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Human resources planning: How to create an effective HR plan

3-minute read

It's a common scenario for entrepreneurs: You're fighting fires daily and your business is moving so fast you have little time for human resources.

To get on top of the situation, your first step should be to create a detailed HR plan.

Without a written HR plan, small business owners often face setbacks such as costly employee turnover, procedural bottlenecks and inconsistent productivity. Think of your HR plan as a practical, tactical tool that can help you determine exactly where you're going and drive your business forward.

The people side of your business plan

So what should you expect to find in a human resources plan?

An HR plan can take many forms, depending on the complexity and size of your company, but essentially it's a written document that details the people side of your overall strategic business plan.

Generally, it covers issues that range from recruiting employees to motivating them to stay with your company and be productive.

Assess your company’s skill set

At the top of the list of tasks for developing your HR plan should be an assessment of your company's current skill set. This will help you identify gaps and target your future efforts.

Ask if your company has the skills it needs to grow and face upcoming business challenges. Do I need to hire new people? Is training a priority now? Do I have to let go of people whose skills no longer fit?

Review your organizational design

Your HR plan should also cover organizational design. Here, essential components include job descriptions, compensation and reporting relationships. You want to ensure that each employee is doing value-added work that benefits your customers.

As your business evolves with changing market needs, it's important to examine your organizational design on a regular basis.

Training is another important part of an HR plan. Factors such as technological change and globalization mean that employees have to upgrade their skills constantly to keep your company competitive. An HR plan will help you map out the right training strategies for your company, whether they're web-based courses, self-paced training or interactive workshops.

A plan can also help you keep track of your return on investment and ensure your training schedule has a minimal impact on production. You want training strategies that are in line with your company's skill requirements and are linked to performance management.

Outline how you will motivate and retain employees

You need the right people to stay on board to take your company further. An HR plan will outline your key strategies to motivate employees and maintain their loyalty.

Being creative with employee perks, rewards and compensation is one of the first steps. For example, your HR plan can clearly address motivational strategies such as profit-sharing or short-term rewards that involve personal or family life, such as entertainment vouchers.

Establish your succession plan

A sound HR plan is incomplete without clear succession planning strategies.

Ask yourself, who will take over my company's critical activities when I'm no longer around? You also have to consider key operational positions to ensure all of the vital functions are covered.

Get external help

These are complex issues that can be difficult to take on alone.

Getting external help with an HR plan can help you clarify your vision, navigate through your options and identify the ones that will work.

As well, working with an external consultant can help you be accountable to your objectives and monitor your progress.

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