If you’re a student, a fresher, or looking to build a career in the HR field, this article is specifically for you as we’re going to talk about HR Planning, or Human Resource Planning. Many people think that HR’s job is only about conducting interviews and preparing salary slips, but in reality, it’s a strategic function that acts as the backbone of the company. And the first step in strengthening this backbone is HR planning.

If you go and checkout the blogs at indeed.com, naukri.com, you will find HR planning is the roadmap that outlines what kind of people your company will need three years from now, how many, and how to develop them. This is what that ensure your business has the correct number of skilled employees to meet company goals. Microsoft Chairman Satya Nadella once said, “Our greatest asset is our people, and HR planning is the mirror that shows us what that asset will look like in the future.”

Imagine a large tech company, like TCS or Infosys, planning to recruit 10,000 new engineers next year. This well-thought-out plan is HR planning. It’s not a one-day job, but a systematic process. The renowned management guru Peter Drucker said, “Planning means making decisions about the future today.” And that’s exactly what happens in HR planning – preparing the right people for tomorrow while understanding today’s needs.

So, let’s now understand the 7 essential steps of HR planning in detail. These aren’t just theoretical concepts, but practical steps that the world’s top companies follow daily.

Step 1: Understanding Organizational Objectives

The first and most important step is to understand the goals of a company.  If the company’s goal is to expand its business to new cities in the next 2 to 3 years, then HR needs to know in advance how many Sales Managers, Marketing Executives, and technical staff it will need in those new cities. As one report found, companies that align their HR planning with their business goals are  72% more profitable and grow revenue 58% faster than unaligned companies!

Step 2: Analysing Current HR Inventory

The next step is to create a list of the people you currently have and analyse them. This will help in better planning as you aware of how many skilled person in your company, their position (junior or senior), how many are going to retire in next 2-3 years. Based on this a company can plan better… hire new talents and provide them proper training. For example, if 30% of the company’s Senior Engineers are expected to retire in the next 2-3 years, HR should start training and preparing Junior Engineers now.

Step 3: Forecasting Demand

In this step, HR estimates how many skilled employees will be needed in the future. This estimate is based not only on growth but also on technological changes, market trends, and competition. For instance, after the Covid-19 pandemic, the demand for experts in the IT and Healthcare sectors increased dramatically. Companies that were able to forecast this change were the ones that thrived.

Step 4: Forecasting Supply

Now the question arises: where will these needed people come from? Supply forecasting examines whether the required personnel will be available from within the company (e.g., through promotions or training) or whether they will need to be hired externally. According to LinkedIn research, more than 70% of companies are focusing on developing their internal talent pool (existing employees) because it reduces costs and increases employee morale.

Step 5: Analyzing the Gap

This is perhaps the most crucial step. After forecasting demand and supply, the gap between the two needs to be identified. Is there simply a shortage in the number of people, or is there a lack of necessary skills? For example, today every company needs data scientists and AI experts. If the current team lacks these common and trending skills, it’s a ‘skill gap’ that needs to be filled either through training or new hires.

Step 6: Creating an Action Plan

After identifying the gap, an action plan is created. This plan essentially becomes the HR strategy. It includes things like Recruitment, Training & Development, Promotion, Transfer, and sometimes even Restructuring. For example, if the gap is significant, campus drives and advertisements on job portals can be used. If there is a skill gap, upskilling workshops can be organized for employees. Step 7: Evaluation and Monitoring

Step 7: Evaluation and Monitoring

The final step ensures that our entire plan is working in the right direction… in short it should fulfil with the goal. Are we able to hire the number of people we aimed for? Are the training programs effective? Continuous monitoring and feedback are essential for this. According to a survey by the renowned consultancy firm Gartner, organizations that continuously evaluate their HR planning process are 1.5X more likely to achieve their business goals.

Conclusion

So just as a builder creates a blueprint before constructing a house, HR planning is the blueprint for building the ‘Human Capital’ of any organization. It’s not just the responsibility of the HR Department alone, but a collective responsibility of the entire company. If you want to become a successful HR professional in the future, don’t just consider these 7 steps as theoretical knowledge. Think about applying them in real-world business scenarios. Read a company’s business goals and think about what kind of HR planning you would prepare for it. This practical thinking will set you apart from the crowd.

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