Strategic HR Planning

Strategic HR planning links HR management directly to the strategic plan of your organization.

Most mid- to large-sized organizations have a strategic plan that guides them in successfully meeting their missions. Organizations routinely complete financial plans to ensure they achieve organizational goals. While workforce plans are not as common, they are just as important.

Even a small organization can develop a strategic plan to guide decisions about the future. Based on its overall strategic plan, your organization can develop a strategic HR plan that will allow you to make HR management decisions now to support the future direction of the organization. Strategic HR planning is also important from a budgetary point of view so that you can factor costs such as recruitment and training into your organization's operating budget.

Strategic HR management is defined as integrating human resource management strategies and systems to achieve the overall mission, strategies and success of the firm while meeting the needs of employees and other stakeholders.

(Source: Herman Schwind, Hari Das and Terry Wagar, Human Resource Management: A Strategic Approach.)

Part of strategic planning is defining your organization's mission, vision and values. Andrew Fleck Child Care Services has provided their Mission, Vision and Values as an example:

Mission – We support children and their families through high quality, inclusive services that meet their diverse developmental, early learning and child care needs

Vision – Working with the Ottawa community to build accessible multi-service support, early learning opportunities and child care for every child

Values –

  • Excellence
  • Leadership
  • Integrity
  • Accountability
  • Responsiveness
  • Inclusiveness

Your strategic HR plan should be aligned with your Mission, Vision and Values.

In this section:

Introduction to strategic HR planning

The overall purpose of strategic HR planning is to:
  • Ensure adequate human resources to meet the strategic goals and operational plans of your organization – the right people with the right skills at the right time
  • Keep up with social, economic, legislative and technological trends that impact on human resources in your area and in the sector
  • Remain flexible so that your organization can manage change if the future is different than anticipated

Strategic HR planning predicts the future HR needs of the organization after analyzing the organization's current human resources, the external labour market and the future HR environment that the organization will be operating in. The analysis of HR management issues external to the organization and developing scenarios about the future are what distinguishes strategic planning from operational planning.

The basic questions to be answered for strategic planning are:
  • Where are we going?
  • How will we develop HR strategies to successfully get there, given the circumstances?
  • What skill sets do we need?

HR Management Standard 6.1

The organization has a process to review staffing needs resulting in a plan to address those needs.

The strategic HR management planning process

The strategic HR management planning process has four steps:

  1. Assessing the current HR capacity

1. Assessing the current HR capacity

Based on the organization's strategic plan, the first step in the strategic HR planning process is to assess the current HR capacity of the organization. The knowledge, skills and abilities of your current staff need to be identified. This can be done by developing a skills inventory for each employee.

The skills inventory should go beyond the skills needed for the particular position. List all skills each employee has demonstrated. For example, recreational or volunteer activities may involve special skills that could be relevant to the organization. Education levels and certificates or additional training should also be included.

An employee's performance assessment form can be reviewed to determine if the person is ready and willing to take on more responsibility and to look at the employee's current development plans.

2. Forecasting HR requirements

The next step is to forecast HR needs for the future based on the strategic goals of the organization. Realistic forecasting of human resources involves estimating both demand and supply.

Questions to be answered include:
  • How many staff will be required to achieve the strategic goals of the organization?
  • What jobs will need to be filled?
  • What skill sets will people need?

When forecasting demands for HR, you must also assess the challenges that you will have in meeting your staffing need based on the external environment.

  • How will the external environment impact our HR needs?

3. Gap analysis

The next step is to determine the gap between where your organization wants to be in the future and where you are now. The gap analysis includes identifying the number of staff and the skills and abilities required in the future in comparison to the current situation. You should also look at all your organization's HR management practices to identify those that could be improved or new practices needed to support the organization's capacity to move forward.

Questions to be answered include:
  • What new jobs will we need?
  • What new skills will be required?
  • Do our present employees have the required skills?
  • Are employees currently in positions that use their strengths?
  • Do we have enough managers/supervisors?
  • Are current HR management practices adequate for future needs?

4. Developing HR strategies to support organizational strategies

There are five HR strategies for meeting your organization's future needs:

  1. Training and development strategies
  2. Recruitment strategies
  3. Outsourcing strategies
  4. Collaboration strategies
  5. Restructuring strategies

1. Training and development strategies

These strategies include:
  • Providing staff with training to take on new roles
  • Providing current staff with development opportunities to prepare them for future jobs in your organization

Training and development needs can be met in a variety of ways. One approach is for the employer to pay for employees to upgrade their skills. This may involve sending the employee to take courses or certificates, or it may be accomplished through on-the-job training. Many training and development needs can be met through cost effective techniques.

2. Recruitment strategies

These strategies include:
  • Recruiting new staff with the skill and abilities that your organization will need in the future
  • Considering all the available options for strategically promoting job openings and encouraging suitable candidates to apply

Each time you recruit you should be looking at the requirements from a strategic perspective. For example, if your organization has several supervisors that are nearing retirement age, your recruitment strategy should include recruiting staff with the ability to assume a supervisory role in the near future.

3. Outsourcing strategies

These strategies include:
  • Using external individuals or organizations to complete some tasks

Many organizations look outside their own staff pool and contract for certain skills. This is particularly helpful for accomplishing specific, specialized tasks that don't require ongoing full-time work.

Some organizations outsource HR activities, project work or bookkeeping. For example, payroll may be done by an external organization rather than a staff person, a short-term project may be done using a consultant, or specific expertise such as legal advice may be purchased from an outside source.

When deciding to outsource to an individual, ensure you are not mistakenly calling an employee a consultant. This is illegal and can have serious financial implications for your organization. To understand the differences between employees and self-employed people, visit the Canada Revenue Agency's website.

Each outsourcing decision has implications for meeting the organization's goals and should therefore be carefully assessed.

4. Collaboration strategies

The strategic HR planning process may lead to indirect strategies that go beyond your organization. By collaborating with other organizations you may have better success at dealing with a shortage of certain skills.

Examples of collaboration include:
  • Working together to influence the types of courses offered by educational institutions
  • Working with other organizations to prepare future leaders by sharing in the development of promising individuals
  • Sharing the costs of training for groups of employees
  • Allowing employees to visit other organizations to gain skills and insight

5. Restructuring strategies

If your assessment indicates that there is an oversupply of skills, there are a variety of options open to assist in the adjustment.

These strategies include:
  • Reducing staff either by termination or attrition
  • Regrouping tasks to create well designed jobs
  • Reorganizing work units to be more efficient

Termination of workers gives immediate results. Generally, there will be costs associated with this approach depending on your employment agreements. Notice periods are guaranteed in all provinces. Be sure to review the Employment and Labour Standards in your province or territory to ensure that you are compliant with the legislation.

Termination packages are governed by case law as well as by employment standards legislation (which only states the bare minimum to be paid).  Consult with a lawyer to determine the best approach to termination packages.

Attrition – not replacing employees when they leave – is another way to reduce staff. The viability of this option depends on how urgently you need to reduce staff. It will mean that jobs performed in the organization will have to be reorganized so that essential work of the departing employee is covered. Careful assessment of the reorganized workloads of remaining employees should include an analysis of whether or not their new workloads will result in improved outcomes.

It is important to consider current labour market trends (e.g., the looming skills shortage as baby boomers begin to retire) because there may be longer-term consequences if you let staff go.

Sometimes existing workers may be willing to voluntarily reduce their hours, especially if the situation is temporary. Job sharing may be another option. The key to success is to ensure that employees are satisfied with the arrangement, that they confirm agreement to the new arrangement in writing, and that it meets the needs of the employer. Excellent communication is a prerequisite for success.

Your analysis may tell you that your organization may have more resources in some areas than others. This calls for a redeployment of workers to the area of shortage. The training needs of the transferred workers need to be taken into account.

Documenting the strategic HR plan

Once the strategies for HR in your organization have been developed they should be documented in an HR plan. This is a brief document that states the key assumptions and the resulting strategies along with who has responsibility for the strategies and the timelines for implementation.

Implementing the strategic HR plan

Once the HR strategic plan is complete the next step is to implement it.

Agreement with the plan

Ensure that the board chair, executive director and senior managers agree with the strategic HR plan. It may seem like a redundant step if everyone has been involved all the way along, but it's always good to get final confirmation.


The strategic HR plan needs to be communicated throughout the organization. Your communication should include:
  • How the plan ties to the organization's overall strategic plan
  • What changes in HR management policies, practices and activities will be made to support the strategic plan
  • How any changes in HR management will impact on staff, including a timeframe if appropriate
  • How each staff member can contribute to the plan
  • How staff will be supported through any changes
  • How the organization will be different in the future

It is impossible to communicate too much (but all too easy to communicate too little), especially when changes involve people. However, the amount of detail should vary depending upon the audience.

Legislation and mandate

Ensure that the actions you are considering are compliant with existing laws, regulations and the constitution and bylaws of your organization.

To review laws relating to employment, visit the HR Toolkit section on Employment Legislation and Standards.

Organizational needs

Whether you are increasing or reducing the number of employees, there are implications for space and equipment, as well as existing resources such as payroll and benefit plans.


HR plans need to be updated on a regular basis. You will need to establish the information necessary to evaluate the success of the new plan. Benchmarks need to be selected and measured over time to determine if the plan is successful in achieving the desired objectives.