No matter how large or small your business is, there are three main teams/sections that are key in running your company: finance/accounting, customer relationship management, and HR or employee management. Today, most companies have some sort of strategic plan set up for both accounting/finances and customer relationship management. They have goals to meet and strategies laid out to help them achieve their goals. However, most companies are lacking the same kind of strategic plan when it comes to their HR. Whether your team is two people or 300 people, not having an HR strategy plan can cause significant failures when it comes to employee acquisition, retention, and overall satisfaction.
What is an HR Strategic Plan?
HR or human resources is the department or people responsible for your employees. They are usually responsible for finding, training, and managing all of the other employees. They regularly deal with conflict resolution, employee benefits, employee retention, and staff development. When you develop and put in place a strategic plan for your HR, you will be able to organize all of their different responsibilities. From there, you can set specific HR-related goals that will help further the company and ensure that you are successfully working towards those goals.
Reasons Why You Should Create an HR Strategic Plan
1) Predict Your Future Needs
Do you have a plan in place for where you want your company to go over the next year or five or ten? Well, those goals will require different talent needs and employee requirements. Having an HR strategic plan will allow you to figure out what your people need now to accomplish their goals and what they will need in the future. When you have a picture of what kinds of jobs you will need to fill, you can get started in your search early to find the best people for the job. Figuring out what kind of talents your employees have will also allow you to optimize shifts to improve overall efficiency and reduce the wage bill.
2) Minimize Non-Compliance Costs
Every aspect of your business is required to meet specific rules and regulations. If you do not, you will end up paying non-compliance costs which can get pretty expensive depending on the compliance issue. Without a specific strategic plan in place, it is easy for things to fall through the cracks, even if you think you are meeting all current regulations. Having an HR plan in place will allow you to remove any gaps in compliance and meet all current employment legislation. Your HR plan will help you minimize or even avoid all non-compliance costs, saving you a lot of money in the long run.
3) Increased Productivity
Productivity is essential when it comes to HR, and there is evidence that when employees are happy, they are much more productive. A major portion of your HR strategic plan will be dedicated to employee engagement and satisfaction. You will put in place measurements to figure out overall morale, productivity, and commitment to the company. From there, you will be able to figure out what you need to do to meet your employees’ needs. As you put new systems in place, you will continue to measure productivity and morale, too, hopefully, watch both improve with time.
4) Employee Retention
Though it might take a little while, you will eventually find the team of people that you need to make your company run smoothly and meet goals. Once you have that team, you must do everything you can do to keep them. Your HR strategic plan should be designed to help you do just that.
One essential part of keeping your employees is helping them grow and expand their careers within your company, so they do not have to look elsewhere for that growth. In your plan, you will be able to develop formal recognition programs and career development pathways. These plans will help your employees feel seen and valued, which will make them much more likely to stay long-term.
5) Continuous Improvement
Likely, you are constantly focusing on improving your company regarding financial goals and customer relationship goals. Still, you should also be continuously working towards goals related to HR. Without a plan and specific measurements, you can’t figure out what parts of your HR strategy are working and what is not. A plan allows you to evaluate specific factors such as employee turnover, number of vacant positions, grievances, and satisfaction levels. With that information, you will be able to make positive and accurate decisions to improve your company.
How to Create a Strategic HR Plan?
Developing a strategic plan for HR does not have the be a difficult process. Like other strategic plans, you just need to evaluate where you are, figure out where you want to go, and decide what you need to get there. There are five basic steps you will need to go to develop your plan:
1) Identify your future HR needs. This could include what kind of talents you will need on staff, what kind of culture you want, and what systems/processes you need to develop.
2) Figure out how your current HR is doing. You what to figure out if you are meeting goals, your HR strengths, and weakness, and identify any legislative requirements you need to meet.
3) Now that you have figured out where you are and what you will need, you need to identify any gaps. Gaps may be in policy, procedures, capability, resource allocation, etc.
4) Step four is figuring out your strategies to fill the gaps. This could include hiring new people, training and development, new policies/procedures, etc. When doing this, make sure you identify what gaps are most pressing. For instance, if you are not meeting a certain legislative requirement, you likely want to start there.
5) Put the plan into place and monitor what is working and what is not. As you monitor the plan, you should communicate successes and modify the plan when you see things that are not working.