Key Takeaways

  • A strong HR business plan aligns human resource initiatives with organizational goals, ensuring sustainable talent development and workforce productivity.
  • Core components include strategic objectives, staffing plans, budgeting, training and development programs, and metrics for evaluating HR effectiveness.
  • The planning process should be iterative and based on both internal assessments and external benchmarks.
  • Incorporating technology, compliance considerations, and future workforce trends strengthens HR strategy and planning.
  • HR business plans help companies manage workforce transitions, respond to market changes, and remain competitive.

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

Core Components of an HR Business Plan

An effective HR business plan should include several fundamental elements that serve both strategic and operational functions:

  • Executive Summary: A brief overview of the HR plan’s objectives, tied to the company's mission and growth strategies.
  • Organizational Objectives: Outline how HR initiatives support broader company goals such as expansion, innovation, or cultural change.
  • Workforce Planning: Analyze current staffing levels, forecast future talent needs, and plan for recruitment, retention, and succession.
  • Talent Acquisition Strategy: Define your approach to sourcing, attracting, and hiring the right candidates, including diversity goals and employer branding.
  • Learning and Development (L&D): Lay out employee training programs, skill gap assessments, and leadership development efforts.
  • Performance Management: Describe how you will evaluate, support, and enhance employee performance.
  • Compensation and Benefits: Include structures for salary, incentives, benefits packages, and rewards that attract and retain talent.
  • Compliance and Risk Management: Identify employment laws and regulatory requirements that affect HR operations.
  • Technology and Tools: Describe HR software, platforms, or analytics used to manage employee data, performance, and processes.
  • Metrics and KPIs: List quantifiable goals such as turnover rate, time-to-fill, training ROI, or employee engagement scores​​​.

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.

Templates and Tools for Building an HR Business Plan

To streamline the creation process, many organizations use HR business plan templates and software tools. Consider including the following in your template:

  • SWOT Analysis: Assess internal strengths and weaknesses, and external opportunities and threats related to HR.
  • HR Calendar: Schedule important milestones such as performance reviews, benefits enrollment, and training sessions.
  • Budget Tracker: Allocate funds across recruitment, training, technology, and compensation.
  • HR Dashboard: Use visualization tools to monitor key performance indicators in real time.

Popular tools like BambooHR, Gusto, and Asana can assist in executing and tracking your HR business plan efficiently.

HR Planning vs. HR Strategy: What’s the Difference?

While often used interchangeably, HR planning and HR strategy serve distinct purposes:

  • HR Planning is tactical—it focuses on forecasting labor needs, budgeting for recruitment, and ensuring compliance.
  • HR Strategy is more holistic—it aligns the people function with long-term business goals and organizational culture.

Both are crucial. A well-developed HR business plan integrates both planning (e.g., headcount projections) and strategy (e.g., talent mobility programs) to deliver sustainable results​.

Why HR Business Planning Matters in a Changing Workforce

Modern HR business plans are not static documents. They are dynamic tools that allow companies to:

  • Adapt to External Trends: Labor market shifts, evolving employee expectations, and remote work trends require flexible HR planning.
  • Support Digital Transformation: HR must prepare the workforce for digital tools and automation by investing in reskilling and change management.
  • Promote Inclusion and Equity: Strategic HR planning incorporates DEI (Diversity, Equity, and Inclusion) frameworks to ensure fair treatment and equal opportunities.
  • Enhance Employee Experience: HR strategies today prioritize employee well-being, mental health resources, and flexible benefits to boost engagement and reduce burnout.

By aligning your HR business plan with real-time developments and employee needs, your organization remains agile and competitive.

Frequently Asked Questions

  1. What is the purpose of an HR business plan?
    An HR business plan outlines how the human resources function supports overall business goals through staffing, development, compliance, and performance strategies.
  2. How often should an HR business plan be updated?
    Ideally, it should be reviewed annually or whenever major organizational changes occur, such as expansion, restructuring, or shifts in labor law.
  3. Is a small business required to have an HR business plan?
    While not legally required, even small businesses benefit from having a basic HR plan to manage hiring, compliance, and employee engagement.
  4. What’s the difference between an HR plan and HR strategy?
    An HR plan focuses on short-term operational needs, while HR strategy aligns HR practices with the company’s long-term vision.
  5. Can HR software help with business planning?
    Yes, HR management systems can assist with analytics, tracking progress, and automating parts of the HR plan such as recruitment or training schedules.

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