6 Steps to Effective Human Resources Planning for SMEs

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There is no getting around it. Your employees will always be an important factor in your company’s overall success, which is why effective human resources planning is critical.

As your business grows, you need to figure out how to retain your most effective employees and attract the new talent required for your business to take the next step forward. To help your business succeed, we have highlighted some of the most important steps for effective human resources planning!

We tailored the step of the human resource planning process to the unique needs of small and medium-sized businesses.

1. Assess Your Current Human Resources Capacity

Whenever you are writing or improving any human resources strategy, you first need to assess your current situation and staffing needs. Develop a skills inventory for your existing employees and use it to catalogue the skill your business already has at its disposal. Determine whether or not you are using all of this talent to its full potential.

Knowing where you stand will help you decide whether or not you need to hire and train new employees or if you can retrain and reassign your current workforce to use their skills more effectively. In some cases, reassigning and restructuring your current human resources can vastly increase productivity.

2. Accurately Forecast Your Future HR Requirements

Once you have taken an accurate inventory of the resources your business already has access to, you can begin to come up with a plan for your future needs. Do you need to hire more skilled employees, and what will the timeline be for that onboarding process?

Knowing what you need and when you will need it can help you develop an effective hiring plan. It will also help you monitor the market to determine when potential employees who have the qualifications you require are available.

Forecasting your HR needs will also help you budget appropriately. You may need to increase your salary offerings to attract the calibre of talent your business will need to grow and become more competitive.

Avoid leaving workforce recruitment efforts until the last minute. When your business requires new talent to take the next step forward, you do not want to experience delays because you are wasting time tracking down qualified candidates and struggling to onboard them promptly to meet a future need.

3. Devise an Appropriate Training and Talent Development Program

Talent development and an appropriate training system for new and existing employees are crucial components of any human resources plan.

Having a system in place for training and onboarding new talent ensures you will integrate them into the culture of your business quickly and effectively. It is also important to nurture the existing talents you have at your disposal and encourage those employees to develop their skills and prevent high employee turnover.

Training and talent development is not simply a phase you put new employees through. Ongoing training will keep your existing employees competitive and allow them to grow with your business. Interactive workshops, online courses, and mentorship programs are all important; however, you need to remember that your employees need to be motivated to acquire these new skills.

Employee benefits, like promotions, raises, and bonuses, can help with motivation. So can more vacation days. Having these training programs lined up as well as the rewards offered for completing them will help improve the employee experience and encourage your business to grow and stay competitive.

4. Develop and Introduce an Effective Performance Management System

An important step in human resources planning is devising a system that you can use to measure employee performance. Develop ways to identify where your employees are succeeding and the areas that need improvement.

You can create ways to incentivise your employees to perform to the best of their abilities. Bonuses and non-financial rewards linked to particular targets and achievements are a great way to motivate your employees to perform better and work harder towards your company’s growth.

5. Plan for Every Outcome

Unfortunately, small businesses neglect many other areas when planning or improving their human resources system. Onboarding new talent, training employees properly, and forecasting future requirements are important, but you must explore some of the less exciting areas of human resources planning.

For example, how will your business handle potential terminations? Do you have a system in place for interdepartmental transfers, promotions, and even retirement? Essentially, you must plan for every eventuality. It is far more exciting to plan growth and expansion, but you must take the time to plan for movement from your company and within it.

6. Consider Legal Compliance

You also need to ensure that all of your human resources planning is compliant with employment legislation that is relevant for your particular industry. Legal compliance is critical whether you run a small business with just 25 employees or work in the HR department for a massive organization. Everything from how you hire and terminate employees to how you handle payroll and vacations can put your entire business at risk if it is not compliant with the appropriate workplace legislation.

If you find this step of your human resource plan confusing or overly complicated, it is beneficial to consult with outside HRM professionals who specialize in this particular field. Doing so could protect your business from costly and distracting lawsuits, so these outsourcing efforts can pay for themselves and be a worthwhile investment for the long-term growth of your business.

The HRM professionals at HR on Hand can help you navigate these murky waters and develop a human resources strategy that fits your specific business. Do not be afraid to reach out for external assistance, as it will almost always pay off, especially in the long run.

Additional Resources

While you should always follow the steps outlined above, they do not represent the complete picture. We have provided a wide variety of online resources that can help you flush out your HR needs and develop an effective human resources plan.

Visit our Free HR Resources Page to find a variety of documents that can help you manage and improve your existing HR systems and strategies.

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