growth plans are clear. HR should assess current workforce analysis and develop a skills inventory, which will then be used to develop a forecast for future workforce projections. - Suzi Okpere , Librod Energy Services

2. Include Salary Costs In Planning Conversations

Identifying the organizational strategy first will inform workforce needs. Include finance partners up front to ensure salary costs are considered for critical roles. Be mindful during talent and leadership transition planning conversations to include the anticipated growth of teams. Additionally, evaluate roles and job descriptions to determine if they support the overall organizational direction. - Kim Blue , K Blue Consulting, LLC

3. Integrate Budget And Margin Considerations By Collaborating With Finance

HR teams can align workforce planning with organizational strategy by integrating budget and margin considerations. Collaborate with finance to set feasible staffing plans, conduct skills gap analyses to prioritize hires and use scenario planning to model budget impacts. Regularly perform cost-benefit analyses to ensure resource allocation supports strategic goals and maximizes profitability. - Liz Corey , 2911 Talent

New And Dangerous Android Attack Warning Issued

Nyt ‘strands’ hints, spangram and answers for monday, september 9th, used tesla cybertruck price continues to crash, 4. develop a contigent workforce program.

Long-term forecasting is tough, given the high degree of volatility in today’s business environment. In addition to your long-term planning, make sure you have a significant and robust contingent workforce program that will allow your organization to proactively plan for forecasts that will almost certainly be wrong. - Barry Asin , Staffing Industry Analysts (SIA)

5. Prioritize Predictive Planning To Be More Proactive

Talent strategy can be often more reactive than proactive, with talent teams reacting to immediate needs without considering long-term goals. HR teams need to prioritize predictive workforce planning, using data analytics and AI to anticipate future talent needs, along with embracing succession planning and talent pipelining to identify internal and external candidates for future skills needs. - Sanjay Sathe , SucceedSmart Inc .

Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?

6. Review And Adjust Workforce Plans Regularly

HR teams can align workforce planning with organizational strategy by collaborating with leadership to understand long-term goals. Use data analytics to forecast staffing needs, identify skill gaps and create targeted recruitment and training programs. Regularly review and adjust the workforce plan to keep it aligned with evolving business priorities. - William Stonehouse , Crawford Thomas Recruiting

7. Follow A Systematic Approach

HR teams can align workforce planning with organizational strategy by 1. analyzing current and future business needs as per the goals, 2. assessing current workforce capabilities, 3. identifying skill gaps, 4. developing talent acquisition and development plans, 5. implementing succession planning and 6. continuously monitoring and adjusting strategies based on changing business conditions. - Subhash Chandar , Laminaar Aviation Infotech Group

8. Conduct Skills Gap Analyses And Upskill Existing Employees

HR teams can align workforce planning with organizational strategy by collaborating closely with leadership on long-term goals. They should conduct skills gap analyses and implement strategic recruitment to address future needs. Upskilling existing employees and using data analytics for decision-making is crucial and fosters a learning culture. - Jessica Kriegel , Culture Partners

9. Leverage Technology To Analyze Future Needs

Technology is a key enabler for strategic workforce planning. Instead of manual projections, which tend to be reactive at best and inaccurate at worst, leading HR teams can leverage technologies like AI. The ability to analyze large sums of data in real time to examine labor market conditions and internal skills availability can more accurately align staffing levels with future strategic needs. - Jennifer Rozon , McLean & Company

10. Be Transparent About Strategy

Transparency around strategy is critical. At my digital banking company, we prioritize communicating strategic objectives to our entire workforce and they are involved in contributing to those objectives. With all employees aware of and bought into our broader goals, opportunities for future organizational needs become apparent. From there, tailored training to bridge skill gaps is key. - Julie Hoagland , Alkami

11. Account For Business Expansion, Market Dynamics And Tech Progress

Human resources teams can synchronize workforce planning with the organization's strategic goals by utilizing data and predictive analytics to anticipate workforce requirements. By employing these techniques, HR professionals can project future staffing needs in relation to expected business expansion, market dynamics and technological progress. - Laura Spawn , Virtual Vocations, Inc.

12. Combine Workforce Planning And Succession Management Approaches

To ensure your talent strategy meets current and future business needs, HR pros should take the following four steps: 1. Identify critical positions and skills; 2. Assess the current workforce; 3. Develop existing talent or hire new talent to close workforce gaps and 4. Forecast future position and skill needs. By combining workforce planning and succession management strategies, HR can ensure continuity today and going forward. - Laci Loew

13. Embed Workforce Analysis Within Existing Strategic Planning Cycles

HR teams can align workforce planning with company strategy by embedding these practices within existing key annual strategic planning processes. Use this systematic approach and leverage existing cycles to assess staffing levels and how well skills match future needs. Do this by conducting workforce analysis, forecasting future needs and developing a talent strategy to close any identified gaps. - Dr. Timothy J. Giardino

14. Form A Deep Understanding Of The Company's Strategy

A deep understanding of company strategy (long-term goals, upcoming projects, expansion) should be at the center of workforce planning. Effective analysis and forecasting require an understanding of where the business is heading. HR must ensure workforce planning can adapt to a number of dynamic inputs, such as succession planning, talent pipeline, organizational performance and market feedback. - Dr. Kelly Meredith , Southworth Development

15. Work Closely With Management To Prepare For Future Challenges

Staffing needs to align with the organization’s business strategy. HR teams must ensure they work closely with management to fill any skill gaps. Additionally, preparing for any future challenges, including succession planning for each level of the organization, is critical for success. - Niki Jorgensen , Insperity

16. Focus On What You Know And Can Control

Practice smart planning by aligning workforce planning with organizational strategy, and focusing on the work first—forecasts, tools, people, timelines, costs, promotions and volume—and the levers that change each of these factors. Looking at inputs and outputs helps drive fact-based but flexible decision-making by focusing on what you know and can control. Keep workforce planning focused. - Graham Peelle , Endeavor Strategic

17. Close The Skills Gap Between Forecasted And Current Capabilities

HR needs to use three steps. Get maximum clarity about anticipated future needs—HR should be in lockstep with the C-suite here, not trailing behind reading tea leaves. Size up the skills gap between that forecast and apparent current capabilities. Now survey the workforce for hidden talents and ambitions. Train the workforce accordingly. Future dream teams may be under your nose, and the skills gap narrower than you think. - Graham Glass , CYPHER Learning

18. Analyze Organizational Structures And Job Families

The traditional method of having a people plan must be considered. HR must understand all business strategy elements to ensure workforce needs align with predicted forecast revenue, profitability, workload, client commitments, local compliance, recruitment strategy, talent management and succession planning. Organizational structures and job families must be analyzed to streamline processes. - Dr. Nara Ringrose , Cyclife Aquila Nuclear

19. Use Insight Into Attrition Levels And Growth Requirements

HR teams have an insight into attrition levels, growth requirements and location strategies that are critical for businesses to understand while creating organizational strategies. HR and TA teams can take a proactive role by bringing data and insight to inform the strategy of the business. This ensures the team can deliver the skills they need at a cost base they can afford. - Nicky Hancock , AMS

20. Leverage Data Analytics And Predictive Modeling

Use data analytics and predictive modeling to anticipate future staffing needs based on business growth, market trends and technological advancements, and consider factors like retirements, turnover rates and industry changes. Consider options like contingent workers, freelancers and gig workers to fill short-term or specialized roles. - Britton Bloch , Navy Federal

• Editorial Standards
• Reprints & Permissions

11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/entrepreneurship/pages/1-introduction

• Authors: Michael Laverty, Chris Littel
• Publisher/website: OpenStax
• Book title: Entrepreneurship
• Publication date: Jan 16, 2020
• Location: Houston, Texas
• Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
• Section URL: https://openstax.org/books/entrepreneurship/pages/11-4-the-business-plan

© Jun 26, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.