human resource business plan sample

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Management and Human Resources Business Plans

The management portion of your business plan, the hr portion of your business plan, frequently asked questions (faqs).

As a startup, it’s never easy to come up with a business plan, let alone the management and human resources sections of a business plan. Despite that, it’s important that you start your business plan for human resources as soon as possible. Doing so gives your management goals a plan that will guide you and keep your business on track as it grows. 

The key components of your human resources business plan should include your organizational structure, the philosophy and needs of your HR department, the number of employees you want to hire, how you plan to manage them, and all the estimated costs related with personnel.

You’ll want to start your HR business plan by outlining your own managerial experience and skills as well as those of your team. Highlight the roles of each member of your team, and any particular areas of strength or deficiency in your personnel lineup. For example, your HR team may be strong in compliance and conflict resolution but weak in hiring. 

Don't worry if you don’t have a complete team in place when you write your HR business plan. Simply use this section to outline the organizational structure along with job descriptions, how you plan to recruit key team members, and what their responsibilities will be.

This section should look like a pyramid with you at the top and will likely have lateral positions. Be as specific as possible when defining an employee's responsibilities because this is what will drive your business.

Do You Need an HR Manager?

If you’re a solo practitioner, you may not think of including an HR manager in your management business plan. However, if you expect to hire non-managerial employees (such as salespeople or clerical workers), you should consider recruiting a human resources manager.

If hiring a human resources manager can’t be done, consider a human resources consultant. Human resource management requires an immense amount of time and paperwork, and an experienced HR consultant will be able to quickly get your payroll and benefits program up and running, affording you more time to concentrate on growing the business. Human resource responsibilities should include:

• Handling FICA and unemployment taxes and paperwork
• Ensuring compliance with the Family and Medical Leave Act
• Staying on top of IRS filings

There are plenty of companies that offer HR management platforms tailored to each business's needs. Research these companies and be sure to include their estimated cost in your HR business plan.

When you develop the HR portion of your business plan, begin by including a brief overview of your HR strategy. Investors may be curious about how your payroll will be handled and the associated costs of administering it, as well as the type of corporate culture you plan to create. Specific items to highlight in the HR section include:

• Payscale: Show the salaries for managers and non-managers based on the market for those jobs.
• Vacation time: Describe your vacation-time policy. How much time do employees get? How quickly does it accrue? Vacation time is not required by law, but most firms offer vacation time to stay competitive and keep employees refreshed. 
• Insurance: Health insurance is a common staple benefit, although skyrocketing prices have forced many firms to cut back on this benefit. If you can’t afford a health plan, look into subsidizing one with employees paying the rest. Alternatively, inquire if a professional insurance representative can help you get a bulk rate.
• Additional benefits: Other things to consider include life insurance, a 401(k) and matching funds, bereavement leave, religious and floating holidays, and a bonus structure, if applicable.

In addition to the key elements above, it helps to have a framework from which to build your HR business plan. Here’s a basic outline that can help you get started: 

• Figure out what your human resources department would need. 
• Determine a strategy for recruiting talent.
• Formulate your hiring process. 
• Develop a training program for new employees. 
• Determine how much you want to pay your team (this is a good spot for payscale info)
• Create performance standards

It may be overwhelming to contemplate these benefits and their costs in the early stages of setting up your business, but in a competitive labor market, your firm needs to offer enough to entice qualified people and, more importantly, to keep them happy.

Consider revisiting your management and HR business plans every couple of years to see if you need to create action steps to refine your processes.

What should be in an HR business plan?

An HR business plan should include a mix of the steps you plan to take to launch an effective HR department, as well as specifics about how you plan to handle time off, insurance, and other benefits you plan to offer.

How do I write a human resources plan?

It helps to start with a simple framework. Try to break the plan down into sections: HR needs, recruitment, hiring, training, pay, and performance reviews. From there, incorporate other aspects of HR, like benefits and promotions.

U.S. Chamber of Commerce. " Does Your Small Business Need an HR Department? "

 University of Minnesota. “ Human Resources Management: 2.2 Writing the HRM Plan .”

Mecklenburg County, North Carolina. “ FY 2020-2022 Strategic Business Plan: Human Resources .”

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Blog Human Resources

6 Steps to Create a Strategic HR Plan [With Templates]

By Jessie Strongitharm , Aug 25, 2022

The backbone of any successful business is the people and processes behind it — that’s why creating a human resources (HR) plan is key. This strategic document drives your business forward by evaluating where your workforce is at, and comparing it to future needs. 

Without an HR plan, organizations can suffer from issues that would have otherwise been avoided. From productivity pitfalls to costly employee turnover, there’s no shortage of risks you can sidestep if you do human resource planning in advance. 

Not sure where to start? No worries. I’ve outlined six steps you can take to create an effective HR plan that ensures your organization is well-staffed and well-served. You’ll also find a variety of  HR templates  that you can customize in just a few clicks — no design expertise required. 

Click to jump ahead:

What is human resource planning?

• Assess employees’ current skill levels
• Forecast your labor needs based on available information
• Revisit your organizational design
• Outline how you will manage, motivate and retain talent 
• Align your workforce planning with your budget 
• Establish KPIs for your human resource planning objectives

Human resource planning is the process of considering the current and future “people needs” of an organization.

This involves evaluating an organization’s workforce structure and protocols to ensure operational goals are met, productivity stays high and future demands for labor and talent can be fulfilled. 

The result of this process is the creation of an HR plan, which typically takes the form of a written document sometimes autogenerated using HR software . These documents tend to follow a similar structure to most  strategic business plans  and are created on an annual basis, by HR managers or company leaders.

Check out the template below for an example. 

This eye-catching, one-page  HR Strategic Plan Template  offers a concise summary of your human resource planning efforts, so you can easily share info with colleagues. 

Just swap out the text and visual assets for those of your choosing in  Venngage’s editor , and you’re off to the races. 

6 steps to create a strategic HR plan

Ready to create a strategic plan for the human resources that power your business? Here are six steps to help you succeed at the human resource planning process.

1. Assess current employees’ skill levels

The first step to creating a future-forward HR plan is to assess employees’ current skill sets, and compare them to your operational needs moving forward. This will help you identify gaps and inform any hiring of new employees.

Employees’ skill levels can be assessed by reviewing their work history, hard and soft skills and professional growth over time. 

Using a matrix is a great way to understand where the skill gaps in your current workforce exist. Below is an example that describes the skills needed for different marketing roles. 

Don’t need it for marketing specifically? No worries — you can fully customize this template by swapping in your own text to examine any human resource gaps. 

Another way to assess skills is by giving employees a questionnaire they can fill out. This  Employee Competency Assessment Template  does just that.

Based on the information collected, you’ll get a sense of what positions best suit each individual, and whether any upskilling or hiring is required. 

2. Forecast your labor needs based on available information

Next in your strategic strategic HR management plan, you’ll want to consider the future. This involves accounting for any upcoming changes to your workforce, so operations can continue without error.

When forecasting labor needs, the following should be considered: 

• Planned promotions
• Upcoming retirements 
• Layoffs 
• Personnel transfers 
• Extended leaves of absence (i.e. maternity/paternity leave) 

Beyond those, it’s a good idea to assess the impact of external conditions on your labor needs during your human resource planning. For example, new technological developments may decrease the amount of employees you require to operate your business. 

3. Revisit your organizational design

Organizational design is the process of structuring the way a business operates so it can best achieve its goals. This is hugely important when it comes to your human resource planning process! 

With a clear understanding of your organization’s strategic objectives in mind, reviewing your organizational design allows you to understand the staffing requirements you’ll need to succeed at them. This means taking into account your  organizational structure  and chains of command, as well as how work gets done and the way information flows.

 From there, you’ll be able to see which departments need more team members so it can accomplish the organization’s objectives. 

An easy way to get started is by using an organizational flow chart. 

With its color coding and layout, even a new manager can quickly look at this chart to identify the people responsible for leading teams and making decisions. 

And if there are any changes, it’s easy to to reflect them in the chart itself. All you need to do is customize the text and visual assets in  Venngage’s Chart Maker  as desired. 

Not quite your style? There’s plenty of other  organizational chart templates  to choose from. 

Here’s an organizational chart that’s perfect for small businesses that have limited employees. One quick look, and you’re good to go. 

The bottom line is, no matter how big or small your business may be, you should always revisit your organizational design to optimize your workforce management and business operations. 

Related:  Types of Organizational Structure [+ Visualization Tips]

4. Outline how you will manage, motivate and retain talent 

In this day and age, it’s a known fact that companies must provide more than just a paycheque to attract and retain talent, and encourage growth. 

It’s true —  studies have shown  employees are more engaged in their work when they feel it is meaningful, fulfilling and slightly challenging. So your human resource plan should consider how to inspire such feelings, and what actions you can take to motivate employees to stay. (Hint: a strong HR training and development program is key.)  

The  talent management infographic template  below is a great way to begin. 

Using this  process chart , you can detail the steps you’ll take to retain the talent you have. Reference it as needed in your human resource planning.

 Another great way to keep staff motivated and geared towards their professional growth is by coming up with  ideas for employee development . Facilitating a company culture that champions continuous learning guarantees your team will feel supported and challenged in all the right ways.

The two employee development plan templates below will help you do just that. 

Though both templates are geared towards healthcare organizations, it’s easy to customize their content in Venngage to promote the continuous learning and development of employees in any industry.

 As a result, your employees will be able to reach their full potential, while simultaneously supporting the long-term goals of your organization. 

Related:  6 Employee Development Ideas for Efficient Training

5. Align your workforce planning with your budget 

 Let’s face it, human resources ain’t cheap.

 Meaning, if you struggle at organizing and monitoring your HR budget, you’re bound to overspend on your initiatives —and no financially savvy business wants that. 

That’s why I recommend including financial information in your HR planning process, so you can reference your budget and expenses as needed. This ensures you’ll be able to stay within range as you work towards achieving your strategic goals for human capital . 

Plus, you don’t need to use one that contains walls of text and wack-loads numbers. Check out the clean and cheery option below — it’s as easy to fill out as it is to understand. 

And if you’re looking to compare a forecasted budget to previous annual spending when strategizing your HR budget, the  Budget Comparison Infographic Template  below will help. 

The bar graph is a great  data visualization  of annual expenses, organized by category. Just add (or import) any values to Venngage’s editor, swap out the text, and you’re ready to compare with ease. 

Related:  10+ Expense Report Templates You Can Edit Easily

6. Establish KPIs for your human resource planning objectives

Measurable results are important when it comes to your HR planning processes, because they indicate whether your strategy is working or not. 

Keeping those metrics in mind, your company can make adjustments and improve upon any future plans — AKA strategize for future success in business. That’s why your human resource plan should include info re: the specific key performance indicators (KPI) you’ll be measuring. 

KPIs are established to help determine if HR strategies and plans are working. Much like those used for evaluating the performance of  marketing  or  sales plan , KPIs for human resources are measurable results that indicate an organization’s success at achieving predetermined goals.

These may take the form of headcounts, turnover rates, demographic information, time to hire and employee satisfaction scores. 

Here’s one employee satisfaction survey you can use to understand your workforce better. 

When you’re ready to organize those HR KPIs in a document, the  recruiting template  below is perfect for keeping tabs at a glance. 

Related:  10+ Customizable HR Report Templates & Examples

How do I make an HR plan? 

After you’ve collected the data you need, you’ll want to convey this info in an engaging, professional manner for easy referencing and sharing amongst colleagues. Given this, using Venngage is the best route to go. 

Here are the simple steps to help you bring an actionable HR plan to life: 

• Outline the information you would like to include in your strategic hr plan
• Pick the human resource planning templates that best suits your needs 
• Customize the templates’ text and visual assets so they speak to your organization 
• Apply your company’s brand guidelines with a few clicks using Venngage’s automated branding feature,  My Brand Kit
• Download and share as desired

Note: sharing is available free-of-charge. However, the option to download your creations and access features like  My Brand Kit and Team Collaboration  are available with a  Business plan . 

FAQ about HR plans

How long should an hr plan be .

There are no hard and fast rules when it comes to the length of an HR plan. That being said, if you’re going to share it with colleagues, you probably don’t want to create a 20+ page document. One to five pages should suffice. 

Try to be as concise as possible when relaying the facts, and use  data visualizations  wherever possible to save room.

Do I need an HR contingency plan?

In the same way creating an HR plan is a proactive move that helps your organization account for future needs, it’s a good idea to devise an HR contingency plan. This ensures there’s a back-up plan in place should your initiatives not go as expected. 

For example, if you’ve identified that you need five new hires to keep up with consumer demand, but the talent pool is lacking, a contingency plan could house suggestions for restructuring your workforce to mitigate this. 

In other words, it’s best-practice to hope for the best, but prepare for the worst. 

Is an HR plan different from an employee development plan?

Yes. While an HR plan is a strategic document describing how an organization addresses its personnel-related needs at a high-level, an  employee development plan  outlines the processes needed to help an individual achieve their professional goals.

 Even though the human resource planning process may involve outlining some employee development tactics, it is not unique to each employee as in the case of an employee development plan.

Make your HR planning processes effortless 

You don’t need a crystal ball to feel confident about your people moving forward. With a solid HR plan and strategy in place, you’ll prime your workforce — and all business endeavors — to succeed in even the most competitive of markets. 

Just remember this: human resources planning, and creating strategic business plans in general, doesn’t have to be exhausting. 

With Venngage’s huge selection of  professionally-designed templates  and easy-to-use editor, all it takes is a few minutes to produce a polished document perfect for all your needs.  Sign up for free today ! 

HR Business Plan Template: Everything You Need to Know

With an HR business plan template, you can help your company recruit new employees, retain existing employees, and guide the development of the workforce. 4 min read updated on February 01, 2023

With an HR business plan template, you can help your company recruit new employees, retain existing employees, and guide the development of the workforce so that you collectively meet your business objectives, regardless of any changes in the industry or economy.

When creating your HR business plan, you need to perform a needs analysis of your workplace to tailor the plan to your company's requirements. You'll also need to learn about the industry standards for your field to make sure you're competitive.

Without such a plan in place, your workers will feel unprepared and won't know how to work towards your company's overall goals.

Steps for Developing a Human Resources Department Business Plan

There are several steps to creating an HR business plan. They include:

• Clarify the requirements . While you might be tempted to create a detailed plan that encompasses the entire company's next 10 years, hold off. Always talk with your boss to see how much detail he or she would like in the plan. This will save you time and help streamline the process. However, there's no harm in creating your own personalized strategic plan for your specific department.
• Read through the HR job descriptions . The HR department typically has employees such as HR assistants, HR generalists, and an HR director . Read through the job descriptions for each worker in the department and see what kind of duties are missing. Brainstorm additional functions that each job role could provide to the company.
• Curate your list . Take the different functions you've brainstormed and compare them to what each member of the HR department is already doing. Are there functions you could add or subtract from each employee for more productivity? You don't have to go into detail here, but just think about how you could improve each role.
• Schedule a meeting with the executives . Before you make any changes, you'll obviously need to get input and approval from the company's executives. They may have more feedback on how the HR department can provide additional services and support the company's overall goals and mission.
• Create a feedback form . Come up with a list of questions to ask leadership about HR's role in the company and provide it to them in advance of the meeting so they have time to think it over and talk with their staff. You may even want to provide a rating and ranking format for the questions, as this will make their responses easy to understand and implement. Overall, this is a key process to understanding what management and employees want and need from the HR department.
• Look at external resources . While the internal information you're collecting is the most important, it also doesn't hurt to take a look at data from professional organizations and websites, such as the Society for Human Resource Management , The Balance , or HR Magazine . You can also ask colleagues from other local organizations for tips on creating your business plan.
• Use this information to make a plan . With your ideas, feedback from executives, and tips from external resources, you should have a clear idea of what your plan should look like. The things that are missing from the HR department should now be clear, and this should guide you on what to focus on to improve HR's contribution to the company.
• Identify goals for this year and next . While your plan can have long-term goals, keep the majority of them a little bit shorter in scope to see how things work out. This gives you the chance to reorganize and restructure if things aren't going right. Consider creating a list of accomplishments you can reach for the end of this year and into the next.

A Real Life Example

If you're seeking more guidance on how to create a successful HR business plan, look to Starbucks as an example.

As the world's largest coffee chain, Starbucks had $21.3 billion in sales in 2016.

Despite these massive numbers, Starbucks maintains the same approach to their human resources department. All of the HR planning is guided by the company's organizational strategy and brand.

Their strategy is to use specific interview techniques when hiring new employees. This lets them identify potential leaders and place them in a "New Partner Orientation and Immersion" training program. With this system, Starbucks has achieved the lowest employee turnover rate in the quick-service restaurant industry.

Starbucks also offers numerous employee perks and dedicates a lot of time to employee training through an online portal that teaches employees essential job skills.

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Human Resources Consulting Business Plan

Start your own human resources consulting business plan

Human Capital Maximizers

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

Human Capital Maximizers (HCM) is a human resource consulting company located in Portland, Oregon.  HCM has expertise in a wide range of HR areas and is targeting the emerging company market.  HCM will offer this market the ability to compensate client’s employees with stock options from their company.  This will be especially appealing to many start-up companies that find capital scarce. 

Major Adversity, the founder and owner will be leveraging his past and current personal/professional relationships to generate business for Human Capital Maximizers.  Major will be the sole employee until month six when he will be hiring a human resource specialist/manager to help out with the consulting.  Human Capital Maximizers will show increasing profitability over the next three years.

1.1 Keys to Success

The keys to success are to provide a needed service while providing a flexible means of compensation.

1.2 Mission

Human Capital Maximizers’ mission is to provide human resource consulting for emerging companies.  We exist to attract and maintain customers.  When we adhere to this maxim, everything else will fall into place.  Our services will exceed the expectations of our customers.

1.3 Objectives

The objectives for the first three years of operation include:

• To create a service-based company whose primary goal is to exceed customer’s expectations.
• To increase our number of clients served by 20% per year through superior performance and word-of-mouth referrals.
• To develop a sustainable start-up consultancy firm that can survive off its own cash flow and has significant equity holdings in emerging companies.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Human Capital Maximizers is a HR consultancy firm serving the Portland area market. HCM will be set up as an Oregon Corporation owned by Major Adversity and will focus on emerging companies.

2.1 Company Ownership

Human Capital Maximizers is a privately held Oregon corporation founded and owned by Major Adversity.

2.2 Start-up Summary

Human Capital Maximizers will incur the following start-up expenses:

• Two desks, two chairs, and two lockable file cabinets.
• Two computer systems including a CD-RW, printer and a third computer to serve as a server.
• DSL router and DSL connections.
• Two telephones, fax machine, and copier.

Please note that the following items which are considered assets to be used for more than a year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line depreciation method.

Human Capital Maximizers provides human resource consulting to emerging companies in the Portland/Vancouver market.   Human Capital Maximizers will charge a below market rate and take stock options in the company.  Human Capital Maximizers will  provide consulting for the following service areas:

• Human resource management.
• Organizational management.
• Professional development.
• Employee relations.
• Labor relations.
• Benefits and compensation.
• HR policy and procedure.
• Executive search.
• Sexual harassment.
• Position classification.
• Personnel management systems.
• Performance evaluations.

The pricing structure will either be an hourly rate or a per project fee.  These options will be settled on in negotiation with the client.  In general, Human Capital Maximizers is willing to be as flexible as possible.

Market Analysis Summary how to do a market analysis for your business plan.">

Emerging companies will be the target market for several reasons:

• They are in need of HR services as they are growing rapidly.
• They often do not have a large enough in-house solution as they are increasing in size.
• Capital is a scarce resource for emerging companies so the ability to accept stock options in replace of cash is appealing.

The emerging company market can be further broken down into two categories, technology and non-technology.  The significance of the breakdown is not that significant because many of the networking activities are occurring in settings that do not differentiate between technology and non-technology.

4.1 Market Segmentation

Human Capital Maximizers market can be segmented into two different groups, emerging high-tech companies and emerging non-high tech companies.  The emerging high-tech companies are going to be the larger of the two segments.  Even with the Internet bubble bursting within the last year, there are still many different emerging high-tech companies proliferating.  This is evidenced by the Business Journal of Portland which in their annual list of fastest growing companies for this year, 18 of the top 25 were technology companies.

There are also non-technology companies that are emerging in the Portland area and Human Capital Maximizers will be able to serve them as well.

4.2 Target Market Segment Strategy

Human Capital Maximizers’ two markets will be primarily targeted through networking activities.  Some networking will be conducted through the Oregon Entrepreneur Association, an association that supports entrepreneurial ventures in the local area.   This organization has monthly meetings that are in round-table format, allowing members to socialize.

Human Capital Maximizers will also be networking from personal/professional contacts that Major has developed professionally in the last five years in the HR/start-up industry.  HCM will also be relying on word of mouth to grow its customer base.

Strategy and Implementation Summary

Human Capital Maximizers will use their competitive edge of compensation flexibility to attract emerging companies.  This competitive advantage is especially valuable to emerging companies who are typically struggling to find enough capital to grow their business.  Accepting stock options as compensation is useful because equity is one thing these companies have lots of (that is of course if they haven’t given it all away to the Venture Capitalists).

5.1 Milestones

Human Capital Maximizers will have several milestones early on:

• Business plan completion.  This will be done as a roadmap for the organization.  This will be an indispensable tool for the ongoing performance and improvement of the company.
• Set up office.
• HCM’s first five customers.
• Profitability.

5.2 Sales Strategy

As stated earlier, the marketing and sales will be done primarily through networking.  This means the bulk of the leads will have been developed through a personal/professional relationship that Major has developed either in his previous professional work or through his activities with the Oregon Entrepreneurs Association and other similar associations.  The sales spiel will be based on Human Capital Maximizers experience in the field as well as their flexibility for compensation.  Major will be able to explain to the prospective client the areas that he has experience in and the solutions that he can offer. 

Major will also be able to speak about Human Capital Maximizers ability to accept options in lieu of cash.  This will be appealing to companies, particularly in the current capital market which is quite scarce.  Since capital is more difficult to come by now than in the last few years, emerging companies will be excited about this option.

5.2.1 Sales Forecast

The first month will be used to set up the office.  Additionally, during the first month Major will be working hard on developing contracts. The second month will see some activity, but it will not be until month six when business will be picking up at a higher rate.  Sales will continue to grow through year three.

5.3 Competitive Edge

Human Capital Maximizers competitive edge is their flexibility for compensation.  Most or all other companies require compensation to be in the form of cash, for them cash is king.  Human Capital Maximizers is able to take stock options in lieu of some cash.  While Human Capital Maximizers needs some cash to float the business, it can take up to 75% of its fees in equity.  Human Capital Maximizers is able to do this because they have secured an office space that is low in cost, helping them reduce their overhead.  In addition, Major’s wife contributes a significant portion of money to the household so Major is not in need of a lot of monthly compensation.  This allows him to accept options as payment in hopes of an upside to come several years for now. (Please note the the HR industry, unlike law firms and accounting firms do not run into conflict of interests situations regarding receiving equity as compensation.)

Web Plan Summary

The website will be used as a resource that prospective companies can view to gain more information about the company.  In essence it is Human Capital Maximizers’ brochure.  On the site there will be information about the management of the company and corresponding bios indicating all of their experience.  Also on the website will be a list of present and past clients and information regarding Human Capital Maximizers’ fee structure and willingness to accept stakes of option.

6.1 Website Marketing Strategy

The marketing of the website will consist of submitting it to the popular search engines.  The website will be used more as a information tool that prospective companies can be sent to for more information about Human Capital Maximizers as opposed to marketing the website in order for the website to develop new leads.

6.2 Development Requirements

The development requirements will entail hiring an individual (preferably a student for cost saving purposes) to develop and produce the site.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

Major Adversity, the founder and owner received his undergraduate degree in marketing from Reed College.  After completing college Major recognized that he would eventually need to go to graduate school but was not ready to yet. 

Major worked in a large bicycle store for four years after college.  Major started out as a mechanic but quickly moved up to manager where he was responsible for much of the operation.  Some of the new responsibilities that Major enjoyed was the interviewing, selection & hiring, compensation, and employee relations.  After fours years in the bike shop Major was looking for a new challenge so he entered the University of Portland to pursue his MBA. 

Major received his MBA within two years and went to work for Nike out of school in their HR department.  After a year and half Major left Nike to work for a HR consultancy boutique that worked primarily with technology companies, many of them start ups.  Major enjoyed this thoroughly because of the dynamic environment that his clients worked in.  Major stayed with this firm for a total of four years.  

Toward the end of Major’s four years he got married and his wife, as a professional, was contributing large amounts of salary to the household.  This led Major to consider opening his own HR consultancy because he would be able to undertake some risk since the household was supported to a large degree by his wife.  Additionally, Major was could consider taking equity as compensation because a monthly salary was not a necessity.

7.1 Personnel Plan

Major will work full time for Human Capital Maximizers.  By month six Major will have developed more work than he will be able to manage himself and he will hire an additional HR consultant to help him out.  The employee will receive a straight salary and will have no future equity options in the client’s companies.  This employee will be given HR projects and will do the research and sometimes present the findings to the client, other times will allow Major to present to the client.

Financial Plan investor-ready personnel plan .">

The following sections will outline important financial information. Please note that the stock options granted in lieu of compensation are not entered into the financial plan as they are not yet of value.  Upon exercising the options there will be tax consequences (because one of the realizing events has occurred) as well as assets to be accounted for.

8.1 Important Assumptions

The following table details important financial assumptions.

8.2 Break-even Analysis

The Break-even Analysis is shown below.

8.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

8.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

8.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

8.6 Business Ratios

The following table outlines some of the more important ratios from the Management Consulting Resources industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 8742.

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Every success story starts with a plan. Using this template, you can help flesh out a business plan for your HR function with: 

Best practices for HR business partnerships 

A helpful template to realise your people team’s goals

Tangible ways to action and activate an HR strategy

The Easy Guide to Human Resource Planning with Tools & Templates

Updated on: 23 June 2022

It’s no secret that the key to the continued smooth operation of an organization is its employees – well, the right kind of skillful employees doing their job right. And the way to get that kind of employee working in your organization can only be made possible through proper human resource planning software . 

In this post, we have simplified the human resource process for you by breaking it down into four steps and providing you with ready-made templates to immediately execute those tasks.

What is Human Resource Planning 

Human resource planning is the process by which organizations assess the current human resources, forecast future requirements or necessities, identify the gaps and come up with a plan to fill them. 

Basically, human resource planning, also known as workforce planning and manpower planning, helps you ensure that you have the right number of people with relevant skills in the right kind of job position at the right time.   

Importance of human resource planning 

Human resource planning plays a major role in making sure that the necessary skills are made available to the organization whenever needed to meet its strategic goals. In addition, there are several more important reasons why human resource planning is crucial to an organization. 

• It helps make sure that the existing manpower is being used optimally 
• It supports achieving the organization’s strategic goals and objectives by ensuring that the right kind of people are hired to fulfill the demand for labor in a timely manner
• It provides information necessary to carry out other HR functions such as recruitment, selection, promotion, training and development , etc. and define HR policies
• It helps the organization adapt to the changes in the environment caused by competition, technology, government policies, etc. that may result in a need for new employees, new skills, etc.  
• It helps identify labor requirements needed to successfully implement expansion and diversification plans 
• It also assists with anticipating deficiencies or surpluses in manpower and take the necessary steps to handle the situation   
• It helps develop career plans for individual employees and determine the training and development they need

4 Steps in the Human Resource Planning Process 

There are 4 broad steps involved in the human resource planning process. 

Step 1: Identify the current supply of human resources   

The planning process starts by analyzing the current labor pool. Identify the strengths and weaknesses of your organization with regard to the number of employees, their skills, experiences, qualifications, positions, performance levels, age, benefits, salary levels, languages spoken, prior employment, etc. 

There are several ways you can go about this step. 

• Refer to the past performance reviews
• Gather data from your human resource information system
• Talk to the department heads to get an idea about the employees working under them
• Ask the employees themselves with a questionnaire 
• Get employees to do a self-evaluation of themselves with a SWOT analysis

Once you have collected an abundance of information on current employees, transfer them to a skills inventory report . A visual template for a skills inventory that is easier to refer to and understand is given below.

Step 2: Forecast future demand for human resources

This step requires you to understand the future goals of the organization first, as they would have a significant impact on the future human resource demands. 

Prior to determining the future needs, you also need to consider factors such as employee turnover rates, market or industry trends, technological advances that will help automate processes, retirements, promotions, layoffs, etc. 

Step 3: Analyze the gap between supply and demand for labor

Now that you have clarified what skills are available in your inventory and which you will need for the future, you can clearly see the gaps that exist.

Can the current supply of employees in the organization help fulfill future requirements?

Will you have to offer training and development programs to upgrade the current employees to meet company objectives?

If this is not sufficient, then you will have to recruit new employees with relevant skill sets to match the demand for manpower in the future. 

It’s important that you maintain the balance between demand and supply in human resource planning. 

Step 4: Develop and implement the plan to meet the gaps 

Then comes developing an action plan .

If there’s a deficit of employees, you can spend your efforts on hiring new employees, training existing ones, outsourcing or interdepartmental transfers.

On the other hand, if there’s a surplus of employees, you may need to consider layoff, voluntary retirement schemes, transfers, etc. 

Once a plan is devised, it should be integrated with the overall strategy of the organization. And it’s important to monitor the plan and evaluate its effectiveness throughout time.

Human Resource Planning Tools

You can use these tools throughout the different steps of the workforce planning process. They can assist you in analyzing the capability of your current staff, and determine future needs. The templates provided are editable online; simply click on the template to edit it online. 

SWOT Analysis 

SWOT stands for strengths, weaknesses, opportunities, and threats. It can be used as a tool for self-evaluation by individual employees, or as a strategic tool to assess the current state of the organization. 

Strengths and weaknesses are the factors that are internal. For example, a strength of your organization could be the presence of skilled employees, but a weakness could be the insufficient numbers of skilled employees. 

Opportunities and threats are external factors. For example, the availability of skilled employees in the market could be a great opportunity for you if you are hiring. On the other hand, your competitor poaching your employees with better salaries could pose a threat to you.  

 The SWOT analysis is one of the most popular tools used during a situation analysis. Some other situation analysis tools you can use with manpower planning are described in our guide to situation analysis . 

Organizational Chart 

An organizational chart is a visual representation of the hierarchy/ structure of an organization. It also highlights reporting relationships between employees, their roles and responsibilities. In human resource planning, it can be used in a number of ways,

• To record information about current employee roles, responsibilities, skills, experiences, etc. You can also add additional information such as their educational qualifications, and demographical data. This will help you quickly identify the right personnel for the job. 
• To create a roadmap of the staffing needs. You can mark labor deficiencies and surplusses on your company organizational chart as well.

RACI Matrix 

This is a chart, project managers use to assign roles and responsibilities to tasks in a project. It highlights who should be responsible, accountable, consulted and informed during a project.

9 Box Grid 

The 9 box grid, also known as the performance-potential matrix, is widely used in employee development and succession planning. It helps evaluate your existing employees against their current performance and their future potential performance.  

Rating your employees with the help of the 9 box grid helps you identify strong employees and those who are falling behind.

Scenario Planning 

There are many scenarios, like technological advancements, natural disasters, political or economic changes that could drastically alter the future direction of your company. Ordinarily, you may not see them coming or plan for them. 

By incorporating scenario planning in your strategic planning process, you can identify these different future scenarios, discuss how they will affect your organization and take precautionary measures.

You can incorporate scenario planning with human resource planning by examining scenarios that involve your changing future labor requirements. 

Refer to our resource on scenario planning to learn about this tool in more detail. 

Replacement Chart

This is a diagram that is similar to the organizational chart . It is used to identify potential candidates who can replace an employee who is retiring, transferring, etc. Individual replacement charts can be developed for each significant position in a company along with potential replacements.

Any Tips for Improving Manpower Planning? 

In this post, we’ve basically covered everything you need to know about human resource planning , especially if you are a newbie. And we believe the templates provided will help you kickstart your project. 

Already an expert in workforce planning? Do share the tips on tools and processes you swear by in the comments section below.

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How to Write a Human Resource Plan

If your business is to succeed and grow, you need to ensure that you dedicate the time and effort required to develop a comprehensive human resources strategy. An important component of any successful human resources strategy is writing a detailed human resource plan.

If you are unsure how to write a human resource plan or unclear about the difference between human resource planning and a human resources strategy, you have come to the right place!

We start by clearly explaining what the difference is between HR planning and an HR strategy. From there, we describe how a business plan fits in with your overall business strategy and outline the items you should address when you write your own human resource plan.

What is the Difference Between an HR Strategy and an HR Plan?

A Human Resource Strategy: A human resource strategy outlines the long-term direction of a business and how it will achieve those aims from a human resources perspective. It takes the long-term goals of that business and ensures that the business’s human resources are moving in the appropriate direction to achieve those same goals.

A proper human resources strategy addresses talent retention and acquisition, as well as the hierarchy for that organization, succession planning, and how your existing employees will progress through it. Your strategic human resource planning should outline how your business will react to industry changes appropriately. Every business must align its overarching goals with its human resource strategy to succeed and grow.

A Human Resource Plan: Once a business has developed an overarching human resources strategy, it will need to write a human resources plan. Essentially, this document breaks down the various tasks and initiatives required to follow its human resources strategy.

The Difference: Your human resource strategy is your overarching HR goals and aims. It explains how your business aligns its HR efforts to succeed overall. On the other hand, the human resource plan is a document that lists the tasks and initiatives required to achieve the human resources strategy. It also outlines how to link the human resources strategy together with your business strategy.

Simply put, your human resource plan is a document that you will follow to make the goals set out in your human resource strategy a reality.

How Do You Develop a Human Resource Plan?

After completing a human resources strategy, it is time to write up a document that outlines how your business will follow that strategy and stick to its goals.

The following are some of the areas your human resource plan should cover:

• A detailed description of how your business will achieve the objectives outlined in your human resources strategy. This section of your human resources plan should come first. It needs to be a specific action plan that will list timelines for certain goals and objectives. You also need to include accurate budget requirements in this section of your human resources plan. If your funding does not line up with the aims of your human resources strategy, it is unlikely that it will succeed. For example, if an organizational goal of your strategic HR plan is to acquire new talent who will stay with the business long-term, your strategic objectives should address how to attract the workforce you want to hire. How will you advertise new positions, and what can you offer qualified applicants that your competitors cannot?
• How to react to the growth of the business from a human resources perspective. When you acquire a greater number of clients or customers, how will your business react? Will you hire new employees to handle the increasing workload, or will you work towards automation and upskilling your current workforce so they can handle more responsibility?
• A thorough breakdown of your business’s current capabilities, as well as a detailed forecast of your anticipated needs. What skills do your current employees possess, and what skills do you anticipate needing in the future?
• Detailed descriptions of how your business will go about acquiring new talent. This plan should give a thorough breakdown of the company’s compensation structure, its training and development system, performance appraisal, and performance management. Remember, you will not be able to hire the new talent to keep up with demand if your human resources plan is vague and incomplete. Human resources planning should also outline what you are looking for from new hires, including what traits they should have to fit into your business’s existing work culture. Recent labour shortages have made acquiring new talent more difficult than ever before. Your human resources plan should clearly state what you are looking for from new employees and how you will position yourself as an attractive employer to desirable candidates. Employee retention is also critical! Human resource planning should outline initiatives you will follow to retain the current talent you employ.
• Detailed descriptions of potential contingencies for when things do not go according to plan. Will your business be able to fulfil its payroll responsibilities during periods of hardship, or will you have to turn to external funding and layoffs? Do you have a strategic plan for outsourcing or contracting out some of the current or future roles your business needs to fill?

Final Words

The actual format your human resource plan follows does not have to be overly specific, but it is important that it is detailed and realistically describes how you will achieve the goals described within your human resources strategy.

For your business to succeed, you must consider human resources planning for every decision you make. Remember that human resource plans need to be updated regularly. While this plan should be comprehensive, you cannot be afraid to revisit it as your business grows and the market changes.

Once it is written, refer to your human resource plan regularly, as it will help ensure that your business is always moving in the right direction.

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HR Consulting Business Plan Template

Written by Dave Lavinsky

Human Resources Consulting Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their human resources consulting businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an HR consulting business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your human resources consulting business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start an HR consulting business or grow your existing business, you need to write your own business plan. A business plan will help you raise funding, if needed, and plan out the growth of your HR consulting business in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Human Resources Consulting Businesses

With regards to funding, the main sources of funding for a human resources consulting business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the lender will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings is the most common form of funding for a human resources consulting business. Personal savings and bank loans are the most common funding paths for HR consulting businesses.

Finish Your Business Plan Today!

If you want to start an HR consulting business or expand your current one, you need a business plan. Below we detail what should be included in your own business plan for an HR consulting firm.

Executive Summary

Your executive summary provides an introduction to your own business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of HR consulting business you are operating and its status. For example, are you a startup, do you have an HR consulting firm that you would like to grow, or are you operating human resources consulting firms in multiple markets?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the HR consulting industry. Discuss the type of HR consulting business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of HR consulting business you are operating.

For example, you might operate one of the following types of human resources consulting businesses:

• Human Capital Strategy : this type of business focuses on strategic matters such as corporate culture, diversity, and organization design.
• Compensation & Benefits: this type of business involves analyzing and consulting on all aspects of employee compensation, from base pay to secondary benefits, as well as pension and retirement.
• Talent Management: this type of business focuses primarily on recruitment and retention of talent, as well as on talent development.
• Professional Development: this type of business offers services ranging from leadership coaching and development to developing learning management systems.

In addition to explaining the type of HR consulting business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of websites launched, the types of sites developed, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the HR industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the HR industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your HR consulting business plan:

• How big is the human resources industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your human resources consulting business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your HR consulting business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: financial services companies, government entities, healthcare institutions, and technology companies.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of human resource consulting business you operate. Clearly, government entities would respond to different marketing promotions than technology companies, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations, and income levels of the customers you seek to serve. Because most HR consulting businesses primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other human resource consulting firms.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes more generalized management consultants or dedicated in-house HR teams.

With regards to direct competition, you want to describe the other HR consulting businesses with which you compete. Most likely, your direct competitors will be human resource consulting businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• Do they specialize in specific industries (i.e. healthcare, technology, etc.)?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide either a wider range or more specialized range of services?
• Will you offer virtual service options?
• Will you provide superior customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an human resource consulting business, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of HR consulting company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to strategic consulting, will your HR consulting business provide compliance consulting?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your company. Document your location and mention how the location will impact your success. For example, will you operate from a physical office, or will you primarily interact with clients online and/or at their place of business? In this section, discuss how your location will affect the demand for your services.

Promotions : The final part of your marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Signs and billboards
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your HR consulting business, including marketing, providing consultations, building analytics processes, developing and presenting recommendations, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sign your 50 th consulting contract, or when you hope to reach $X in revenue. It could also be when you expect to open an HR consulting business in a new location.  

Management Team

To demonstrate your HR consulting business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow your business.

Ideally you and/or your team members have direct experience in human resources and/or managing HR consulting businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in Human Resources, or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you focus on one client at a time, or will you have teams working on multiple projects at once? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an hr consulting business:

• Office build-out
• Cost of buying or leasing a company vehicle
• Cost of office supplies such as computers and software
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office lease, any notable clients you’ve served, or an overview of the services you offer.  

Putting together a business plan for your HR consulting business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert HR consulting business plan; download it to PDF to show banks and investors. You will really understand the HR industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful HR consulting business.  

HR Consulting Business Plan FAQs

What is the easiest way to complete my hr consulting business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your HR Consulting Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of HR consulting business you are operating and the status; for example, are you a startup, do you have an HR consulting business that you would like to grow, or are you operating a chain of HR consulting businesses?

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Other Helpful Business Plan Articles & Templates

HR Consulting Business plan Template

Written by Dave Lavinsky

HR Consulting Business Plan

You’ve come to the right place to create your Human Resources Consulting business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their HR Consulting businesses.

Below is a template to help you create each section of your Human Resource business plan.

Executive Summary

Business overview.

HR Solutions is a startup human resources company located in Spokane, Washington. The company is founded by Tremaine Jackson, a former human resources manager in a large retail company. Tremaine led a team of twenty human resources employees in overseeing all aspects of human resources for the employer and developed a unique application that he has decided to introduce in his new company, HR Solutions.

HR Solutions will be the comprehensive leader in human resource training, management, negotiations, and solutions-finding company in the state of Washington. They will provide everything human resource personnel need to hire and effectively onboard new employees, as well as everything needed to maintain proper records, effectively cover communication and employee relations, and become proactive about potential conflicts.

Product Offering

The following are the services that HR Solutions will provide:

• Proprietary app that creates comprehensive HR management plans
• Training to maximize personnel potential
• Assistance in compliance with laws and regulations
• Curated HR solutions to solve employee issues
• Assistance in establishing productive work environments
• Onboarding from A to Z
• “Support Cadre” for HR management personnel
• Recruitment and talent acquisition training
• Organizational process-and-procedure manual

Customer Focus

HR Solutions will target small-to-large businesses in the Spokane, Washington region. HR Solutions will also target Washington state with select online training programs and sales of the proprietary HR app. HR Solutions will target C-suite executives in Spokane.

Management Team

HR Solutions will be owned and operated by Tremaine Jackson. He recruited his former administrative assistant, Sharlene Harris, to be his Administrative Manager in HR Solutions, where she will provide oversight of all personnel and HR responsibilities within the company itself. He also recruited Mason Wright, a former associate and HR manager, to be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers.

Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Sharlene Harris holds a bachelor’s degree in Business Administration from Spokane College. She has been Tremaine’s administrative assistant for ten years and her new role will be the Administrative Manager in HR Solutions. She will provide oversight of all personnel and HR responsibilities within the company itself.

Mason Wright, a former associate and HR manager, developed a large following of loyal clients. He will be the Senior HR Advisor within the startup; he will lead the other HR managers in their roles as client-focused solution providers. His clients have indicated that they will follow him into the startup business.

Success Factors

HR Solutions will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of HR Solutions

Financial Highlights

HR Solutions is seeking $200,000 in debt financing to launch HR Solutions. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for HR Solutions.

Company Overview

Who is hr solutions.

HR Solutions is a newly established, full-service human resource company in Spokane, Washington. HR Solutions will be the most reliable, cost-effective, and effective choice for HR managers and leaders in Spokane. Certain online programs and the proprietary app will also be the most effective and productive options for HR personnel throughout the state of Washington. HR Solutions will provide a comprehensive menu of training, recruitment, personnel, solution-finding services for any company to utilize. Their full-service approach includes a comprehensive set of training, management, and solution options.

  HR Solutions will be able to provide superior HR support and solutions to every business. The team of professionals are highly qualified and experienced in onboarding, training and creating solutions for every human resource quandary. HR Solutions removes all headaches and issues of the human resource personnel and ensures clients find the best answers to all their HR needs with the outstanding customer service found at HR Solutions.

HR Solutions History

HR Solutions is owned and operated by Tremaine Jackson. Tremaine Jackson is a graduate of the University of Washington in Seattle, where he majored in Human Resource Development. He has been a human resources manager in a large retail company, where he led a team of twenty human resources employees in overseeing all aspects of human resources for his employer and he developed a unique application that he has decided to introduce in his new company, HR Solutions. Former clients and associates have indicated they will follow him when he establishes HR Solutions.

Since incorporation, HR Solutions has achieved the following milestones:

• Registered HR Solutions, LLC to transact business in the state of Washington.
• Has a contract in place for a 20,000 square foot office space within a downtown Spokane building.
• Reached out to numerous former clients and contacts to include those who will refer and recommend HR Solutions.
• Began recruiting a staff of ten HR managers and three office personnel to work at HR Solutions.

HR Solutions Services

The following will be the services HR Solutions will provide:

Industry Analysis

The human resources industry is expected to grow during the next five years to over $35 billion. The growth will be driven by an increased number of young employees who require extensive training and onboarding. The growth will be driven by an increased need for employees as the older demographic employee retires. The growth will be driven by an increase in the number of employees who are new to the U.S. and require assistance in onboarding and training. The growth will be driven by new technological advances that are not yet known. Costs will likely be reduced as new applications, such as the one created by HR Solutions, are created and introduced into the industry.

Customer Analysis

Demographic profile of target market, customer segmentation.

HR Solutions will primarily target the following customer profiles:

• Small-to-large businesses in the Spokane region
• Small-to-large businesses throughout Washington (select programs/app)
• C-suite executives in Spokane

Competitive Analysis

Direct and indirect competitors.

HR Solutions will face competition from other companies with similar business profiles. A description of each competitor company is below.

Human Resource RX

Human Resource RX was founded in 2005 by Reme and Janette Choux. As former human resource negotiators within a large firm, they developed distinctive programs that can help HR managers reduce conflicts in the workplace. In addition, the programs assist personnel in recuperating from workplace trauma and other difficulties or issues that arise in the office.

Human Resource RX, headquartered in Spokane, claims to be the “Best HR Prescription” for companies that require assistance in the form of management and oversight in trauma or difficulty. Human Resource RX also assists in compliance issues within the state of Washington, bringing expert advice into thorny issues that can potentially lead to litigation. The company has three offices throughout Washington, each with a staff of twelve “HR managers” who service local businesses. The company has maintained a good standing within the state of Washington, although there have been two separate issues of incorrect legal advice offered to clients. The matters were both brought by former clients to the court system and eventually resolved.

Premier Human Resource Associates

Premier Human Resource Associates is owned and operated by Tami Watson, an HR executive with over thirty years of experience. She is joined in the company by her daughter, Reyna Watson, a recent graduate of Spokane College, where she earned a bachelor’s degree in Communication. Premier Human Resource Associates is located in Spokane and offers an extensive onboarding and training program to support HR managers within local hospitals and medical clinics.

The bulk of services provided to HR managers includes various specific onboarding and training needs of nurses, LVNs, and other care providers. Attention is given in particular to the processes of sanitation and hygienic practices, along with the methods of communication used within these specific businesses. To date, the company has assisted in successfully onboarding over 5,000 nurses and other caregivers.

Transport HR Training

Transport HR Training was started in 1997 as a result of multiple difficult issues within the truck driving industry in Washington. In the decades since, Transport HR Training has established the full spectrum of services and products for HR associates in the long-haul and short-transport businesses. Specific practices and procedures relating to, in particular, medical issues of drivers, have been developed to smooth the HR process and align truck drivers with services they need. Transport HR Training offers a comprehensive package of services that includes negotiation in conflict, onboarding specifics, driver training, legal procedures and processes, and other truck driver-specific conditions.

Competitive Advantage

HR Solutions will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

HR Solutions will offer the unique value proposition to its clientele:

Promotions Strategy

The promotions strategy for HR Solutions is as follows:

Word of Mouth/Referrals

HR Solutions has built up an extensive list of clients and contacts over the years by providing exceptional service and expertise to their clients. Associates will follow them to their new company and help spread the word of HR Solutions.

Professional Associations and Networking

HR Solutions will extensively network throughout HR association and industry events. They will take an active role in leadership wherever invited to do so and will work to support the efforts of all associates or members.

Website/SEO Marketing

HR Solutions will fully utilize their website. The website will be well organized, informative, and list all the services that HR Solutions provides. The website will also list their contact information and list their available times to make reservations during the week. This will allow HR managers to speak with HR Solutions when most beneficial to the client. The website presence will engage SEO marketing tactics so that anytime someone types in the Google or Bing search engine “Human Resources company” or “HR near me”, HR Solutions will be listed at the top of the search results.

The pricing of HR Solutions will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for HR Solutions. Operation Functions:

• Tremaine Jackson will be the Owner and President of the company. He will oversee all staff and manage client relations. He has spent the past year recruiting the following staff:

Milestones:

HR Solutions will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the HR Solutions
• 6/1/202X – Finalize contracts for new HR Solutions clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into HR Solutions office
• 7/1/202X – HR Solutions opens its office for business

Financial Plan

Key revenue & costs.

The revenue drivers for HR Solutions are the fees they will charge to clients for their services, online training and proprietary app.

The cost drivers will be the overhead costs required in order to staff HR Solutions. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

HR Solutions is seeking $200,000 in debt financing to launch its human resources company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Clients Per Month: 40
• Average Revenue per Month: $80,000
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, human resource business plan faqs, what is a human resource business plan.

A human resource business plan is a plan to start and/or grow your human resource business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Human Resource business plan using our Human Resource Business Plan Template here .

What are the Main Types of Human Resource Businesses? 

There are a number of different kinds of human resource businesses , some examples include: Human Capital Strategy, Compensation & Benefits, Talent Management, and Professional Development.

How Do You Get Funding for Your Human Resource Business Plan?

Human Resource businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Human Resource Business?

Starting a human resource business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Human Resource Business Plan - The first step in starting a business is to create a detailed human resource business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your human resource business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your human resource business is in compliance with local laws.

3. Register Your Human Resource Business - Once you have chosen a legal structure, the next step is to register your human resource business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your human resource business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Human Resource Equipment & Supplies - In order to start your human resource business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your human resource business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Human Resource Planning Guide and Templates Every HR Team Needs

Posted 21 October, 2021 in Human Resources , Strategy

Businesses will demand more and more of Human Resources teams this year. It’s a big challenge – and opportunity – for HR Managers.

The face of the workplace has changed. Today's new normal is a hybrid workforce, operating a mixture of centralized and remote work. But more change is still to come.

Strategic priorities such as change management require dedicated focus, but key areas like employee engagement can’t be neglected. Managing the needs of the business as well as those of staff will call for careful balancing.

To juggle these conflicting demands, HR managers need a plan. Effective Human Resource planning charts the course for the year ahead. It makes it easier for organizations to recruit, retain and reinforce the strong workforce needed to achieve business goals.

In this article, we summarize the top things Human Resource Managers should focus on this year, outline the steps to creating an effective HR Plan, and share planning templates that are free for you to download.

Jump ahead:

The key HR priorities this year

How to create an effective hr plan, download human resource plan templates, 1. development and training.

The biggest priority for HR Managers, according to Gartner , is building critical skills and competencies. This is how successful organizations maximize workplace performance and maintain competitive advantage.

It’s an area where digital can really drive HR . Skills gaps and training needs can be readily identified, and customized development programs delivered – avoiding those stuffy meeting rooms and ‘one size fits all’ training.

2. Employee engagement

Engagement relies on connecting with employees. That’s why so many organizations have seen drops in engagement during times of remote work .

Staff isolated by geography experience disconnection with the company. The absence of regular in-person contact causes employees to feel more removed from their team, their managers, and the company.

Recent HR research proves using multiple communication channels to be more effective in engaging different groups of staff.

3. Change communications

Gartner reports that organizational design and change management is the second-highest priority for HR Managers. This has the potential to further destabilize already uncertain employees. Managing and communicating this is critical.

Managers and HR teams are flooded with questions from employees on the nature of these changes and how their role is affected. Strong, visible leadership is essential to maintain morale, ensure business continuity and protect the brand.

4. Recruiting and onboarding

Recruitment hasn’t ceased just because we’re working remotely. Far from it. But effective onboarding is more critical than ever.

With in-person onboarding, new hires would be welcomed to the organization with a tour of the facilities, introductions with key personnel, and shared social occasions, all designed to integrate them and make them feel comfortable.

Today’s online onboarding must replicate the benefits of in-person onboarding, but leverage the opportunities of the digital environment to create a richer, more immersive experience.

5. Health and wellbeing

Work is stressful, even under normal conditions. That’s why one million workers in the United States miss work every day due to stress. But combine this with the demands of remote working and restrictions of social isolation, and the impact on employee wellbeing is amplified.

Employees find themselves spending high amounts of screen time, taking fewer breaks, and neglecting exercise and nutrition. Left unresolved, these can seriously affect both physical wellness and psychological health.

6. Workplace culture

The importance of positive company culture is well understood. Companies with strong cultures saw a 400% increase in revenue growth. But how can strong company culture be fostered digitally?

Shared social and team-building experiences, the traditional foundation of workplace culture, are no longer possible. Without the personal touch of centralized workplaces, relationships require more effort to maintain.

There are three key stages to successfully preparing, creating, and executing your HR strategy: Plan, Implement, Track. Each stage includes information to gather and things to prepare from initial scoping through launching to staff to assessing performance.

While they can seem overwhelming at first, they are important to improve HR communication and ensure your plan achieves its objectives. A summary of these is shown here - and included in the downloadable planning checklist below.

Situation analysis – defining the current state of the business and the desired future state

HR objectives – confirming key Human Resources priorities with SMART goals

Strategic alignment – ensuring HR objectives support overall company goals

Resource requirements – summarizing what is available now and what is required to deliver to HR objectives (this could be people, capabilities, systems, or support)

Budget requirements – establishing funding requirements for additional resources in line with objectives

2. Implement

Timeline of activities – specifying the timeframe for goal achievements and setting major milestones to be met along the way

Communication plan – defining key messages to be delivered, audiences to be targeted and channels to be employed

Content creation – identifying any new process, policies, or training materials required

Plan B – confirming a contingency in the event of poor results or change in circumstances

Feedback mechanisms – introducing a way to track campaign performance, gauge employee sentiment, and identify focus areas for improvement

Regular reporting – setting a schedule to provide performance updates for staff and management

With so much for Human Resources Managers to consider when creating their plans, we've prepared some free downloadable templates to help. Access these through the form below and share them with your HR team. You'll receive:

Strategy guide   - Details on the 6 things your plan needs to succeed this year

Planning checklist   - Make sure your plan covers everything it needs to (including a plan B)

Activity schedule template   - Track all your goals and initiatives in this editable project management tool that works alongside the annual HR calendar

To get your free copy of each of these valuable resources, simply complete this form.

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More blogs by Michael Hartland

Michael Hartland is Content Marketing Manager at SnapComms - the market-leading provider of digital employee engagement solutions. Michael's most happy when writing. The beauty of language and the power of communication are his passions.

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Prepare Your Annual HR Plan for 2024

Each year, it is important to create an annual HR plan to guide your people team or human resources department. However, in 2024, it is even more important for HR departments to take into account recent changes , and develop a sound hr strategic plan to take their teams to the next level.

More important than the details of the plan itself is to make sure the company’s mission and vision are reflected within your annual HR plan for 2024. Without clear objectives and a path to achieve them, you may fall short in reaching your company’s goals.

A highly focused and clearly communicated annual HR plan helps to guarantee your HR objectives will be met.

In this article, we will cover the ins and outs of yearly HR planning and provide the key steps to reach your HR goals.

Table of Contents

What is Meant by HR Planning ?

The purpose of a human resources plan is to analyze and evaluate all the elements related to the human resources policy for the coming year.

Everything from staff dynamics, organizational structure , and working conditions to the hiring process and onboarding of new employees .

As there are many aspects of an HR annual work plan, it’s important to first understand the company environment within which you work, as this will greatly affect the HR plan you create. Once you evaluate the company environment, you can then move forward with creating a successful HR plan of action.

Prepare your annual business plan for HR in 2024 and reach all of your objectives.

Map Out Your Annual HR Plan: Evaluate the Company Environment

At the beginning of the year, companies establish a strategic plan, dependent heavily on the human resources department, where the key annual objectives are set.  In order to develop a successful annual HR plan, it’s important to take into consideration the company’s policies and procedures , as well as the employee handbook . That way, you can rest assured that the goals and plans of the company are aligned with those of HR.

To reach your HR objectives, you must first know the answers to the following questions:

What Can We Improve on From Last Year’s Annual HR Planning?

Success is simply the result of many failures and tried attempts, all put together. Identifying past struggles and using them as fuel to propel you forward is what leads to success and improvement.

What Expected Challenges Can I Include in My Yearly HR Plan?

When you know what’s coming, you can better adapt and take advantage of the changes, rather than let them take advantage of you. Consider learning about change management techniques to stay in control through the ups and downs. Analyzing the potential challenges is fundamental for preparing your team for what’s ahead. Also, knowing which changes, events and activities are taking place in the coming months, and how they will likely influence your team, allows you to better manage what lies ahead.

What Areas Within the Company Should I Plan to Improve?

Constant evaluation of the state of the company and its staff is crucial to coming up with solutions to improve. With Factorial, for example, you can create human resources reports that display a graphical vision of the company, outlining the required areas of improvement. If used correctly, these charts can also allow you to make visual conclusions about things such as the turnover rate or employee motivation.

Identifying key areas of improvement is one of the stepping stones to a successful large or small business HR plan.

As a result, reaching your yearly objectives is easy when you take the proper steps to first analyze the company’s environment and what you are working with . Clear communication between the human resources department and the company’s management is vital to creating a solid base for your annual human resources plan.

Define Your Annual HR Plan Goals & Objectives

The objectives of the company’s strategic plan are called long-term objectives . These types of objectives help measure the reach and success of the human resources plan.  Generally speaking, they can be divided into two categories:

• Explicit Objectives : Focus on attracting and retaining talent, employee motivation, and improving employee engagement. To set explicit objectives in your annual HR operating plan you have to consider employee experience, the onboarding process, career plans, etc.
• Implicit Objectives: Follow the company’s philosophy and help form the company culture. They show the power of the HR department and how it can help improve productivity. In addition, these objectives focus on the work environment and quality of life for the employees while maintaining all labor regulations.

Organize Your Annual HR Planning: Set Team Responsibilities

Once the objectives are clear, both for the company and for the human resources department, it’s time to create your HR plan by reviewing the team responsibilities. Keep in mind, a thorough analysis of what each department will do in order to contribute to achieving the 2024 HR goals is necessary before moving forward.

Following this, the first step in the HR action plan 2024, is to assign a person who will be in charge of creating and implementing the HR plan . For smaller companies, this person will probably be the CEO. In slightly larger businesses, the person responsible is normally the same one who handles all of the human resources-related tasks. Medium-sized companies will look to their HR team; with every member delegated to a specific task, each corresponding with a goal.

Human resources organizational charts are a great way to visually see who is responsible for what, and who reports to who in the company. Using this type of chart is incredibly helpful for your staff planning.  They can be also useful to ensure that the HR management to HR employee ratio is in check. Try using a free organizational chart template to have a clear picture of your company’s structure.

These charts are great for displaying the following:

• The structural hierarchy of the company : Directors, managers, intermediate profiles, employees, etc.
• The departments within the company : Marketing, sales, product, human resources, etc.
• Positions to fill : If there are any gaps in the company structure, the organizational chart will make them clear.

Annual HR Staff Planning: Identify Open Positions

Thanks to the organizational chart you can clearly see how many people you need to hire and for which positions. If you want to achieve your objectives for the coming year, you’ll need to have the right team in place.

In your HR plan you will define:

• Which positions are open – Write a detailed description of all the positions to be filled, including the corresponding department, responsibilities, functions, where they fit in the hierarchy, and their workload.
• Define the ideal profile – Here you’ll have to specify the profile of the candidate you are interested in hiring. Clearly outline the level of education you are looking for, the experience level, and the skills required. Based on this, you can decide whether to recruit from within the company if there is an employee that fits the desired profile.

Clearly defining the above details, are important steps to take in your HR plan. Therefore, allow yourself the time to study and analyze your company at each stage of the HR plan creation process.

Start Planning with a Defined HR Policy

Your updated human resources policy must meet the standards and demands of the general HR and strategic plan. The hr policy will also include guides for the HR department, including, but not limited to:

Hiring Guide

The main purpose of the hiring guide is to assist the HR manager in hiring and onboarding. This guide serves to outline the roles and responsibilities of the employees you are looking to hire. It should contain information on the types of contracts for each position as well. Also, including an HR annual training plan template in your hiring guide is beneficial.

Note: As an HR manager, you will need to decide whether the hiring process will be outsourced or handled within the company. If hiring is done from inside the company , a strategic onboarding process must be established to ensure successful recruitment and retention.

Compensation Guide

With every new contract you plan on offering, you need to state the details of each. For example, the salary amount, benefits, and economic bonuses. Make sure that what is offered in your compensation guide is in line with your overall Human Resources budget.

Workplace Satisfaction Guide Personal

Taking care of new hires is important, but don’t forget about your veteran employees. Long-term employees need to feel continually valued and supported as well. In your HR plan, you should invest part of your budget for the personal and professional development of each employee in the team.

Investing in employee wellbeing creates greater workplace satisfaction. Providing employees with the right personal development tools for success is key. Employees that feel supported display greater motivation for achieving their own goals and career aspirations.

Company Guide

Inside the HR policy, you should think about including a practical guide from the company. Contained in this guide, would be the company vision and mission, proper conduct guides, and conflict resolution codes

Build Your Annual HR Plan 2024

Now that you’ve gone through all the previous steps, you’re ready to build the best HR plan for 2024.

As you can see, creating the ideal HR plan for 2024 takes time and effort to compile . Unfortunately, a high percentage of small and medium-sized businesses simply don’t have the personnel to create a dynamic HR plan.

Save time creating your Annual HR plan with Factorial!

A solid HR plan is fundamental to achieving company goals. If you don’t have the correct tools to do the job, you’ll end up exhausting yourself creating a plan that will miss the mark in the end.

With Factorial, you can create your human resources plan for 2024 with ease. Build your organizational chart , fast and easy, and see who is in charge of what at a glance. Decide which departments need more assistance or restructuring.

Furthermore, Factorial gives you access to all kinds of human resources reports. These reports help you analyze the state of your company, allowing you to more effectively create the most successful HR plan for the coming year!

Are you looking for a little extra support to streamline your HR processes?

Simplify your HR processes with Factorial

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“Unfortunately, a high percentage of small and medium-sized businesses simply don’t have the personal to create a dynamic HR plan.”

‘personal’ should be ‘personnel’, unless I am mistaken?

A great article otherwise!

Thanks Trudy!

Post more! Seriously, I am really digging what you have written so far. I’ve scanned your blog right now for more things to read.

Thanks , this piece was indeed very useful.

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How to Develop a Human Resources Department Business Plan

What Is Management Plan in a Business Plan?

The management plan section of your business plan will give more focus on defining your management team, as well as your staff and business ownership. This section highlights the individual skill of your team and their contributions to your business and simple business plans .

Fundamentals of Human Resources Strategic Planning

• Setting the vision statement and mission statement of the company, as well as the business goals and objectives.
• Learning the executive summary of the business plan.
• Know and understand the business strategies and how these strategies can develop a company.
• Establishing the objective statement of the human resource strategic planning.

How to Create a Human Resource Department Annual Strategic Plan?

The human resource strategic plan, if organized well and properly will be the key element to the success of any business, small or big. This strategic plan should focus on how it can increase the proficiency of this area and not harming the best interest of the company and the employees.

The human resource strategic plan has four functions:

• Selection and training.  It involves finding applicants and hiring the most qualified individual for the position.
• Training and development.  Improving the skills of the employee and meeting the employee’s need.
• Benefits administration.  Providing benefits package to the employees can increase the chance of retaining them
• Employee relations.  The human resource strategic plan should focus on the maintaining safety and work-friendly environment.

How to Design and Implement an HR Strategy?

Many companies may not know this but establishing, designing, implementing an HR strategy will ensure that your company will run smoothly and efficiently. Here are the steps:

• Define the company’s vision statement.  The company’s vision statement will serve as a guide on how the HR can help the company in reaching the smart goals .
• Establish the HR department’s role.  The role of HR in the company is countless. The company must set what specific role an HR must do.
• Implement the plan.  After the strategy has been developed, the implementation plan is now ready to implement. With the help of the HR strategy, the plan can be developed to help the business improve.
• Measure the success.  The success of the strategy must be measured to make the HR strategy more effective.

Steps to Develop a Human Resources Department Business Plan

Here are the steps in developing a human resources department business plan in pdf .

• Understand what your boss needs and wants from you.  It will be painful for you to have developed a plan that the boss didn’t want or need.
• Create a list of job descriptions.  Find out if there are job descriptions your department is not performing but would value to the company if it is performed.
• Add to the list the functions that your human resources department is already performing.  You can also add those functions that you want to add or subtract.
• Consult with your fellow executives.  Get an assessment plan of their satisfaction with your services.

The Link Between Strategic Planning and Human Resource Planning

All companies have three critical resources that must be used effectively to achieve the success of the quality plan of business. These three resources are:

• The technologies used in manufacturing and producing a product
• The finances in the financial statement that is used to pay what the expense report of a company.
• And the people with skills and talents that are used achieve the work that is crucial.

With that, the company must have a business and strategic plan to manage and utilize these resources.

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Here is a free business plan sample for a hr consulting practice.

Embarking on the journey to become a human resources consultant can be both exciting and daunting.

In the following paragraphs, we will present you with a comprehensive business plan outline tailored for a human resources consulting firm.

As an aspiring consultant, you're likely aware that a robust business plan is crucial for laying the foundation of your consulting practice. It serves as a roadmap, guiding you through setting objectives, developing strategies, and establishing a clear plan of action.

To streamline your planning process, feel free to utilize our human resources consulting business plan template. Our team is also on standby to provide a complimentary review and fine-tuning of your plan.

How to draft a great business plan for your human resources consulting practice?

A good business plan for a human resources consultancy must reflect the unique aspects of the HR services industry.

To start, it is crucial to provide a comprehensive overview of the HR consultancy market. This includes current statistics and the identification of emerging trends within the industry, as illustrated in our human resources consultancy business plan template .

Your business plan should articulate your vision clearly, define your target market (such as small to medium-sized enterprises, large corporations, or startups), and establish your consultancy's unique value proposition (specialization in certain industries, bespoke HR solutions, legal compliance, etc.).

Market analysis is a key component. This requires a thorough understanding of the competitive landscape, industry trends, and the specific HR needs of potential clients.

For an HR consultancy, it is important to detail the services you intend to offer. These might include recruitment, training and development, performance management, employee relations, compliance, and strategic HR consulting. Explain how these services will address the needs and challenges of your clients.

The operational plan should outline your consultancy's structure, including the location, the team's expertise, the technology and tools you will use, and your approach to client projects.

Quality of service is paramount in HR consultancy. Emphasize your commitment to ethical standards, confidentiality, and continuous professional development to stay abreast of HR best practices and legal requirements.

Discuss your marketing and sales strategy next. How will you build your client base and maintain long-term relationships? Consider networking, partnerships, content marketing, and the role of professional associations.

Incorporating digital strategies, such as a professional website, online content, and a social media presence, is also vital in the modern marketplace.

The financial plan is another critical element. It should include your startup costs, revenue projections, operating expenses, and the point at which you expect to break even.

In an HR consultancy, it's essential to understand your service pricing structure and to manage cash flow effectively. For assistance with this, you can refer to our financial forecast for an HR consultancy .

Compared to other business plans, an HR consultancy's plan must pay special attention to professional qualifications, industry accreditation, and the development of intellectual property, such as proprietary training programs or HR tools.

A well-crafted business plan will not only help you clarify your strategy and approach but also attract clients and secure financing or investment.

Lenders and investors are looking for a solid understanding of the HR services market, realistic financial projections, and a clear plan for delivering high-quality services.

By presenting a detailed and substantiated business plan, you demonstrate your expertise and dedication to the success of your HR consultancy.

To achieve these goals while saving time, you can simply fill out our human resources consultancy business plan template .

A free example of business plan for a HR consulting practice

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a human resources consultant .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Industry overview and dynamics.

The human resources (HR) consulting industry plays a pivotal role in the modern business landscape, offering expertise in talent management, organizational development, employee relations, and compliance with labor laws.

As of recent estimates, the global HR consulting market size is valued at several billion dollars and is expected to grow steadily. This growth is driven by the increasing complexity of labor legislation, the need for talent optimization, and the strategic importance of human capital in achieving business objectives.

In the United States, there are thousands of HR consulting firms, ranging from large, multinational corporations to small, specialized boutiques, contributing significantly to the economy and employment.

The data underscores the critical function of HR consultants in supporting businesses to navigate the ever-evolving workforce landscape.

Emerging Trends

The HR consulting sector is witnessing several emerging trends that are reshaping the industry.

There is a growing emphasis on data analytics and artificial intelligence to inform talent acquisition strategies, predict employee turnover, and enhance performance management.

Diversity, equity, and inclusion (DEI) initiatives are becoming central to organizational strategies, with consultants playing a key role in implementing effective DEI programs.

The rise of remote and hybrid work models has prompted a need for new HR policies and practices to manage distributed teams effectively.

Employee well-being and mental health are also gaining prominence, with businesses seeking expert advice on creating supportive work environments.

Moreover, the gig economy and the rise of freelance work are creating new challenges and opportunities in talent management that HR consultants are uniquely positioned to address.

These trends highlight the dynamic nature of the HR consulting industry and its responsiveness to the changing needs of the workforce and businesses.

Key Success Factors

Several factors contribute to the success of an HR consulting firm.

Expertise and specialization in specific HR domains can set a consultancy apart, allowing it to offer tailored solutions and deep insights.

Building strong client relationships is essential, as trust and understanding form the foundation of effective HR advisory services.

Staying abreast of legal changes and compliance requirements ensures that clients receive up-to-date advice, protecting them from potential liabilities.

Adopting technology to streamline processes and deliver data-driven insights can enhance the value proposition of HR consultants.

Finally, the ability to adapt to industry shifts, such as changes in workforce dynamics or emerging HR technologies, is crucial for long-term sustainability and growth.

These success factors are integral to the development and prosperity of HR consulting firms in a competitive and fast-changing business environment.

The Project

Project presentation.

Our human resources consultancy project is designed to address the critical needs of businesses in managing their most valuable asset: their people. Situated in a business district or operating virtually to cater to a global clientele, this consultancy will offer a comprehensive suite of HR services, from talent acquisition and management to employee engagement, training, and development. Our services will be tailored to the unique needs of each client, ensuring that they are equipped with the best strategies and practices to manage their workforce effectively.

We will focus on delivering personalized, strategic HR solutions that enhance organizational performance and employee satisfaction.

Our consultancy aims to become a trusted partner for businesses, guiding them through the complexities of human resources management and helping them to foster a productive and positive work environment.

Value Proposition

The value proposition of our human resources consultancy is centered on providing expert, tailored HR solutions that drive business success. We understand the challenges that companies face in attracting, retaining, and developing talent in a competitive market.

Our commitment to delivering strategic HR services is designed to enhance organizational capabilities, improve employee engagement, and ensure compliance with employment laws and regulations.

We are dedicated to fostering a culture of continuous improvement and innovation in HR practices, enabling our clients to focus on their core business activities while we manage their human resources needs.

As a pillar of support for businesses, we strive to be more than just consultants; we aim to be partners in our clients' growth, contributing to the development of their human capital and the overall success of their organization.

Project Owner

The project owner is a seasoned human resources professional with a wealth of experience in various industries. With a strong background in strategic HR management and a passion for organizational development, they are well-equipped to lead a consultancy that provides effective solutions to complex HR challenges.

Armed with a deep understanding of labor laws, best practices in talent management, and employee relations, the project owner is committed to helping businesses achieve their objectives through effective people management.

With a vision of empowering businesses to maximize their human capital, the project owner is dedicated to providing innovative HR strategies and fostering a culture of excellence within the consultancy and its client organizations.

Their commitment to professional integrity and a results-driven approach makes them the driving force behind this project, aiming to elevate the standard of human resources management for businesses seeking to thrive in today's competitive landscape.

The Market Study

Market segments.

The market segments for a human resources consultancy are diverse and multifaceted.

Firstly, there are small to medium-sized enterprises (SMEs) that may not have in-house HR capabilities and require external expertise to manage their workforce effectively.

Secondly, large corporations seeking specialized HR services such as leadership development, change management, or talent acquisition strategies form another significant segment.

Startups and fast-growing companies also represent a market segment, as they often need assistance with scaling their teams and establishing robust HR processes.

Lastly, individual professionals seeking career coaching, resume building, and personal branding services can be targeted as a niche segment within the broader market.

SWOT Analysis

A SWOT analysis of the human resources consultancy business reveals several key points.

Strengths include a deep understanding of HR laws and best practices, a network of industry contacts, and the ability to offer personalized services tailored to each client's needs.

Weaknesses might encompass the challenge of staying updated with constantly evolving HR regulations and the potential for high client dependency.

Opportunities can be found in the growing trend of outsourcing HR functions, the increasing complexity of employment legislation, and the rising focus on employee well-being and development.

Threats may include intense competition from other HR consultancies and the possibility of economic downturns affecting clients' budgets for consultancy services.

Competitor Analysis

Competitor analysis in the human resources consultancy space indicates a market with both large, established firms and smaller, niche consultancies.

Direct competitors include other HR consulting firms offering a similar range of services, as well as online platforms providing automated HR solutions.

These competitors vie for clients by showcasing their expertise, client testimonials, and success stories.

Potential competitive advantages for our consultancy could be specialized knowledge in certain industries, a personalized approach to client service, and innovative solutions to HR challenges.

Understanding the unique selling propositions and weaknesses of competitors is crucial for carving out a distinct market position and ensuring client loyalty.

Competitive Advantages

Our human resources consultancy stands out due to our comprehensive approach to HR management and our commitment to delivering measurable results.

We offer a suite of services that includes not only traditional HR functions but also cutting-edge solutions like data-driven talent analytics and employee engagement strategies.

Our dedication to staying ahead of HR trends and investing in continuous professional development means that we can provide our clients with the most current and effective advice.

Moreover, our personalized service model ensures that each client receives attention tailored to their specific challenges and goals, fostering strong, long-term partnerships.

You can also read our articles about: - how to start an HR consulting practice: a complete guide - the customer segments of a HR consulting practice - the competition study for a HR consulting practice

The Strategy

Development plan.

Our three-year development plan for the human resources consultancy is designed to establish us as a leader in the HR solutions industry.

In the first year, we will concentrate on building a robust client portfolio by offering bespoke HR services and solutions tailored to the specific needs of businesses.

The second year will be focused on expanding our services to include online HR tools and resources, as well as developing training programs for HR professionals and management.

In the third year, we aim to broaden our reach by forming strategic alliances with industry associations and expanding our team to include specialized consultants in areas such as diversity and inclusion, talent acquisition, and employee wellness programs.

Throughout this period, we will uphold our dedication to excellence, client satisfaction, and staying ahead of HR trends to serve our clients effectively.

Business Model Canvas

The Business Model Canvas for our human resources consultancy targets small to medium-sized enterprises in need of professional HR services and larger corporations seeking specialized HR projects or training.

Our value proposition is delivering expert HR advice, compliance, employee development, and performance management to enhance our clients' workforce and operations.

We offer our services through direct consultancy, online platforms, and interactive workshops, utilizing our key resources such as our experienced HR professionals and our network of industry experts.

Key activities include HR audits, policy development, employee training, and legal compliance checks.

Our revenue streams are derived from consultancy fees, subscription-based online resources, and training program enrollments, while our costs are mainly associated with professional staff, marketing, and technology investments.

Access a complete and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on demonstrating the tangible benefits of professional HR services.

We aim to educate potential clients on the importance of effective HR management and the value it adds to their business. Our approach includes targeted LinkedIn campaigns, HR workshops, and thought leadership articles.

We will also establish partnerships with business networks to gain referrals and credibility.

Additionally, we plan to leverage testimonials and case studies from satisfied clients to showcase our expertise and results.

Risk Policy

The risk policy for our human resources consultancy focuses on mitigating risks associated with regulatory compliance, client confidentiality, and service quality.

We adhere to strict confidentiality agreements and data protection laws to safeguard client information. Our consultants are well-versed in employment law and stay updated on legislative changes to ensure compliance.

We maintain high service quality through continuous training and professional development of our consultants. We also have a financial management strategy to ensure stability and growth.

Professional indemnity insurance is in place to protect against potential legal claims, ensuring we can provide top-tier HR services with confidence.

Why Our Project is Viable

We are committed to establishing a human resources consultancy that addresses the evolving challenges faced by businesses in managing their human capital.

With our expertise in HR practices, dedication to client success, and adaptive service offerings, we are poised to make a significant impact in the market.

We are enthusiastic about the opportunity to enhance the operational efficiency of our clients' businesses and are prepared to adapt our strategies to meet their changing needs.

We are optimistic about the future of our human resources consultancy and the value it will bring to our clients and the industry as a whole.

You can also read our articles about: - the Business Model Canvas of a HR consulting practice - the marketing strategy for a HR consulting practice

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a human resources consultant and our financial plan for a human resources consultant .

Initial expenses for our human resources consultancy include setting up a professional office environment, investing in HR-specific software and technology, legal and compliance costs, developing a strong online presence, and engaging in networking events to establish connections with potential clients. Additionally, costs will be incurred for branding, website development, and targeted marketing strategies to reach our intended market.

Our revenue assumptions are based on a thorough market analysis of the demand for HR consulting services, taking into account the increasing complexity of employment laws and the need for specialized HR expertise among small and medium-sized enterprises (SMEs).

We anticipate a gradual increase in client acquisition, starting conservatively and expanding as our reputation as a trusted HR advisor grows.

The projected income statement reflects expected revenues from our consulting services, direct costs (such as salaries of consultants and administrative staff), and operating expenses (office rent, marketing, professional development, etc.).

This results in a forecasted net profit that is essential for assessing the long-term viability of our consultancy.

The projected balance sheet presents assets unique to our consultancy, such as office equipment, software licenses, and liabilities including any loans and anticipated operational costs.

It provides a snapshot of the financial standing of our human resources consultancy at the end of each fiscal period.

Our projected cash flow statement details the inflows and outflows of cash, enabling us to predict our financial needs at any point. This is crucial for maintaining a healthy cash balance and steering clear of liquidity issues.

The projected financing plan outlines the specific sources of funding we intend to tap into to cover our initial costs.

The working capital requirement for our consultancy will be diligently tracked to ensure we have sufficient funds to support our day-to-day activities, such as paying for office utilities, consultant salaries, and other recurring expenses.

The break-even analysis for our venture will show the level of service engagement necessary to cover all our costs, including the initial investments, and to begin generating profits.

It will signal the point at which our consultancy becomes financially sustainable.

Key performance indicators we will monitor include the client retention rate, the average revenue per consultant, the profitability margin on our services, and the return on investment to gauge the efficiency of the capital we have deployed into the business.

These metrics will assist us in measuring the financial health and overall success of our human resources consultancy.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a HR consulting practice .

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2.2 Writing the HRM Plan

Learning objective.

• Describe the steps in the development of an HRM plan.

As addressed in Section 2.1 “Strategic Planning” , the writing of an HRM strategic plan should be based on the strategic plans of the organization and of the department. Once the strategic plan is written, the HR professional can begin work on the HR plan. This is different from the strategic plan in that it is more detailed and more focused on the short term. The six parts described here are addressed in more detail in Chapter 4 “Recruitment” , Chapter 5 “Selection” , Chapter 6 “Compensation and Benefits” , Chapter 7 “Retention and Motivation” , Chapter 8 “Training and Development” , Chapter 9 “Successful Employee Communication” , Chapter 10 “Managing Employee Performance” , and Chapter 11 “Employee Assessment” .

How Would You Handle This?

Compensation Is a Touchy Subject

As the HR manager, you have access to sensitive data, such as pay information. As you are looking at pay for each employee in the marketing department, you notice that two employees with the same job title and performing the same job are earning different amounts of money. As you dig deeper, you notice the employee who has been with the company for the least amount of time is actually getting paid more than the person with longer tenure. A brief look at the performance evaluations shows they are both star performers. You determine that two different managers hired the employees, and one manager is no longer with the organization. How would you handle this?

As you can see from this figure, the company strategic plan ties into the HRM strategic plan, and from the HRM strategic plan, the HR plan can be developed.

The six parts of the HRM plan include the following:

• Determine human resource needs. This part is heavily involved with the strategic plan. What growth or decline is expected in the organization? How will this impact your workforce? What is the economic situation? What are your forecasted sales for next year?
• Determine recruiting strategy. Once you have a plan in place, it’s necessary to write down a strategy addressing how you will recruit the right people at the right time.
• Select employees. The selection process consists of the interviewing and hiring process.
• Develop training. Based on the strategic plan, what training needs are arising? Is there new software that everyone must learn? Are there problems in handling conflict? Whatever the training topics are, the HR manager should address plans to offer training in the HRM plan.
• Determine compensation. In this aspect of the HRM plan, the manager must determine pay scales and other compensation such as health care, bonuses, and other perks.
• Appraise performance. Sets of standards need to be developed so you know how to rate the performance of your employees and continue with their development.

Each chapter of this text addresses one area of the HR plan, but the next sections provide some basic knowledge of planning for each area.

Determine Human Resource Needs

The first part of an HR plan will consist of determining how many people are needed. This step involves looking at company operations over the last year and asking a lot of questions:

• Were enough people hired?
• Did you have to scramble to hire people at the last minute?
• What are the skills your current employees possess?
• What skills do your employees need to gain to keep up with technology?
• Who is retiring soon? Do you have someone to replace them?
• What are the sales forecasts? How might this affect your hiring?

These are the questions to answer in this first step of the HR plan process. As you can imagine, this cannot be done alone. Involvement of other departments, managers, and executives should take place to obtain an accurate estimate of staffing needs for now and in the future. We discuss staffing in greater detail in Chapter 4 “Recruitment” .

Many HR managers will prepare an inventory of all current employees, which includes their educational level and abilities. This gives the HR manager the big picture on what current employees can do. It can serve as a tool to develop employees’ skills and abilities, if you know where they are currently in their development. For example, by taking an inventory, you may find out that Richard is going to retire next year, but no one in his department has been identified or trained to take over his role. Keeping the inventory helps you know where gaps might exist and allows you to plan for these gaps. This topic is addressed further in Chapter 4 “Recruitment” .

HR managers will also look closely at all job components and will analyze each job. By doing this analysis, they can get a better picture of what kinds of skills are needed to perform a job successfully. Once the HR manager has performed the needs assessment and knows exactly how many people, and in what positions and time frame they need to be hired, he or she can get to work on recruiting, which is also called a staffing plan . This is addressed further in Chapter 4 “Recruitment” .

Recruitment is an important job of the HR manager. More detail is provided in Chapter 4 “Recruitment” . Knowing how many people to hire, what skills they should possess, and hiring them when the time is right are major challenges in the area of recruiting. Hiring individuals who have not only the skills to do the job but also the attitude, personality, and fit can be the biggest challenge in recruiting. Depending on the type of job you are hiring for, you might place traditional advertisements on the web or use social networking sites as an avenue. Some companies offer bonuses to employees who refer friends. No matter where you decide to recruit, it is important to keep in mind that the recruiting process should be fair and equitable and diversity should be considered. We discuss diversity in greater detail in Chapter 3 “Diversity and Multiculturalism” .

Depending on availability and time, some companies may choose to outsource their recruiting processes. For some types of high-level positions, a head hunter will be used to recruit people nationally and internationally. A head hunter is a person who specializes in matching jobs with people, and they usually work only with high-level positions. Another option is to use an agency that specializes in hiring people for a variety of positions, including temporary and permanent positions. Some companies decide to hire temporary employees because they anticipate only a short-term need, and it can be less expensive to hire someone for only a specified period of time.

No matter how it is done, recruitment is the process of obtaining résumés of people interested in the job. In our next step, we review those résumés, interview, and select the best person for the job.

After you have reviewed résumés for a position, now is the time to work toward selecting the right person for the job. Although we discuss selection in great detail in Chapter 6 “Compensation and Benefits” , it is worth a discussion here as well. Numerous studies have been done, and while they have various results, the majority of studies say it costs an average of $45,000 to hire a new manager (Herman, 1993). While this may seem exaggerated, consider the following items that contribute to the cost:

• Time to review résumés
• Time to interview candidates
• Interview expenses for candidates
• Possible travel expenses for new hire or recruiter
• Possible relocation expenses for new hire
• Additional bookkeeping, payroll, 401(k), and so forth
• Additional record keeping for government agencies
• Increased unemployment insurance costs
• Costs related to lack of productivity while new employee gets up to speed

Because it is so expensive to hire, it is important to do it right. First, résumés are reviewed and people who closely match the right skills are selected for interviews. Many organizations perform phone interviews first so they can further narrow the field. The HR manager is generally responsible for setting up the interviews and determining the interview schedule for a particular candidate. Usually, the more senior the position is, the longer the interview process takes, even up to eight weeks (Crant, 2009). After the interviews are conducted, there may be reference checks, background checks, or testing that will need to be performed before an offer is made to the new employee. HR managers are generally responsible for this aspect. Once the applicant has met all criteria, the HR manager will offer the selected person the position. At this point, salary, benefits, and vacation time may be negotiated. Compensation is the next step in HR management.

Determine Compensation

What you decide to pay people is much more difficult than it seems. This issue is covered in greater detail in Chapter 6 “Compensation and Benefits” . Pay systems must be developed that motivate employees and embody fairness to everyone working at the organization. However, organizations cannot offer every benefit and perk because budgets always have constraints. Even governmental agencies need to be concerned with compensation as part of their HR plan. For example, in 2011, Illinois State University gave salary increases of 3 percent to all faculty, despite state budget cuts in other areas. They reasoned that the pay increase was needed because of the competitive nature of hiring and retaining faculty and staff. The university president said, “Our employees have had a very good year and hopefully this is a good shot in the arm that will keep our morale high” (Pawlowski, 2011).

Determination of compensation systems is a balancing act. Compensation should be high enough to motivate current employees and attract new ones but not so high that it breaks the budget.

Nathan Rupert – Venice Beach Tightrope Walker – CC BY-NC-ND 2.0.

The process in determining the right pay for the right job can have many variables, in addition to keeping morale high. First, as we have already discussed, the organization life cycle can determine the pay strategy for the organization. The supply and demand of those skills in the market, economy, region, or area in which the business is located is a determining factor in compensation strategy. For example, a company operating in Seattle may pay higher for the same job than their division in Missoula, Montana, because the cost of living is higher in Seattle. The HR manager is always researching to ensure the pay is fair and at market value. In Chapter 6 “Compensation and Benefits” , we get into greater detail about the variety of pay systems, perks, and bonuses that can be offered. For many organizations, training is a perk. Employees can develop their skills while getting paid for it. Training is the next step in the HR planning process.

Develop Training

Once we have planned our staffing, recruited people, selected employees, and then compensated them, we want to make sure our new employees are successful. Training is covered in more detail in Chapter 8. One way we can ensure success is by training our employees in three main areas:

• Company culture. A company culture is the organization’s way of doing things. Every company does things a bit differently, and by understanding the corporate culture, the employee will be set up for success. Usually this type of training is performed at an orientation, when an employee is first hired. Topics might include how to request time off, dress codes, and processes.
• Skills needed for the job. If you work for a retail store, your employees need to know how to use the register. If you have sales staff, they need to have product knowledge to do the job. If your company uses particular software, training is needed in this area.
• Human relations skills. These are non-job-specific skills your employees need not only to do their jobs but also to make them all-around successful employees. Skills needed include communication skills and interviewing potential employees.

Perform a Performance Appraisal

The last thing an HR manager should plan is the performance appraisal. While we discuss performance appraisals in greater detail in Chapter 11 “Employee Assessment” , it is definitely worth a mention here, since it is part of the strategic plan. A performance appraisal is a method by which job performance is measured. The performance appraisal can be called many different things, such as the following:

• Employee appraisal
• Performance review
• Career development review

No matter what the name, these appraisals can be very beneficial in motivating and rewarding employees. The performance evaluation includes metrics on which the employee is measured. These metrics should be based on the job description, both of which the HR manager develops. Various types of rating systems can be used, and it’s usually up to the HR manager to develop these as well as employee evaluation forms. The HR manager also usually ensures that every manager in the organization is trained on how to fill out the evaluation forms, but more importantly, how to discuss job performance with the employee. Then the HR manager tracks the due dates of performance appraisals and sends out e-mails to those managers letting them know it is almost time to write an evaluation.

Human Resource Recall

Have you ever been given a performance evaluation? What was the process and the outcome?

Communication Is Key in Performance Evaluations

(click to see video)

Communication is imperative in any workplace, but especially when giving and receiving a performance evaluation.

Key Takeaways

• Human resource planning is a process that is part of the strategic plan. It involves addressing specific needs within the organization, based on the company’s strategic direction.
• The first step in HR planning is determining current and future human resource needs. In this step, current employees, available employees in the market, and future needs are all analyzed and developed.
• In the second step of the process, once we know how many people we will need to hire, we can begin to determine the best methods for recruiting the people we need. Sometimes an organization will use head hunters to find the best person for the job.
• After the recruiting process is finished, the HR manager will begin the selection process. This involves setting up interviews and selecting the right person for the job. This can be an expensive process, so we always want to hire the right person from the beginning.
• HR managers also need to work through compensation plans, including salary, bonus, and other benefits, such as health care. This aspect is important, since most organizations want to use compensation to attract and retain the best employees.
• The HR manager also develops training programs to ensure the people hired have the tools to be able to do their jobs successfully.
• Of the parts of HR planning, which do you think is most difficult, and why? Which would you enjoy the most, and why?
• Why is it important to plan your staffing before you start to hire people?
• What is the significance of training? Why do we need it in organizations?

Crant, J., “How Long Does an Interview Process Take?” Jobsinminneapolis.com, December 2, 2009, accessed October 28, 2010, http://www.jobsinminneapolis.com/articles/title/How-Long-Does-an-Interview-Process-Take/3500/422 .

Herman, S., Hiring Right: A Practical Guide (Thousand Oaks, CA: Sage, 1993), xv.

Pawlowski, S., “Illinois State University to Get Salary Bump,” WJBC Radio, July 11, 2011, accessed July 11, 2011, http://wjbc.com/illinois-state-university-faculty-to-get-salary-bump .

Human Resource Management Copyright © 2016 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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• Automating operations to reduce employee count.
• Enhancing the knowledge and skill levels of existing employees.

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Example of Human Resource's Business Continuity Plan

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A tornado, terrorist attack, explosion or other crisis could temporarily or permanently shut down your small business. A business continuity plan helps your company survive and recover from disasters. Paperwork, machinery and office furniture are replaceable. Employees -- your most valuable business asset -- are not. Your human resource manager or designate needs to form a people-oriented business continuity plan for handling emergencies.

Written Plan

As your organization's people expert, HR should draft its own written plan for handling workplace disruptions. The heads of finance, IT and other departments might have business continuity plans to protect accounting or computer systems, but only HR can devise a plan that's employee focused. Since companies' needs differ, a tailored plan works best. For example, your company's size and location determine the kind of evacuation procedure you should follow. If some employees work off-site, you’re going to need an all-points, emergency-alert system to keep everyone informed.

Preparation

HR business continuity plans are drawn from checklists of things to consider. The most serious concerns are preserving lives and getting treatment for seriously injured employees. HR must consider how staff should be trained to handle crises, notified of emergencies, transported to safety and cross-trained for jobs identified as "essential." Evacuation procedures should include transportation for disabled employees and account for customers and vendors visiting the work site. An effective HR plan addresses how payroll delays, office shutdowns, scheduling changes and layoffs might affect staff and how to minimize possible hardships. Keeping food and cash on hand for emergencies and designating evacuation shelters can be part of a plan.

Recordkeeping

HR maintains employees' personal files, some containing confidential or sensitive information. Medical reports, Social Security numbers, performance evaluations, disciplinary statements, references and background check results could be wiped out by a storm or terrorist attack. Duplicating these records and storing copies in a safe, off-site location could prevent a loss. Automated data can be backed up and stored in a secure remote location or Internet file.

Employees often need help coping with a disaster's aftermath. HR should look for signs of delayed reactions to stress and burnout among staff and get support and counseling for the people affected. A crisis can deflate morale, which lowers productivity. HR should monitor employees’ attitudes and levels of satisfaction and determine how well they're able to perform their jobs. Disasters often force businesses to adjust budgets and operational procedures. If so, HR might need to reassign staff or train employees for new duties. HR also might need to overhaul policies temporarily to allow distressed workers to recover or to meet payroll deadlines.

• Disaster Recovery Journal; Organizing Human Resource Issues For Business Continuity; Charles Kendell
• Continuity Insights: Organizational Crisis Management: The Human Factor

Valerie Bolden-Barrett is a writer, editor and communication consultant specializing in best business practices, public policy, personal finance and career development. She is a former senior editor of national business publications covering management and finance, employment law, human resources, career development, and workplace issues and trends.

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Example of Human Resource's Business Continuity Plan

by Steve Milano

Published on 1 Jan 2021

When an emergency hits your business, even the best insurance isn’t enough to keep your doors open after you recover. While you’re waiting to get back up to speed, you might lose enough customers to permanently damage your business. Having plans to continue your operations or get them operating sooner than later includes taking steps to make sure your personnel are able to work even before your office, plant, store or warehouse is rebuilt or refurbished.

Continuity Plan

A continuity plan consists of preparation for an interruption to your operations that might result from a fire, weather disaster, loss of power, workplace violence or other unforeseen problem that requires you to close your main place of business. Continuity plans aim to help you continue to run your business, or restart operations, as quickly as possible. These plans often include making provisions for backup supplies, equipment, power, data, workspace and staff. They include a communications program for keeping employees, suppliers, customers and the public informed about your situation.

Pre-event Planning

The key to handling an emergency is to create a plan in advance that addresses all your operational needs by providing backup methods for continuing to work. While you might not be able to operate at full capacity, you might be able to maintain your administrative functions. While planning a continuity program, human resources looks at the tasks your employees perform and evaluate if and how these can continue at a new location. If a factory burns, a company might be able to lease new space and equipment to temporarily continue operations. This might require the company to hire and train local workers to work at the new facility. If production can’t continue, office staff might be able to work from a temporary office, or from home, to continue accounting tasks, marketing work, website updates, project management and other intellectual work. Contingency planning includes the offsite backup of all employee data and files that employees will need to work from a new or temporary location.

Event Management

HR must next create procedures for managing the company’s work force in the immediate stages of an interruption. HR first must ensure the safety of the company’s employees. This includes the orderly and safe evacuation of all staff during on-site emergencies and accounting for the whereabouts of employees, such as during a weather emergency or power outage. Then HR can begin directing employees' activities. Some employees will be idle until physical locations are reopened or new ones are prepared, other workers might be laid off or furloughed while others will receive directions for virtual or off-site work. HR will stay in touch with executive management during the beginning of a crisis and let employees know how the problem is unfolding and what it means to them. If employees receive paychecks at their place of work, HR will communicate how the company will pay employees and manage benefits during the interruption.

Communications and Data Access

Communication is critical during an emergency or significant interruption of business activities, and one of HR’s main roles during a continuity initiative is to alert employees and direct their work orders during the crisis. HR will create and distribute instructions to employees about a backup communications system, which can include the use of blast emails or a password-protected intranet site only employees can access. During the crisis, HR will continue to keep in touch with employees and make sure they can keep in touch with their departments, suppliers and customers. It will give instructions for how and where they are to perform their work and answer questions from staff members.

An HR contingency plan might contain two relocation scenarios. The first is relocation to a temporary backup location or work-from-home situations for employees. The second is relocation back to the original workplace. Both of these relocations must be as seamless as possible, because one unproductive employee at the beginning of the chain of command can stymie all links behind her. Relocation plans can include the transportation and lodging of employees sent to new locations, giving workers access to company data from different locations and preparing a physical workspace, such as an office, store, warehouse or manufacturing facility. After moving back to the original place of business, HR works to return working conditions to normal as soon as possible.