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What is HR’s Role in Business Planning?

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Contrary to what many think, the human resource department carries out functions beyond the scope of recruitment, compensation, discipline, and staff training in an organization. The human resource department also has a role to play in the formulation of a business plan.

This article will discuss the various roles or ways the human resource department takes part in business planning. Involving the human resource department in business planning doesn’t just help your organization grow by developing your staff. It also fosters team loyalty and increases your team strength before you even realize it’s necessary.

Before we delve into the various roles of the human resource department in business planning, let’s first understand what business planning is.

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What is Business Planning?

HR's Role in Business Planning

Business planning is the process of formulating an outline for the operations and development of a business over a period. It can be for five years, ten years, and so on. The best business plans are periodically reviewed in agreement with the changes perceived or observed in the market.

A business plan considers the elements of profit-making and the risks that can stand in the way of realizing profits from the business. It’s also important to note that business planning isn’t a process that stops, but it’s always continuing. Therefore, if you develop a business plan for your business, you will need to revisit it and modify it at a certain stage.

Modifications are done based on what’s working and not working. Comparing what’s on paper to the real-life scenario will give you more clarity on tweaking the business plan and making it more practical and applicable in reality. It also involves the creation of strategies that can speculate and prepare for certain changes that are expected.

When developing your business plan, changes to be expected and considered include business growth, changes in the market, new products, innovations in technology, and even a worldwide pandemic.

Making your human resource department part of your business plan makes preparation for future occurrences easier. Staffing is a crucial aspect of your business plan. If you want to increase your workforce, the human resource department should know exactly what kind of staff is needed, how to screen them and pick out the best applicants for employment.

In summary, business planning creates an outline for an organization with strategies from a financial, operational, and marketing point of view.

The Various Roles Carried out by HR in Business Planning

Defining the Values and Vision Statement of the Business

These are the engines of any organization. An organization without a vision and values is bound to fail. The human resource department works hand in hand with other key senior staff members in the organization to define the organization’s values and vision statement.

Having defined values and a vision statement is essential because strategies will be created with these in mind to establish the business on a solid foundation. In addition, the human resource department represents the other members of staff in the organization and their input in the definition of the organization’s values. So the defined values and vision statement of a business will encourage the motivations and behaviors of the staff members.

Aligning the human resource department’s input with the vision statement and values of the business will ensure that the full potential of the staff members is realized.

Resource Planning

While a business plan is formulated and developed by the executive staff members of the organization, it is the general staff that carries out the details in the business plan. So a business plan that’s done without considering your staff members will likely alienate members of staff.

Resource planning is a function carried out by the human resource department during the development of a business plan. It entails assigning the perfect roles to the perfect people at the perfect time. It assigns a specific role to the staff member who can handle it best. When this is done on a large scale, resource planning can guarantee maximum productivity in any organization.

Resource planning considers the following questions:

  • At what point will the organization need to recruit extra hands, and how many will be needed?
  • How long is it expected to take till extra hires are needed?
  • What skill-set are we going to need?
  • What type of staff are we going to hire?
  • Where to get them and how to get them?
  • What’s the expected staff retention rate?
  • How many staff are you expecting to lose or retain over a certain period?

During resource planning, the human resource department considers different reasons that may make the organization lose members of staff temporarily or permanently. These reasons include retirement, resignation, maternity leave, compassionate leave, and so many others.

Business Design and Development

The human resource department plays a key role in organizational development and design, an essential phase in business planning. They understand that the design and development of the organization can have an impact (negative or positive) on the motivations or behaviors of the members of staff.

The design and development of the business have two goals. The first one is establishing the processes and structures that can bring about operational effectiveness, which can maximize problem-solving abilities and minimize risks. The second one is establishing processes and structures that can enhance trust, loyalty, and motivation from staff members. This ensures cooperation among staff members and enables them to handle problems better.

The human resource department plays an essential role in defining the organizational design and development and how one part of the organizational structure affects or influences other parts.

Conclusion

This article talks about HR’s role in business planning. It starts by defining the process of business planning and the various roles HR play in business planning. These roles include the definition of values and the organization’s vision statement, resource planning, and business design and development.

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