7 Steps of Human Resource Planning

7 Steps of Human Resource Planning-feature image
December 15, 2022 Reviewed By : Megha Sharma .6 Min read

Human resources are among the most crucial assets of any business organization. Well, no firm can afford the risk of a skills shortage. Hence, to make the best use of available resources in the organization, it is crucial to have an HRP process in place.

It is a continuous, people-oriented process that helps an organization operate without any manpower surplus or shortage. HRP also ensures that you have the right people in your team with the desired skills and competency level to grow your company.

What is Human Resource Planning?

Human Resource Planning helps companies evaluate the current and future human resources needs. It involves developing plans to make better use of employees’ skills and aptitudes and hiring new ones.

An effective HRP strategy in place ensures an ideal fit between employees and the job role as well as organizational culture while dealing with either manpower shortage or surplus. Hence, HRP is critical for any business as it allows them to evaluate their workforce needs and plan accordingly to achieve higher productivity.

There are 7 general steps in the HRP process that we will discuss ahead!

7 Steps in Human Resource Planning

7 Steps in Human Resource Planning

Each step involved in the human resource planning process needs to be followed in a particular sequence to meet the end goal. The process involves developing a strategy that enables the company to find and retain the right and qualified employees in order to meet its organizational needs. It also helps analyze HR needs for the near future and plan accordingly. Read on to know the various other steps involved in the human resource planning process!

  • Analyze Objectives

The first and foremost step in the HRP process is conducting a detailed analysis of the firm’s mission and vision as well as the objectives of different departments in the organization. While each department has different objectives and a specific set of expectations from human resources, it is vital to have a clear understanding beforehand.

The objectives can comprise improving skill levels of existing employees or recruiting new employees for the process, selection procedure, incorporating training and development program among other things.

Suggested Read: Why is Succession Planning Important in HRM

  • Prepare Human Resource Inventory

After analyzing organizational objectives, the next step is to study the current state of resources available in the organization. For the same, you can use the human resource information system (HRIS), if you have one. This will help you analyze the current number of people employed in the organization – their skills, performance, capabilities and potential abilities.

Initially, the managers need to study the capabilities of their existing workforce and determine whether the current staff can meet the future demand. At the time of studying manpower inventory, you can consider factors like the skill level of employees, productivity or creativity showcased in each period, eligibility for the current and future job role, etc.

  • Forecast Demand

Forecasting the demand is one of the most daunting yet crucial parts of the human resource planning process. It involves estimating the right number of employees to be hired in line with the company’s strategic plan over a given period. So, based on the objectives of the different departments and the resource inventory available, the HR planning team can forecast the demand of the employees.

Suggested Read: 10 Major Functions of HRM (Operative and Managerial)

At this stage of demand forecasting, we can make estimate regarding:

  • Addition of new role at work
  • Prevent shortage of human resources
  • Kind of personnel required for the job position
  • The right number of personnel to meet long-term business goals

After demand forecasting, it is essential to assess the capability of an organization to supply the required workforce. Human resources supply source includes existing workforce in the organization as well as internal and external supply. So, as mentioned earlier we must first analyze the sufficiency of the workforce currently in the organization and then look for internal and external sources.

Supply forecasting helps in:

  • Reviewing the current staff
  • Assessing the current and future needs to fill the planned positions
  • Estimate Gaps

Once your forecast is complete, you’ll understand the human resource demand and supply needs of the future. Also, you’ll be able to identify whether you need to fill the gap with internal employees or look for external sources hired part time, full time or as contractors.

At this stage of HR planning, the net HR requirement and strategy gap are to be estimated. The difference between a forecast and the actual result is referred to as the strategy gap. And the result of this calculation is either surplus or deficit HR requirement. While surplus refers to the number of personnel to be terminated, deficit number determines the total number of personnel to be recruited.

Pro Tip: If you have an adequate number of employees who don’t have the required skillset, you can use the training and development program to upskill them.

  • Formulate the Action Plan

Based on the gap analysis, the human resource planning team prepares an action plan to begin the recruitment, transfers, training, promotion, or early retirement as per your business needs. When you are formulating the plan, it is crucial to assign the start and end dates for each action as well as take notes about each part of the plan.

  • In case of surplus result: Reduce working hours and hold hiring
  • In case of deficit result: Recruit new employees and train the existing ones
  • Implement the Plan

This is certainly the most challenging aspect of any HRP process. It goes without saying, the plan should be aligned with the goals and objectives of each department of the organization. At this stage of the planning process, HR professionals must take practical steps to integrate the formulated plan.

While the department needs a budget, the ability to implement the plan is a collaborative effort of each department of the organization.

  • Monitor, Control and Get Feedback

It is the final step in the manpower planning process. Once the HRP plan is implemented, it should be monitored continuously to identify the loopholes in your plan, if any. Not only this, but timely review helps in taking corrective measures. Hence, ongoing measurement, reporting and continuous feedback is crucial to make the human resource plan a success.

Suggested Read: Recent Trends in HRM in 2022 That You Must Consider

How Does SumHR Software Help with Human Resource Planning?

Human resources

HRMS software like SumHR helps perform all HR functions through the use of information technology. The software collects, stores and allows access to all important HR planning data on one comprehensive HRIS platform. The core human resource management system not only saves important employee information but also monitors the manpower planning process continuously to take timely corrective action. SumHR software further includes functionalities that help analyze present employee availability and forecast labor demand accurately while supporting organizational goals.

Wrapping Up

The HR planning process is crucial to estimating future HR requirements. Through strategic human resource planning, organizations can successfully allocate human resources across different processes.

Related Categories: Payroll Management Software | Attendance Management Software | Leave Management Software | Recruitment Management Software | Grievance Management Software


  1. What is HR planning and its importance?

    Human resource planning is a strategy company follows to forecast the demand for and supply of manpower. It can also be defined as the method of reviewing human resource requirements to ensure the right and skilled employees are made available to the organization. Proper human resource planning also provides a pathway to future development.

  2. What are the main types of HR planning?

    The major types of HR planning include tactical, strategic and operational planning. Tactical planning includes what each department needs to achieve and how it must go about it. Strategic human resource planning helps the company to identify its current and future human resource needs. Operational planning, on the other hand, put HR management team to support management and staff in achieving their day-to-day operations.

  3. What are the characteristics of human resource planning?

    The main characteristics of manpower planning process are as follows – Goal oriented, future focused, continuous process, right number and kind of people, determination of demand and supply of resources in the organization, among other things.

  4. What are the challenges of human resource planning?

    The major challenge of HR planning is a lack of understanding of this process by managers and human resource specialists in the organization. Other common challenges include accurately forecasting the demand and supply of human resources, and rapid technological changes, among other things.

  5. Which is the first stage in HR planning?

    The first stage in the human resource planning process is to analyze the objectives of various departments. Accordingly, you can design the objectives and policies to meet the future HR needs of your organization.

Written by Nishi Agrawal

Nishi Agarwal is a talented content writer and dance fitness instructor. She holds a degree in Mass Communication from Patna Women's College, where she acquired the tricks for writing, editing, and journalism. As a content writer with Techjockey.com, she has gained valuable experience in creating engaging and informative... Read more

Still Have a Question in Mind?

Get answered by real users or software experts

Talk To Tech Expert