human resource agency business plan

Staffing Agency Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Staffing Agency Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

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Staffing Agency Business Plan FAQs

What is a staffing agency business plan.

A staffing agency business plan is a plan to start and/or grow your staffing agency 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 staffing agency business plan using our Staffing Agency Business Plan Template here .

What Are the Main Types of Staffing Agency Companies?

There are many types of staffing agency companies. Some staffing agencies will focus on a particular industry, such as clerical jobs. Other staffing agencies focus on executive job placement, while others will offer a wide range of services across all industries. Some even offer human resource functions, such as payroll, benefits administration and risk management.

What Are the Main Sources of Revenue and Expenses for a Staffing Agency Business?

The primary source of revenue for staffing agencies are the fees it charges clients to place them in a job and the revenue it receives from businesses that hire them to find and recruit suitable staff for their business.

The key expenses for a staffing agency business are the costs to market the business, as well as payroll for the support staff. Other expenses will be the rent, utilities, and overhead costs for the physical office space.

How Do You Get Funding for Your Staffing Agency Business Plan?

Staffing agency businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Angel investors and other types of capital-raising such as crowdfunding are other common funding sources. This is true for an employment agency business plan and specialities like a healthcare staffing agency business plan.

What are the Steps To Start a Staffing Agency Business?

Starting a staffing agency 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 Staffing Agency Business Plan - The first step in starting a business is to create a detailed staffing agency 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 staffing agency 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 staffing agency business is in compliance with local laws.

3. Register Your Staffing Agency Business - Once you have chosen a legal structure, the next step is to register your staffing agency 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 staffing agency 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 Staffing Agency Equipment & Supplies - In order to start your staffing agency 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 staffing agency 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. 

Learn more about how to start a successful staffing agency business:

• How to Start a Staffing Agency Business
• How to Open a Staffing Agency Business

Where Can I Get a Staffing Agency Business Plan PDF?

You can download our staffing agency business plan  PDF template here . This is a business plan template you can use in PDF format.

Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Employment Agency Business Plan

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All About People

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.">.

All About People (AAP) began out of the desire to contribute to this community, just as communities have fed All About People’s proprietor over the years. Although originally from a larger market, the proprietor realizes the need in the southern Willamette Valley for a personnel agency that fills a void left by other temporary and permanent placement agencies. AAP matches specifically skilled workers with clients, saving businesses time and money, while providing for its employees with honesty and honor. This requires a high level of communication. It means asking open-ended questions and listening, not talking. This means knowing the local market so AAP can really serve each client and employee, not just “sell” them our goods. AAP is quality service.

The long-term vision includes a number of offices throughout the southern Willamette Valley. The proprietor sees the challenge in this vision, not in the growth itself, but in training and encouraging all AAP personnel to treat each client and employee with the same care and with the same level of communication.

Managing our Growth AAP is a sole proprietorship that will convert to an S Corporation. As a new corporate entity, AAP will be treated as a start-up in this business plan. During the past couple of years the proprietor provided all services. In Year 1, the company will add a part-time office staff person and an employment specialist. In response to this growth, AAP will have a procedures manual for in-house staff to assure that the information is clear. In addition, AAP will provide employees with regular training within the divisions to assure they understand the details of the work they are doing daily. Year 2 projections include a receptionist, another employment specialist, and a field representative. In Year 3, AAP will examine the feasibility of opening a branch office in the Salem, Bend, or Medford/Ashland areas.

The Market AAP is structured like other temporary and permanent placement agencies. However, it will serve clients with needs for select, specialized professionals rather than clerical or light industrial workers. Several businesses in Portland, Oregon provide a similar service to specific groups of people, but there are none for the Willamette Valley. AAP has five divisions, targeting the following areas of expertise:

• Editors/Writers

Event Planners

Graphic Artists

• Interpreters/Translators.

Services AAP will handle recruiting, including reference checks, skills evaluation, preliminary interviewing,  and screening of all employees for its clients. AAP acts as an extension of the client’s human resource department, assuring that there is open communication between supervisor and employee, and assisting with any troubleshooting or problem solving that may be needed.

Financials The company’s start-up requirements are $55,464, of which $7,600 will be provided for by the owner’s personal investment. The rest will be obtained through loans.

We expect to be able to charge a 50% markup to our business clients. Thus, if an employee is being paid $10 per hour, we are charging the client $15 per hour. The company predicts that it will be able to produce sales of approximately $300,000 by Year 3. The company does not have any direct cost of sales; we track payments to placed individuals as regular payroll.

1.1 Objectives

AAP is structured like other temporary and permanent placement agencies. However, we serve clients with needs for select specialized professionals, rather than clerical or light industrial workers. Several businesses in Portland, Oregon provide a similar service to specific groups of people. AAP followed the model of one placement firm described below.

A contract engineering firm places temporary workers who are hardware and software engineers. Employees earn between $80- $100 per hour and approximately seven employees are placed per month. The firm recruits through its website, advertises in newspapers, magazines, and trade publications. Incentives offered to contingent workers include medical, dental, and disability insurance, 401(K), and a reference finder’s fee for placement referrals. They find their employees are 60 percent male, 40 percent female, and ages spread evenly.

AAP serves the business client by locating a professional worker, interviewing and screening that worker, setting up interviews if necessary, and administering all hiring paperwork. The company runs payroll and bills the client bi-monthly. AAP will also manage the professional, staying in close contact with the client and communicating with the worker regarding any personnel issues that may arise.

The professional worker is served with employment opportunities at no cost; pay rates that are within industry standards; and health insurance may be purchased, if a worker becomes eligible, at a group rate starting at $124/mo. AAP will pay $65/mo for any coverage chosen from the group package.

1.2 Mission

All About People’s mission is to contribute to the community by filling a need for specialized, professional, contingent workers. The company will provide workers with a safe and independent environment. It will also provide businesses with a high-caliber of employee available for project or permanent work. All About People listens to individual needs and customizes personnel solutions for both businesses and workers.

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.">

AAP is a temporary and permanent placement personnel agency working solely with skilled, professional workers and Willamette Valley businesses. AAP differs from other temporary and permanent placement agencies because of our skilled workers. The company believes that the temporary industry pays only cursory attention to providing businesses highly qualified workers for permanent and non-permanent positions. AAP has five divisions, targeting the following areas of expertise:

AAP does not provide general clerical, light industrial, engineers, accountants, nurses, or other medical technicians.

AAP does the following for each client:

• Recruiting (reference checking)
• Skills evaluation (preliminary interviewing)

AAP conducts regular evaluations: AAP checks in with the supervisor and the worker during the first week on the assignment. AAP then checks in as agreed with the client. AAP acts as an extension of the client business’ human resource department assuring that there is open communication between supervisor and employee, and assisting with any troubleshooting or problem solving that may be needed.

Prior to opening our doors, research showed support for the development of a personnel agency working solely with professional contingent workers and Willamette Valley businesses (see topic 7.3 Supporting Research).

According to the Oregon Department of Employment, Lane County has 31 temporary agency firms with 3200 individuals employed. Total employment figures for Lane County are 250,000; therefore, we support between two and four percent of the population.

Through connections in a variety of areas, AAP is able to locate qualified workers not only through advertising, but through a channel of networking. This past year has shown that qualified, willing workers are certainly available as we currently have hundreds on staff willing and able to work.

2.1 Company Ownership

AAP is a sole proprietorship that will convert to an S Corporation. As a new corporate entity, AAP will be treated as a start-up in this business plan.

The sole proprietor, Sarah Wayland, can be reached at AAP’s office, [contact information omitted in this sample plan].

2.2 Start-up Summary

Projected start-up figures are shown in the chart and table below.

The company is uniquely positioned to take advantage of this market opportunity because of the management and field expertise of the proprietor. Sarah Wayland worked in the temporary employment industry for three years with ADIA Personnel Services (now ADECCO) as Area Account Manager (in training as a branch manager): building business relationships; hiring employees; handling employee issues; working with clients during the implementation of ADIA; and opening an additional office in Beaverton, Oregon.

For one year the proprietor was a District Sales Manager at Columbia Distributing, showing a 10% increase on $3.5 million in annual sales. Managing a staff of nine in sales and customer service, she had the opportunity to delve further into hiring/firing, reviewing, incentives outside of salary, and personnel issues.

Most recently, she has spent several years as Funds and Contracts Manager at the Oregon University System; managing four grants totaling $1.5 million annually and all personal service and interagency contracts as well.

The proprietor’s most notable success was bringing the second branch of Cellular West located in Portland, Oregon, from running in the red, to breaking even within four months of its opening. She accomplished this by using motivational tools and providing the sales force with extensive training.

3.1 Products and Services Plan

Changing labor market conditions threaten the concept of full-time permanent employment.

AAP provides a complex blend of services to distinct populations. The company serves businesses through connecting them with the professional contingent work force. It also serves the worker by connecting them with businesses, at no charge, and providing benefits not often provided by other employment agencies.

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

All About People (AAP) is a local firm that costs less than a consultant or agency, provides for both project and long-term needs, and has an easy, pay and billing rate system that covers employee payroll and worker’s compensation insurance.

There are a variety of reasons why businesses may need AAP’s services:

• Spikes in work load
• Business expands into an area that in-house expertise does not yet match
• Special events
• Pregnancy leave or sabbatical
• Business increases after layoffs
• Smaller business does not yet have staff on-hand to complete extra projects.

According to economic forecasters, employment agencies and financial services are expected to have the largest industry growth over the next 25 years. The trend toward businesses cutting back on employees and their benefits due to high costs creates the demand for AAP’s services.

Just consider the time, energy, and resources an employer may spend trying to employ a person for a 20-hour task.

In addition to the already lucrative temporary industry, several companies in the Portland Metro Area place professional contingent workers, but the southern Willamette Valley is not currently being served.

The company approaches businesses primarily through networking and cold calls. Our intention is to utilize a PR agency for more coverage as soon as possible. AAP is a member of the area Chamber of Commerce and actively participates in as many activities as possible, the proprietor is a member of the Women’s Business Network, the Professional Women’s Organization, and we are in the process of connecting with the Society for Human Resource Management. Prior to start-up, AAP also surveyed several area businesses about their use of contingent workers. The company will use its website and other marketing materials that describe what services we provide and explain how simple it is to work with us.

AAP advertises in local papers and trade magazines when absolutely necessary, but most often uses the Oregon Employment Department, both community college and university campuses, and the networking groups we are members of to search out the right employee. Prior to the sole proprietor start-up, the company started recruiting by administering twenty personnel surveys and advertising locally to create a staff of qualified contingent workers. This staff will be unaffected by AAP’s corporate restructuring.

4.1 Market Segmentation

The market can be broken down into two segments: the business market segment, and the employee market segment. Both of these segments are lucrative.

Business market targets: The company targets the University of Oregon, Lane Community College, the nonprofit organizations, the publishing industry, the advertising industry, and other large businesses.

Employee market targets: Editors/writers, graphic artists, computer specialists, event planners/fundraisers, and language translators/interpreters working in the business target markets listed above, as well as any applicants with unusual skills and talents.

4.2 Service Business Analysis

These charts demonstrate the types of workers employed, the type of qualified professionals on file to work for the company, and the types of businesses who have used AAP’s services. These statistics cover the 15-month sole proprietorship period from July 1, 1998 through September 30, 1999.

Types of workers employed by or signed up with AAP

Types of employers using AAP

Each and every contact is entered into the database-either in the professionals file if they are a potential candidate, or in the contacts file if they are another type of contact. The client and jobs files utilize the contact and client numbers to automatically fill in the information from the contact or client files. This means no duplicate typing. In addition, the contacts, clients, and professional files all have follow-up sheets attached making daily follow-up easy. Simply pull the file up for that day and all calls that need to be made that day will be marked.

Searching is easy. The check boxes within each professionals file allows us to check for singular or multiple skills and experience with a click and a return.

4.2.1 Competition and Buying Patterns

First form filled out from the moment the candidate calls. Three screens constitute one file: Personal Information; Job Information; Skills. The professional and contact files have a conversation record that will allow easy follow-up with a list daily of those records needing a call.

Interview Form

Directly from the employee forms the Employment Specialist can select the appropriate interview form. This form consists of three sheets: Basic Questions; Other Information/Recommendations; and Reference Checks.

Employee Profile Sheet

From the above information, a profile sheet is generated in hard copy for the inside of each file. This is our second backup system (besides the tape drive) in case of a power outage, etc.

4.2.2 Contact Sheet

This form is used for all other contacts. From here, a contact can be turned into a client by merely typing the contact number in on the client sheet, automatically bringing in all of the information.

4.2.3 Client Sheet

The client sheet is easily created by filling in the contact number. All pertinent information is automatically entered. The client sheet has its own contact sheet attached generating a daily follow-up list. The client files can also be pulled into a handy contact list.

Strategy and Implementation Summary

AAP is completely service minded, customizing personnel packages and offering the most it can to both employers and employees. The company brokers professional workers to Willamette Valley businesses. Because we serve two distinct groups of people, both businesses and employees will be considered equally important to AAP.

The company consists of five divisions, targeting the following types of workers and needs in businesses:

Computer Division

• Computer Application Specialists
• Computer Hardware Specialists
• Computer Programmers
• Network Administrators
• Web Specialists

Editor/Writers

• Multi-lingual
• PR/Marketing
• Fundraisers
• Large and Small

Language Interpreters and Translators

• Multiple Languages
• Person-to-Person

Within these categories, we originally set up a system of single sheets on card stock and filed them in binders. Since then, an electronic database has been created by one of our professionals. With the push of a button, AAP can search for a client or an employee needed.

Businesses and employees will be able to communicate with AAP via both new technological and traditional methods. Our Web page provides information about AAP including what professional fields we serve, what clients we are working with, and what services we offer. A second-generation Web page will provide information about employees for businesses through a password-protected area. AAP forwards candidates’ resumes and other information through a variety of methods: phone, fax, personal visit, mail, and the Web page.

In August 1999 we moved the offices to the center of town. Accounting is handled electronically by the proprietor through QuickBooks, with the complex needs handled by our CPA. All payroll is generated through the payroll service, Paychex. The office is furnished with all of the technology needed to operate on a daily basis, increase market share, and serve clients.

5.1 Competitive Edge

When a business is contacted and expresses interest in contingent employees that the company can provide, the following procedures will be followed:

• Consult with client and create a follow-up plan.
• Complete the contact, client, and job sheet in the database.
• Print one of each and forward a copy of the job sheet on yellow paper to the employment specialist.
• File original sheets in the appropriate binders.
• Search for matches in the database and pull each folder that looks like it will work.
• Review that folder to assure a match.
• Call each potential candidate and discuss the job and pay to its fullest.
• Fax, e-mail, or otherwise contact client with information and/or resumes for review.
• Schedule interviews or make a decision on appropriate candidates.

5.2 Sales Strategy

When an employee seeks to work with the company, the following procedures will be followed:

• Complete the professional’s form in the database.
• While completing this sheet, screen the employee for experience levels, requiring professional experience in each arena they wish to work.
• Set up an interview with the employment specialist if the professional is qualified.
• Create a file for each employee and place all paperwork, along with a copy of the professional’s form.
• Keep in touch with the professional quarterly if nothing comes up, more often if at all possible.
• When the professional agrees to a position, they will be supplied with an employee policy manual, pieces of letterhead for invoicing, and will complete the IRS I-9 and W-4 forms prior to beginning work.

5.2.1 Sales Forecast

Our sales forecast projections are presented in the chart and table below. Three years annual projections are shown in the table.  The chart shows first year monthly forecast.  First year monthly table is included in the appendix.

5.2.2 Target Market Segment Strategy

The pay rate data will be determined by changing market factors including business demand.

Our experience shows that the following is true in regards to pay and bill rates. A “good deal” for most temporary agencies is a 50% of pay rate markup. Thus, if the pay is $10, the bill is $15. However, we have traditionally used a flat markup that seemed appropriate. Pay and bill rates generally are outlined as follows:

Editors Most editors require between $25 and $35 per hour, and our history has shown a $10 per hour markup is acceptable. One exception is in the technical arena, garnering between $45 and $55 per hour pay; again a $10 per hour markup is typical.

Writers The only writing we have done is creative for [client name omitted], and we paid $15 with a $10 markup.

Event Planners Event planners often will work for between $12.50 and $25 per hour, depending on the length of the job, requirements, and experience needed. We find a $5 per hour markup on the $12.50-$17.50 is reasonable, and a $10 per hour markup on anything over $17.50 per hour.

Fundraisers Fundraisers can start at $10 per hour (nonprofit) and go up to $20 per hour. This usually depends on client and length of assignment. Bill rate markup for nonprofits is $5 per hour, others between $7.50 and $10 per hour.

Graphic Artists Entry level beginning at $12.50 per hour, intermediate at $15 per hour, and a top of the line professional at $25 per hour. The exception may run about $50 per hour. Bill rates are between $7.50 per hour markup ($12.50-$15), and $10 markup.

Language Interpreters This is a tricky arena. Pricing depends on the language (typical/atypical) and the length of the assignment. Interpreters have been known to work for as little as $15 per hour and for as much as $35 per hour. A $10 per hour markup is acceptable.

Language Translators This division is difficult as each language and situation varies slightly. Translators tend to work by page or by word. Technical translation can be as much as $.30 per word. Other translation can be $10 per hour (an hour a page). We are unsure of markup at this time, but would suggest 50% of pay rate.

Computer Specialists:

• Application-Starting at $12.50 an hour based on Xerox experience. Markup $5 per hour.
• Programmer-Starting at $20 an hour based on AlbertIQ experience. Markup $10 per hour at a minimum. Try for $15.
• Web Designer-Entry level positions can start at $10 per hour with a markup of $5. Project work typically starts at $15 an hour, markup at least $10 per hour.
• Administration-Pay rates range between $50 and $75 per hour, with a preferred markup of $25 per hour.

When determining the bill rate, additional expense factors to remember above the pay rate are 15% employer taxes, advertising, and staff time to fill the position.

5.3 Milestones

The company has an outstanding client list and an incredible number of qualified employees available. AAP has a good reputation for providing qualified people in a timely manner.

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.">

In a variety of settings the proprietor of AAP has strong management experience. The proprietor has the skills to not only listen well, drawing out a person’s needs through open-ended questions, but also has the ability to recognize people’s strengths and weaknesses. She will draw upon this extensive successful experience in addition to the knowledge collected over a period of 18 years working professionally. Much of the “people” skills have been developed during the seven years spent in management roles. This experience, along with a varied background, supports AAP’s goals.

AAP’s objectives are threefold:

• To provide high quality, experienced, professional workers to businesses that are currently relying on the instability of word-of-mouth contacts, and are spending much of their time and resources (and, therefore, money) locating such workers;
• To provide these workers with a path by which to reach the employer without spending their own time, money, and energy finding the work; and
• To use this opportunity to make the contingent work force a better place for both the employer and the employee.

The long-term goal of the company is to franchise and/or to become multi-location, and eventually sell this business.

Management is a style, a belief, and a strategy.

In managing our clients, AAP will communicate regularly with them, setting up a schedule that meets their needs. The company will set goals for retention of clientele and strive to reach those goals by building relationships, listening to the client’s needs, and meeting those needs with a smile on our faces. We will take responsibility for our errors and the outcome.

In managing our workers, AAP will communicate regularly with them, providing them with an employee manual to minimize their confusion, and offer them the best pay and benefits possible. AAP will set goals for retention of employees and strive to reach those goals by treating each employee with respect, provide protection when appropriate, and do everything within our power to assure a healthy working environment.

This is a relationship business. AAP will manage all clients and employees through relationship building.

During 1998-99 the proprietor provided all services. In 2000 the company will add a part-time office staffer and an employment specialist. In response to this growth, we will have a procedures manual for in-house staff assuring that the information is clear. In addition, we will provide employees with regular training within the divisions to assure they understand the details of the work they are doing daily. 2001 projections include a receptionist, another employment specialist, and a field representative. In 2002 AAP will examine the feasibility of opening a branch office in the Salem, Bend, or Medford/Ashland areas.

6.1 Payroll

All About People runs its payroll twice a month. Each professional will be given a check schedule when they work with AAP. Each check covers the previous two weeks.

In order to process payroll; AAP must receive a professional’s signed invoice the Wednesday prior to payday. The invoice, must be on AAP letterhead and include: name, social security number, mailing address, dates of work completed, location worked (at home, at the client’s office), one or two sentences describing what tasks were completed, and how much time was spent each day. At the bottom there must be a place for the client to sign and date in acceptance of the work to date. The original will be submitted to AAP, the client will receive one copy, and the professional will keep a copy.

AAP is unable to provide payroll advances. If a check is lost in the mail, we must wait seven days from the date of mailing, and then if the check has not arrived we will stop the check at the bank and have one reissued.

6.2 Benefits

Because we value our employees, we have employee group health insurance available, and contribute a major portion of the monthly premium. According to the Insurance Pool Governing Board (IPGB) employees must work at least 17.5 hours per week. Employees who work intermittently or who have worked fewer than 90 calendar days are not eligible. IPGB also states that all carriers may decline to offer coverage to the business or to any employee.

Technically, All About People is employer of the professionals we place. This means that we are responsible for covering the worker’s compensation insurance, running payroll, and that we are the ones to whom each employee is responsible. We understand that this can be tricky when employee professionals are working with a client, so we want to describe the expectations of this relationship:

• If the professional doesn’t understand the work or assignment that has been given by the client, then discuss the work with the client.
• If there are issues at work, the employee should inform AAP and then speak with the client.
• If these issues continue, the employee should talk with AAP immediately.
• If the professional feels they are being harassed at work they should let AAP know immediately.
• If the employee should be being asked to perform tasks other than the original assignment, the employee should talk with AAP before beginning any tasks other than the original assignment.
• If the professional is being asked to work overtime (more than 40 hours per week), they should let us know immediately.

AAP does not guarantee either work or wages when you join us to become an AAP employee. We will, of course, strive to keep you as busy as possible. AAP is also not able to guarantee an hourly wage prior to the assignment beginning. If you work on a job, and complete the work successfully, you will be paid at the agreed rate.

This employment relationship differs from others because you, AAP, or the client may end your employment with or without notice and with or without reasons. However, if you accept a job with AAP, we do expect you to finish the assignment.

Marketing Strategy

AAP’s target market is both businesses and professional workers. Phase one of the marketing plan will target the University of Oregon, the technology industry, and the top 500 businesses in Eugene through networking and cold calling. Phase two will target small businesses with less than five employees because smaller businesses may not have the in-house capability to locate, evaluate, and hire potential professional contingent workers through a small PR campaign.

7.1 Businesses

We began marketing the businesses through several personnel surveys. The University of Oregon Alumni Association, University of Oregon Foundation, and University of Oregon Human Resources Department, as well as Symantec’s Human Resources director were approached for information regarding their need for professional temporary and permanent workers. These initial interviewees have all (with the exception of U of O HR Dept) become clients within the first year of business. After these personnel surveys were complete, we adjusted our recruitment of professional workers to meet the demand.

Another tactic was joining multiple business groups. AAP became a member of the Eugene Chamber of Commerce and attends the weekly greeters meetings; the Women’s Business Network and attends the monthly meetings; the Professional Women’s Organization and attend the monthly meetings; as well as the City Club, keeping a pulse on what is happening in the community, attending as the proprietor sees fit.

The next approach is face-to-face cold calls. The tools for these calls are simple-a business card and a brochure. The information collected during the cold call is vital: how many employees does the business have; in what areas have they experienced a need for professional contingent employees; and who is the appropriate contact.

7.2 Professional Workers

Our beginning point in marketing to workers was approximately 30 personnel surveys to professional contingent workers, building the foundation of our database.  AAP intends to recruit workers through advertising in the newspaper and appropriate trade magazines, trade shows, the University of Oregon career center, and by referral. We have found that each division within the company requires a different approach for recruitment. We try not to depend on newspaper advertising as we find the results are moderate. Results are far better with the employment department for some areas, with the U of O for others, and also through a series of developed contacts for the other divisions.

7.2.1 Trust

In order to build trust with both businesses and employees AAP will follow through as promised. We will treat each business, employee, and ourselves, with integrity. AAP will communicate clearly, asking businesses to specify the needs for follow-up service during the time that they employ our contingent worker. We will work with employees to assure that they have a clear understanding of what AAP offers and what we expect of them.

7.3 Supporting Research

“A fading model of employment in the United States envisions a business enterprise with full-time employees who can expect to keep their jobs and perhaps advance so long as they perform satisfactorily and the business continues. Changing labor market conditions threaten the concept of full-time permanent employment. As reported by the Conference Board in September 1995, contingent workers account for at least 10 percent of the workforce at 21 percent of the companies surveyed, or almost double the 12 percent of respondents with that number in 1990. Writing in the Monthly Labor Review in March 1989, Belous estimated that contingent workers constitutes 24 to 29 percent of the labor force in the United States. In August 1995, however, the U.S. Bureau of Labor Statistics (BLS) estimated the size of the contingent labor force at 2 to 5 percent of the total workforce. However, BLS did not count long-term part-time employees, who constitute 90 percent of part-time workers.”       — Society for Human Resource Management, The Contingent Worker: A Human Resource Perspective, by W. Gilmore McKie & Laurence Lipset taken from Chapter 1, What Is a Contingent Worker?

AAP is a service company providing businesses with customized personnel solutions by connecting them with the professional contingent work force. Research suggests that 2000 is an opportune time to be in the Eugene market with this service. Even with all of the evidence that contingent work is the wave of the present, and of the future, the niche of placing contingent workers who are paid $12.50 to $40 per hour is untapped in the Eugene area. However, a few companies place high-end contingent workers in the Portland area.

There are many reasons why businesses are turning to contingent workers. The Economic Policy Institute’s article “ Contingent Work ” by Polly Callaghan and Heidi Harmann explains that:

“Growth in involuntary part-time employment is causing total part-time employment to grow faster than total employment. Another indication of the shift toward part-time workers: hours for part-time workers are growing faster than hours for full-time workers. Temporary employment has grown three times faster than overall employment and temporary workers are being used for more hours. Contingent employment is growing faster than overall employment. Part-timers are disproportionately women, younger, or older workers. There has been a shift away from manufacturing toward trade and services. These structural changes help explain the growth in part-time employment.”

Because of the changing nature of jobs themselves, AAP’s services are desirable to employers of all sizes. Unlike five or ten years ago, many positions are so diversified, or specialized, that it is not financially feasible for an employer to hire a person to fill one position, requiring several areas of expertise. This is not financially wise for the business because of the pay range required to recruit and hire such a talented person (especially in areas such as graphics, design, etc.). The cost of payroll, taxes, benefits, and other miscellaneous staff required to run employees add to the burden of a downsized staff. Contacting AAP and using a professional contingent worker for each portion of a position as needed will solve this dilemma. Currently most businesses locate needed “qualified” workers by word of mouth. With one phone call, e-mail, or connection with our Web page, AAP makes the task easy.

In addition, Oregon’s economy is expected to continue growing, and employment, total personal and per capita income, and population growth rates are expected to exceed the national average (according to the 1997-98 Oregon Blue Book). Although Oregon’s economy is among the best there is an obvious group of contingent workers available to build an employee labor pool. The company draws from a labor pool of qualified contingent workers which consists of people who work at home, retirees, others who wish to work part-time. According to the Oregon University System, approximately 33% of bachelor’s degree graduates will be unable to find jobs in Oregon each year. So, recent college graduates are also a part of AAP’s labor pool.

Research shows that a large percentage of workers who tend to work more than one job are well-educated individuals who have a higher degree of education. According to Oregon Employment Department’s Occupational Outlook Quarterly , Spring 1997, 9.4% have Ph.D.’s; 6.5% a Professional degree; 9.1% a Master’s degree; 7.9% a Bachelor’s degree; 7.9% an Associate degree; and the remaining 15.8% lesser education. According to a Personnel Journal article “ Contingent Staffing Requires Serious Strategy ,” April 1995, there are also many retirees that enjoy doing contingent work.

Financial Plan investor-ready personnel plan .">

The following sections contain the financial information for All About People. Tables show annual projections for three years. Charts show first year monthly figures.  First year monthly tables are included in the appendix.

8.1 Important Assumptions

The financials of this plan are predicated on the following table of assumptions.

8.2 Projected Profit and Loss

Profit and Loss figures are projected in this table.

8.3 Projected Cash Flow

Our cash flow estimates are shown in the chart and table below. The owner expects to invest further amounts in the business over the next two years to finance continued growth.

8.4 Projected Balance Sheet

Three year annual balance sheets estimates appear below.

8.5 Business Ratios

The table below presents important business ratios from the help supply services industry, as determined by the Standard Industry Classification (SIC) Index code 7363, Help Supply Services.

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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 an HR Consulting 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 for an HR Consulting Firm

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.

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.

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.  

Don’t you wish there was a faster, easier way to finish your HR Consulting business plan?

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Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to learn about Growthink’s business plan writing service .

Other Helpful Business Plan Articles & Templates

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 September 19, 2022

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.

If you need help with your HR business plan template, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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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 .”

10+ SAMPLE HR Business Plan in PDF

Hr business plan, 10+ sample hr business plan, what is a hr business plan, areas of human resources, tips to improve human resource management , how to create a hr business plan, what is a hr business plan, how do you write a human resources business plan, what are the 7 major hr activities.

HR Business Plan And Budget

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Step 1: establish the objectives, step 2: clarify the roles and job descriptions, step 3: assess the programs and resources, step 4: identify the strategies , share this post on your network, you may also like these articles.

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13 tips for hr professionals who are launching their own staffing agency.

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If you're an HR professional with a passion for talent acquisition and a dream of entrepreneurship, starting your own staffing agency can be a rewarding and lucrative venture. However, embarking on this journey requires careful planning, industry knowledge and access to valuable resources.

Below, 13 Forbes Human Resources Council members share the crucial steps that aspiring staffing agency owners should take to lay a strong foundation for their business. From understanding the market demand and identifying your target clientele to developing a robust business plan and branding strategy, each aspect plays a pivotal role in your agency's success.

1. Explore Different Environments

Work in every area of HR and within different organizations if and when possible, even if this means interning or job shadowing. There is no school or training program that will better prepare you for this journey than your own knowledge and experience. - Jenna Hinrichsen , Advanced RPO

2. Approach Situations With Integrity

Approach everything with the knowledge you hold and with integrity. Be open, listen and understand the one area or niche that you are an expert in. Embrace the relationships you have and leverage them for guidance and opportunities. Start with a plan that outlines the impact you want to have—it's the "so what" to the agency and not just the "why;" what are the key principles that are central to you? - Chandran Fernando , Matrix360 Inc.

3. Understand The Threadbare Of The Client's Needs

The most successful staffing agencies are the ones that understand the client's needs threadbare. Staffing agencies are of two types: ones who source candidates who match the job description; and the better ones who source profiles that match the cultural fit, who can handle current challenges in that role and fit the company's current situation. - Subhash Chandar , Laminaar Aviation Infotech

Forbes Human Resources Council is an invitation-only organization for HR executives across all industries. Do I qualify?

4. Analyze, Define, Understand And Stand Out

As someone who has bootstrapped their own recruiting firm and experienced acquisition, here's my advice for launching your agency: Analyze the market thoroughly, clearly define your business offerings, understand your competition and stand out by delivering genuine innovation and a compelling value proposition. - Chad MacRae , Tinder

5. Find A Mentor

Staffing is somewhat different than HR, so this arena also involves client service and business development. I strongly recommend finding a mentor before you launch, getting involved with the American Staffing Association and subscribing to "Staffing Today" to keep up with current trends. - Lisa Shuster , iHire

6. Define Your Niche

Before you launch, define your niche to differentiate your agency. The best go-to resources are current headhunters who head up their own firms: They can share the good, the bad and the ugly. - Britton Bloch , Navy Federal

7. Analyze The Market

Spend some time analyzing the market and identifying a niche where you can stand out. It's best to be specialized—this could be by industry or by position scope. You want to be seen as a trusted advisor. One resource that I found very helpful when I was leading a recruiting agency was the National Association of Personnel Services. They provide training and connections to recruiting resources. - Hazel Kassu , Sudduth Search

8. Build Solid Funding

Have solid funding in the bank. It is critical that you have the funds and resources to support your business for at least six months. Payouts and contractual agreements often are at net 30 or 45 days after month end. - Julie Hankins , NNIT

9. Learn As Much About Business As You Can

Regardless of whether you’re an HR or recruiting professional, launching a staffing agency is a business, and running a business requires a unique skill set. Based on what I've read, approximately 50% of all businesses fail in the first five years, so before starting one, you should try to learn as much about business as possible. Sites such as Udemy, Coursera and LinkedIn Learning offer a range of online business courses. - John Feldmann , Insperity

10. Understand The Industry

Conduct thorough market research. Understand your industry, identify target markets and analyze competitors to identify gaps and opportunities. A valuable resource for guidance in this process is the U.S. Small Business Administration (SBA). The SBA provides resources, training and assistance to entrepreneurs, including information on market research, business planning and financing options. - Joseph Soares , IBPROM Corp.

11. Gain Clients Outside Of Friends

Start with a client—if you can get a client that is not a friend or a close connection, you have a business to build. Until you can get someone you didn't know before to pay for your services — no other activities matter at the start. - Nick Frey , Avomind

12. Identify Gaps In The Industry

Identify gaps where you see agencies falling short. It is a challenging time to start an agency, so identify where you can make improvements on the client and candidate experience. Focus on one or more areas of expertise and figure out what types of companies you will initially target and what types of candidates you will recruit. - Erin ImHof , CertiK

13. Network With Established Professionals

Consider checking online platforms like Small Business Administration, and SCORE for guides, templates and mentorship. Additionally, industry-specific associations like the American Staffing Association offer resources and support for starting staffing agencies. Networking with established professionals and attending industry conferences can also provide valuable insights and connections. - Kimika Banfield , Arootah

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Strategic Human Resource Planning (SHRM): Guide to Human Resources & Management

Lucija Bakić

April 5, 2024

Strategic human resource planning (SHRM) is a proactive process that aligns human resource capabilities with long-term business goals.

In this guide, we’ll go through the basics of why this foward-thinking approach is so important for resource planning success . This includes its definition, the main steps, and best business practices. Key Takeaways

• Strategic HR management (SHRM) is a key step to ensuring that businesses are resilient and sustainable in the long run.
• Key steps of the process include: analyzing current capacity, forecasting needs, gap analysis, HR strategy implementation and monitoring.
• Many of the challenges of SHRM, such as resistance to change or tracking KPIs, can be addressed by implementing a modern ERP software solution .

What Is Strategic Human Resource Planning?

Strategic human resource planning is part of the broader human resource plan ning (HRP) strategy. This process targets long-term objectives, spanning from one to five years, and ensures that businesses have enough capacity to meet future needs. Strategic HR planning must be aligned with short-term resource planning, which handles daily concerns, such as employee schedules and workloads. Long-term strategies should also be aligned across departments, such as the finances or management, to ensure that initiatives contribute to shared organizational goals. See more : What Is Human Resource Planning ?

Why Businesses Need Strategic HRP

Some of the critical business questions that strategic HRP addresses can include:

• Will you have enough human resources for future needs?
• Which type of talent will you need (regarding skills, seniority, etc.)
• Which conflicts or gaps could appear in your business workflows?
• Do you have contingency plans for various risk factors?

Additionally, it can cover broader concerns, such as the need for organizational flexibility or continuous improvement. As an ongoing process, strategic management provides the perfect answer for businesses to tackle and address complex issues.

5 Main Steps of the Strategic HR Planning Process

The four main steps of strategic HRM include analyzing current capacity, needs forecasting, gap analysis, and strategy development and implementation.

1. Analyzing Current Capacity

This step involves analyzing both internal and external business circumstances that are important for future demand. Internal factors usually include details about your current employees, including their productivity, specific skills, availability, and engagement levels. External factors encompass market trends, economic conditions, and industry-specific demands that could influence future resource requirements. Learn more: Capacity Model Examples

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2. Needs Forecasting

Accurate needs forecasting is one of the most challenging parts of the developing workforce plans. It involves predicting the skills, overall capacity, and roles needed to keep a business relevant during changing market conditions and technological advancements. Therefore, it requires a thorough understanding of your human capital and the industry. Needs forecasting includes:

• Supply forecasting: Assesses the current workforce and external labor market trends to identify whether there will be an excess or shortage of talent in the future.
• Demand forecasting: Focuses more on demand, i.e., quantifying future labor requirements to ensure that business goals will be met.

3. Gap Analysis

Gap analysis takes the first two steps of the human resource management process to pinpoint specific areas of improvement — it compares the current workforce capabilities with future needs to identify conflicts or discrepancies. For example, a retail chain looking to expand its online presence might consider its current capacity, and realize that it has enough technical roles to go into e-commerce. However, by conducting needs forecasting of the competitors, it may recognize the need for marketing professionals skilled in SEO or digital marketing to drive more of their customer base to their website.

4. Strategy Development

The next step involves developing specific strategies to address resource conflicts and help your business reach its goals. Some of these may include:

• Talent management strategies can be developed to address issues with workforce management. It can include processes such as recruiting, retaining, and developing employees.
• Employee engagement strategies are usually developed to tackle low morale and productivity. Organizational strategies might include improving collaboration, manager-to-employee feedback, or other capacity building examples .
• Development programs are a specific part of talent management, aimed to address skill gaps through upskilling or reskilling employees. Strategies may include mentoring by senior employees, workshops, or other training opportunities.
• Succession planning is utilized to mitigate the risk of key positions becoming vacant unexpectedly. It usually involves identifying high-risk positions and then selecting and preparing potential employees to fill them in the future.

Learn more about workload management .

5. Implementation and Monitoring

To ensure that your strategies are effective across time, it’s necessary to closely monitor progress, usually by analyzing various key capacity performance indicators (KPIs). Setting desired targets can be a good way of determining if you’re on the right track — for example, an agency with low productivity might set its desired utilization rates at 80%.

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However, it’s equally important to keep in mind that some benefits of successful ERP can be difficult to quantify or determine in a short amount of time. This can include better workplace culture or increased employee satisfaction. See more: ERP benefits for businesses

Documenting Your Strategic HR Plan

The strategic HR document should include an outline of the organization’s human resource objectives, the strategies for achieving them, and the steps for implementation. Putting your initiatives into writing can help drive alignment across various teams and ensure that everything is progressing according to plan.

How and Where to Create Documentation?

According to research by Forrester, 97% of organizations have minimal or no digitally documented processes. While traditional documentation can be better than no documentation, consider the benefits of automating information gathering and sharing with ERP software solutions .

We used to have a project management tool, a time tracking tool, a support tool, a way we handled opportunities and sales-driven processes. Those were all separate tools that we had, and it wasn’t good. It also meant that all that data was being lost every time we switched between tools , or we had to find a way to normalize the data between them. And now, the fact that it’s all in one, it’s really a game changer.

BRYAN CASLER, VICE PRESIDENT OF DIGITAL STRATEGY AT 4SITE INTERACTIVE STUDIOS

For example, the resource and agency management tool Productive can help you automate the work scheduling process with its resource planning model template, provide real-time reporting on utilization rates, manage employee availability and time off, and more. Another great feature you can consider is collaborative documentation with AI content creation. This can help you keep all essential project data on a single platform.  

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Challenges & Best Practices for Strategic HRP

Some of the main challenges of strategic HRP include ensuring buy-in at all organizational levels, handling resistance to change, efficiently monitoring performance, and fostering continuous improvement.

Getting Business-Wide Buy-In

Organizational changes need to be effected from the top to the ground-level staff. Getting buy-in for new initiatives from leaders and other key stakeholders is essential to get the most out of your HRP initiatives. Silos can cause issues for adoption and cause miscommunications across teams, where one part of the company may not be aware of the changes or understand their role in implementation.

Overcoming Resistance to Change

According to Deloitte, some of the biggest roadblocks to new initiatives include resistance to change (82%) and inadequate sponsorship (72%). Both can be addressed with clear communication and transparency, so that all employees understand why and how initiatives are being implemented. Asigning change ambassadors within teams can facilitate a smoother transition. Learn more: Efficient resource management for multiple projects

Reviewing and Analyzing Progress

Good initiatives can stumble and fall if there’s no way to measure actual performance. Selecting the right key performance indicators and implementing a way to analyze them is important for the success of HRP initiatives. For example, a consulting firm that has issues with turnover might implement additional benefits or hire more staff to balance workloads — the KPIs to be monitored would be employee satisfaction, the utilization rate , and the attrition rate.

Productive can forecast KPIs for professional services agencies, like revenue and profit margins

Incremental Changes and Continuous Innovation

Another reason why monitoring KPIs is so important is that incremental but timely improvements are always better than extensive changes. Smaller adjustments allow businesses to remain flexible and agile to adapt to market demands and internal changes without causing disruptions.

The Role of Analytics & HRP Software

Finally, most, if not all challenges mentioned above can be streamlined with the right tools for resource planning and HR management. The benefits of using such tools include:

• Improved timeline estimation (60%)
• More effective use of resources (55%)
• Enhanced team communication (49%)
• More accurate metrics (38%)

There are many potential options on the market, but consider using a comprehensive software for your strategic planning. These types of solutions can give you a competitive advantage with benefits such as centralized workflows, unified data, and reduced costs for tech stacks.

Get the most out of your agency’s resources with Productive

As an all-in-one solution tailored to agencies of all shapes and sizes, Productive can help you manage both day-to-day resource management and create strategic plans. Key features include: resource allocation, employee performance management, real-time reporting, project budgeting, agency workflow automations, and much more. Learn more about Productive by booking a demo today.

What are the 4 HR strategies?

The 4 HR strategies include talent acquisition and retention, learning and development, performance management, and workforce planning and forecasting (check out our workforce planning definition ). Each strategy addresses a part of the human resource planning process and contributes to achieving organizational success.

What is strategic resource planning?

Strategic resource planning is a part of human resource management that examines the capacity and needs of your future workforce for sustainable business growth. It’s focused on ensuring that your business has the critical skills for meeting business goals over a long period of time.

What are the 5 steps in human resource planning?

The 5 main steps in human resource planning include: analyzing current HR availability, forecasting future needs, gap analysis, developing strategies for human resource management, and implementing and monitoring your initiatives.

What is SHRM and its importance?

SHRM or strategic human resources management is a forward-looking approach to managing human resources and aligning HR practices with organizational goals. It allows businesses to remain competitive, sustainable, and flexible in dynamic market conditions.

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How to Create a Recruitment Plan (with a Template You can Use)

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When it comes to hiring, even the most successful companies can get tripped up by the complexities of recruitment. Without a clear strategy, the process can feel like a maze of job ads, interviews, and unanswered emails. This is where a well-defined recruitment plan comes into play.

A recruitment plan acts as a roadmap, ensuring your hiring efforts are organized, targeted, and aligned with your company’s broader goals. Whether you’re a global enterprise navigating large-scale growth or a mid-sized business trying to make strategic hires, a recruitment plan helps streamline the process, saving you time and resources while enhancing the candidate experience.

The real beauty of a recruitment plan lies in its ability to be tailored. From defining hiring needs and timelines to budgeting and branding, the plan provides structure without stifling flexibility. In this guide, we’ll walk you through the steps of creating an effective recruitment plan—and provide you with a template you can customize to fit your organization’s needs.

Let’s dive in and take the guesswork out of your next hiring cycle.

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What is a recruitment plan?

A recruitment plan is a comprehensive strategy designed to manage the entire hiring process from start to finish. It outlines your organization’s hiring needs, timelines, budget, and the specific steps required to attract, interview, and onboard the right talent. Think of it as a blueprint that keeps your team organized and focused, ensuring you make the best hiring decisions without wasting time or resources.

At its core, a recruitment plan brings consistency and clarity to hiring. By documenting everything—from candidate sourcing strategies to interview processes—you create a repeatable framework that can be applied to any future hiring needs. This prevents common pitfalls like rushed decisions, unqualified hires, or overextending the recruitment budget.

The value of a recruitment plan becomes even more apparent as your company grows. Larger organizations, especially those with global operations, face unique challenges like high-volume hiring or navigating international talent pools. A structured recruitment plan keeps things running smoothly, ensuring every step aligns with both immediate and long-term business goals. For mid-sized businesses, it’s a game-changer, helping maximize resources and ensuring each hire brings real value to the team.

Whether you’re looking to fill one position or a hundred, having a recruitment plan allows you to maintain control and flexibility in an ever-changing hiring environment.

The importance of a recruitment plan for enterprises and mid-sized organizations

Whether you’re leading a global enterprise or running a mid-sized business, a recruitment plan is essential for navigating the complexities of hiring. Without a well-structured plan, the process can quickly become inefficient, leading to poor hiring decisions, extended timelines, and strained resources.

For enterprises , recruitment plans are crucial for maintaining consistency across large, often dispersed teams. With multiple departments and global offices, enterprises frequently deal with high-volume hiring, and a lack of coordination can result in bottlenecks, delays, and mismatched candidates. A recruitment plan not only provides a unified strategy but also ensures that each department follows the same protocols, maintaining quality across all hires.

On the other hand, mid-sized organizations might not deal with the same scale of hiring, but they face their own unique challenges. With leaner teams and often limited budgets, these companies need to be more strategic about how they allocate resources. A recruitment plan helps ensure that every hire is well-thought-out, aligned with business goals, and justified in terms of cost and value. It allows mid-sized businesses to stay competitive without overspending or rushing into poor hiring decisions.

Whether managing a handful of new hires or hundreds, having a recruitment plan in place empowers organizations to hire faster, smarter, and more efficiently. It creates a roadmap that enables both enterprises and mid-sized businesses to scale their teams in a way that’s sustainable and aligned with long-term growth.

Steps to create a recruitment plan

Creating an effective recruitment plan involves a series of deliberate actions that guide the hiring process from start to finish. Below, we outline the key steps to help you build a plan that ensures a smooth, structured, and successful hiring cycle.

Step 1: Assess hiring needs and define goals

The first step in creating a recruitment plan is to identify your organization’s hiring needs. Start by analyzing your current workforce and forecasting future requirements. Ask yourself:

• Which roles are critical for business growth?
• Are there any upcoming projects or expansions that will require additional staffing?
• Are you aiming to reduce turnover, increase diversity, or shorten time-to-hire?

Clearly defining your hiring goals helps ensure that recruitment efforts are aligned with the broader objectives of the company. This step also lays the foundation for setting benchmarks that will guide the rest of the recruitment process.

Step 2: Create a detailed budget

A solid recruitment plan must include a clear budget. This helps ensure that your resources are allocated efficiently across the different stages of the hiring process. Your recruitment budget should account for:

• Job board postings and advertising costs.
• Sourcing tools like Applicant Tracking Systems (ATS) or LinkedIn Recruiter.
• External recruiter or agency fees.
• Employer branding efforts, including any marketing or social media costs.

Allocating a budget early on prevents overspending and helps you identify the most cost-effective channels to attract top talent.

Step 3: Select your recruitment channels

Not all recruitment channels are created equal, and selecting the right ones is crucial to finding the best candidates. Depending on the role and your organization’s needs, you may choose from a mix of internal and external channels:

• Internal channels : Employee referrals, internal mobility, and succession planning.
• External channels : Job boards like Indeed and LinkedIn, niche job sites, recruitment agencies, or social media platforms.

For high-volume hiring, enterprises may focus on internal mobility or large-scale external job postings, while mid-sized companies may rely more heavily on external networks and specialized recruitment firms.

Step 4: Build a strong employer brand

Your employer brand plays a significant role in attracting the right talent. Candidates want to work for companies whose values resonate with their own, and a strong employer brand helps you stand out in a competitive hiring market. Ensure that your branding is consistent across all platforms—your careers page, job descriptions, social media, and even employee testimonials.

Employer branding efforts should emphasize what makes your organization unique: your culture, benefits, growth opportunities, and mission. This not only attracts high-quality candidates but also ensures they align with your company’s values and work style.

Step 5: Define your selection and interview process

Once candidates are sourced, a structured interview process is key to maintaining consistency and fairness. Develop a clear outline of each interview stage, from initial screening to final offers. This might include:

• Pre-screening questions to quickly narrow down applicants.
• Specific interview rounds focused on technical skills, culture fit, or leadership potential.
• Involvement of different team members, such as HR, hiring managers, and potential team leads.

Consistency in the interview process ensures that every candidate is evaluated on the same criteria, leading to more informed hiring decisions.

Step 6: Implement and track metrics

Tracking recruitment metrics is vital to understanding the success of your plan and identifying areas for improvement. Important metrics to monitor include:

• Time-to-hire and time-to-fill: The total time taken to fill a role, from job posting to acceptance.
• Cost-per-hire : The total recruitment costs divided by the number of hires.
• Quality of hire : A measure of how well new employees meet performance expectations.
• Offer acceptance rate : The percentage of candidates who accept job offers versus those who decline.

By monitoring these metrics, you can adjust your recruitment plan to improve efficiency, cut costs, and ensure a high standard of hiring.

Use this recruitment plan template

To make your recruitment process more streamlined and organized, here’s a customizable recruitment plan template. This template covers every crucial stage, from defining your hiring goals to tracking the effectiveness of your efforts. Feel free to adapt it based on your organization’s needs, whether you’re hiring for a single role or conducting a large-scale recruitment drive.

Recruitment Plan Template

Section 1: hiring needs and objectives.

• List the specific positions to be filled (e.g., Software Engineer, Marketing Director, etc.).
• Number of hires needed for each role.
• Are you expanding a department, replacing a role, or scaling up for growth?
• Focus on goals such as improving diversity in hiring , reducing time-to-hire, or hiring for critical skills.
• Essential skills, education, and experience for each position.
• Any additional traits or cultural fit requirements.

Section 2: Recruitment timeline

• Recruitment start date:
• Target hire date:
• Key milestones (e.g., job posted, initial interviews, final interviews):
• Sourcing window: _______ days.
• Interview process: _______ days.
• Offer and negotiation window: _______ days.

Section 3: Budget allocation

• Cost for job boards (LinkedIn, Indeed, etc.).
• Cost for recruitment marketing/ads.
• Cost for recruitment software (ATS, sourcing tools).
• Career fairs or recruitment events.
• Employer branding (social media, employee testimonials, etc.).

Section 4: Sourcing strategy

• Employee referral programs.
• Promotions or internal mobility.
• Job boards (e.g., LinkedIn, Indeed).
• Niche industry-specific job boards.
• Recruitment agencies.
• Social media platforms.
• Diversity hiring platforms, alumni networks, or specific industry associations.

Section 5: Interview and selection process

• HR team members.
• Department heads or team leads.
• Other stakeholders (technical experts, leadership, etc.).
• Number of interview rounds (e.g., screening call, technical interview, cultural fit).
• Key questions or assessments for each stage.
• Any technical or behavioral tests required.
• Candidate surveys or feedback requests.
• Hiring manager evaluations for each interview stage.

Section 6: Candidate experience and employer branding

• Messaging to be included in job descriptions and interview processes.
• Employee testimonials or case studies to share during recruitment.
• Regular communication touchpoints during the interview process.
• Timely feedback to candidates at each stage.
• Setting clear expectations and timelines for candidates.

Section 7: Metrics and tracking

• Time-to-hire : Average time from job posting to offer acceptance.
• Cost-per-hire : Total costs involved divided by the number of hires.
• Offer acceptance rate : Percentage of offers accepted vs. declined.
• Candidate satisfaction : Feedback on the recruitment experience.
• Quality of hire : Measure of how well new employees perform based on initial goals and expectations.

By filling out this template, you’ll be able to maintain control over every stage of your hiring process , ensuring that nothing is left to chance. Tailor it to fit your organization’s unique hiring needs and watch how it simplifies even the most complex recruitment campaigns.

Tailoring your recruitment plan for enterprises vs. mid-sized companies

While the core structure of a recruitment plan remains consistent, the approach can vary significantly between global enterprises and mid-sized companies. Each faces unique hiring challenges, and adapting the plan to suit your organization’s size and needs is crucial for success.

For global enterprises: Scaling and managing complexity

Enterprise recruitment often deals with large-scale efforts that span multiple regions, departments, and job functions. Here are key ways to tailor the recruitment plan to meet those needs:

• High-volume hiring : Enterprises may need to fill dozens or even hundreds of positions at a time. To manage this, leverage bulk recruitment strategies, such as internal talent pools, high-volume job boards, and recruitment automatio n tools. Having a dedicated hiring team or external agencies to handle high-volume roles can ease the burden on in-house recruiters.
• Geographical diversity : Recruiting for multiple locations requires different approaches based on local job markets, legal requirements, and cultural considerations. Enterprises should customize job ads and sourcing strategies for each region, taking into account factors like language, local salary norms, and compliance.
• Employer branding across regions : With such a large reach, it’s important to maintain a consistent employer brand while allowing for regional adaptations. The key is to balance your global brand identity with the local values and norms of each hiring market. Tailoring your employer brand messaging for specific markets ensures that it resonates with local talent.
• Data-driven decisions : With access to more resources, enterprises should regularly track recruitment metrics (time-to-hire, cost-per-hire, diversity ratios) and adjust strategies based on real-time data from different regions or departments. This helps pinpoint bottlenecks and inefficiencies in the hiring process.

For mid-sized businesses: Maximizing efficiency with limited resources

While mid-sized businesses might not face the same scale of recruitment as larger enterprises, their hiring challenges are often rooted in resource constraints. Here’s how to adapt the recruitment plan for more focused, cost-effective hiring:

• Prioritize quality over quantity : Mid-sized companies typically have fewer roles to fill but must ensure that each hire is impactful. Focus recruitment efforts on finding high-quality candidates who can add real value. This means targeting niche job boards, professional associations, or specialized recruitment agencies that cater to your industry.
• Leverage employee referrals : A cost-effective strategy for smaller companies is building a robust employee referral program. Employees can help source candidates who are already familiar with the company’s culture and values, speeding up the hiring process while saving on advertising costs.
• Streamline the interview process : With smaller teams, the interview process should be efficient and focused. Instead of long multi-round interviews, mid-sized companies can create a condensed but thorough process that assesses key skills and cultural fit without dragging on. Ensuring quick decision-making can prevent losing top talent to competitors.
• Employer branding on a budget : Mid-sized businesses might not have the resources for large-scale branding efforts, but they can still build a strong presence by using social media, employee testimonials, and engagement in local or industry-specific communities. Highlight the unique benefits of working for a smaller, more agile company, such as growth opportunities and a tight-knit culture.

Tailoring your recruitment plan ensures that your organization’s unique needs are met, whether you’re scaling globally or hiring strategically for a mid-sized business. By customizing your approach, you’ll not only attract better candidates but also create a smoother, more efficient hiring process.

Tools to support your recruitment plan

1. applicant tracking systems (ats).

An Applicant Tracking System (ATS) is a vital tool for managing your recruitment process efficiently. It handles everything from job postings to candidate tracking and interview management, all in one place. For companies that want to streamline the entire recruitment lifecycle — including interview scheduling — choosing an ATS that integrates with GoodTime adds another layer of efficiency. GoodTime’s integration with leading ATS platforms allows seamless scheduling and automation, reducing the administrative burden on your team.

ATS options that integrate with GoodTime include:

• Workday : A strong enterprise solution, Workday integrates with GoodTime to streamline hiring processes for large organizations, providing both applicant tracking and scheduling automation.
• iCIMS : A comprehensive ATS, iCIMS supports high-volume hiring and integrates well with GoodTime to automate and manage complex interview scheduling.
• SmartRecruiters : Known for its ease of use, SmartRecruiters combines recruitment marketing, sourcing, and applicant tracking with smooth GoodTime integration for interview scheduling.
• Greenhouse : Known for its scalability and robust reporting, Greenhouse is ideal for enterprises. It provides strong integration with GoodTime, making interview scheduling smoother and more automated.
• Lever : Lever is great for mid-sized companies that prioritize candidate relationship management and collaborative hiring. The GoodTime integration simplifies interview coordination and scheduling.
• Jobvite : A popular platform for mid-sized and enterprise companies, Jobvite integrates with GoodTime to help automate the interview process, reduce scheduling conflicts, and improve time-to-hire.
• SAP SuccessFactors : Known for its enterprise-level HR capabilities, SuccessFactors integrates with GoodTime to offer seamless interview scheduling, helping large organizations manage recruitment across global teams.

With the right ATS and GoodTime integration, you can automate tedious scheduling tasks, manage candidates more efficiently, and improve the overall recruitment experience.

AI for more human hiring

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Bringing it all together: Build your recruitment plan today

Creating a structured recruitment plan is essential for organizations looking to streamline their hiring processes, save time, and improve the quality of hires. Whether you’re managing the complexity of a global enterprise or navigating the more focused needs of a mid-sized company, a well-thought-out recruitment plan ensures that every stage of the hiring process is aligned with your goals.

By breaking down each phase—assessing hiring needs, budgeting, sourcing candidates, and measuring success—you’ll gain more control and visibility over your recruitment efforts. The customizable template provided in this guide allows you to tailor your approach, ensuring that no detail is overlooked. Additionally, the right tools, such as an ATS integrated with GoodTime, can further simplify and optimize your workflow, freeing your team to focus on building strong relationships with candidates.

With a solid plan in place, you can confidently tackle your next hiring cycle, knowing that you’re equipped to make strategic, data-driven decisions that benefit both your organization and the candidates you bring on board. Start building your recruitment plan today, and see the positive impact it will have on your hiring process and overall business growth.

About the Author

Jake Link is a business process automation expert and Director of Content for GoodTime. He draws on over 10 years of experience in research and writing to create best-in-class resources for recruitment professionals. Since 2018, Jake's focus has been on helping businesses leverage the right mix of expert advice, process optimization, and technology to hit their goals. He is particularly knowledgeable about the use of automation and AI in enterprise talent acquisition. He regularly engages with top-tier recruitment professionals, distilling the latest trends and crafting actionable advice for TA leaders. He has advised companies in the tech, legal, healthcare, biosciences, manufacturing, and professional services sectors. Outside of work, you can find Jake exploring the coastline of Massachusetts' North Shore with his dog, Charlie.

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What Is Human Resource Planning (HRP)?

Human resource planning (HRP) is the continuous process of systematic planning to achieve optimum use of an organization's most valuable asset—quality employees. HR planning ensures the best fit between employees and jobs while avoiding manpower shortages or surpluses.

There are four key steps to the HRP process. They include analyzing present labor supply, forecasting labor demand, balancing projected labor demand with supply, and supporting organizational goals. HRP is an important investment for any business as it allows companies to remain both productive and profitable.

Key Takeaways

• Human resource planning (HRP) is a strategy companies use to maintain a steady supply of skilled employees while avoiding staffing shortages or surpluses.
• HRP needs to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term.
• Having a good HRP strategy in place can mean productivity and profitability for a company.
• HRP is made harder by the fact that not everything can be predicted.
• There are four general steps in the HRP process: identifying the current supply of employees, determining the future of the workforce, balancing between labor supply and demand, and developing plans that support the company's goals.

Michela Buttignol

What Is Human Resource Planning (HRP) Used For?

Employees are a key part of any business. Without a strong workforce, income will likely dry up and the company will go out of business. HRP is designed to prevent this from happening. Its mission is to identify current and future hiring and training needs.

HRP allows companies to plan ahead so they can maintain a steady supply of skilled employees. The process is used to help companies evaluate their needs and to plan ahead to meet those needs.

HRP needs to be flexible enough to meet short-term staffing challenges while adapting to changing conditions in the business environment over the longer term. To help prevent future roadblocks and satisfy their objectives, HR managers have to make plans to do the following:

• Find and attract skilled employees
• Select, train, and reward the best candidates
• Keep employees motivated
• Cope with absences and deal with conflicts
• Succession planning
• Promote employees or let some of them go
• Keep tabs on trends that could impact future supply and demand

Identifying a company's skill set and targeting the skills a company needs enables it to strategically reach business goals and be equipped for future challenges.

The goal of HR planning is to have the optimal number of staff to make the most money for the company. Staying on top of this and achieving effective HRP can ensure that the company:

• Gets the best out of current employees and increases their value
• Has a competitive advantage in its industry
• Is better placed to respond to challenges and adapt to changes

Challenges of Human Resource Planning (HRP)

HRP offers many advantages but it isn't without challenges. The future isn't easy to predict. A technology breakthrough can change everything, as can a black swan event. Issues such as employees getting sick and wealthier or more prestigious competitors poaching staff can also cause serious problems.

Additionally, as globalization increases, HR departments will face the need to implement new practices to accommodate government labor regulations that vary from country to country. The increased use of remote workers by many corporations will also impact HRP and will require HR departments to use new methods and tools to recruit, train, and retain workers.

Companies can set themselves up to better deal with these types of challenges if they are adaptable and continuously keep tabs on the world around them. The more prepared a company is for an event that impacts its human resources, the better it can handle and potentially take advantage of it.

HRP strategies must frequently be revised to match not only the company's changing needs but also external changes.

There's also the challenge of HRP being time consuming and potentially costly. HRP offers benefits but it can take a while to reap them.

A high level of employee engagement can be essential for a company's success. If a company has the best employees and the best practices in place, it can mean the difference between sluggishness and productivity, helping to lead a company to profitability. However, like most important investments, it can take a while for these efforts to pay off. In the beginning, HRP will be a drag on profits.

What Are the Four Steps to Human Resource Planning (HRP)?

There are four general, broad steps involved in the HRP process. Each step needs to be taken in sequence in order to arrive at the end goal, which is to develop a strategy that enables the company to successfully find and retain enough qualified employees to meet its needs.

1. Analyzing Labor Supply

The first step of HRP is to identify the company's current human resources supply. In this step, the HR department studies the strength of the organization based on the number of employees, their skills, qualifications, positions, benefits, and performance levels.

2. Forecasting Labor Demand

The second step requires the company to outline the future of its workforce. Here, the HR department can consider anything that factors into the future needs of the company, including promotions, retirements, layoffs, and transfers. The HR department can also look at external conditions impacting labor demand , such as new technology that might increase or decrease the need for workers.

3. Balancing Labor Demand With Supply

The third step in the HRP process is forecasting the employment demand. HR creates a gap analysis that lays out specific needs to narrow the supply of the company's labor versus future demand. This analysis will often generate a series of questions, such as:

• Should employees learn new skills?
• Does the company need more managers?
• Do all employees play to their strengths in their current roles?

4. Developing and Implementing a Plan

The answers to questions from the gap analysis help HR determine how to proceed, which is the final phase of the HRP process. HR must now take practical steps to integrate its plan with the rest of the company. The department needs a budget , the ability to implement the plan, and a collaborative effort with all departments to execute that plan.

Common HR policies put in place after this fourth step may include policies regarding vacation, holidays, sick days, overtime compensation, and termination.

Why Is Human Resource Planning Important?

Human resource planning (HRP) allows a business to better maintain and target the right kind of talent to employ—having the right technical and soft skills to optimize their function within the company. It also allows managers to better train the workforce and help them develop the required skills.

What Is "Hard" vs. "Soft" Human Resource Planning?

Hard HRP evaluates various quantitative metrics to ensure that the right number of the right sort of people are available when needed by the company. Soft HRP focuses more on finding employees with the right corporate culture, motivation, and attitude. Often these are used in tandem.

What Are the Basic Steps in HRP?

HRP begins with an analysis of the available labor pool from which a company can draw. It then evaluates the firm's present and future demand for various types of labor and attempts to match that demand with the supply of job applicants.

Quality employees are a company's most valuable asset. HRP involves the development of strategies to ensure that a business has an adequate supply of employees to meet its needs and can avoid either a surplus or a lack of workers.

There are four general steps in developing such a strategy: first, analyzing the company's current labor supply; second, determining the company's future labor needs; third, balancing the company's labor needs with its supply of employees; and fourth, developing and implementing the HR plan throughout the organization.

A solid HRP strategy can help a company be both productive and profitable.

International Journal of Business and Management Invention. K. Prashanthi. " Human Resource Planning-An Analytical Study ," Page 64.

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HRD audit means the methodical authentication of job analysis and design, recruitment and selection, direction and placement, training performance appraisal and job evaluation of the HR of the organization.

HRD audit is useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization and helps company remain competitive.

Learn about:-

1. Introduction to HRD Audit 2. Meaning and Definition of HRD Audit 3. Characteristics 4. Objectives 5. Pre-Requisites 6. Designing and Using HRD Audit

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7. Writing HRD Audit Report 8. Role of HRD Audit in Business Improvements 9. Role of the HRD Department in HRD Audit 10. Benefits.

HRD Audit: Meaning, Characteristics, Objective, Role, Pre-Requisites, Benefits and Other Details

Hrd audit – introduction.

HR audit is a functional audit. It consists of diagnosing, analyzing, evaluating and assessing future lines of action within the framework of HRM. HRD auditing is a basic tool for the management of a company. Its objective is not only the control and quantifying of results, but also the adoption of a wider perspective that will aid in designing future lines of action in the HRD field.

Thus, HR auditing must perform two basic functions, 1st; it must be a MIS, whose feedback provides information about the situation in order to facilitate the development of managing processes or the development of HRD. On the other hand, it must be a way of controlling and evaluating the policies that are being applied, as well the established process.

HRD audit helps in organisational strategy, achieving goals and also to benchmark various performance data, to ensure continuous development of any organisation systematic. HR audit helps in developing good business practices and among others, private best direction to an organisation to achieve its strategic goals, optimising costs and return on investment (ROI) in all HR initiatives (especially on training and development).

For monitoring periodically through systematic HR audit is essential for every organisation.

HR audit helps in many other key areas as below:

1. Legal Compliance:

HR is bound by various laws. Non-compliance not only sparks strained employer-employee relations, even can drag an organisation to a court of law. Systematic HR audit can ensure such compliance and benefit an organisation to concentrate more on other strategic issues

2. HR Audit and Record Keeping:

HR record keeping is either electronically or through paper documents are, very important. Improper records can give rise to legal complications and organisations may face structures in terms of fines and law suits. Systematic HR audit can prevent this duly identifying deficiency in HR record-keeping and suggest better way of record maintenance.

3. Employee-Relations Audit:

Such audits encompass study of various aspects of employee relations through structured surveys to map employees’ perceived level of motivation / morale / job satisfaction etc. Through HR audit, getting an insight on employees thinking on various policies and programmes is possible. Such programmes or schemes some incentives, benefit plan etc.

HR audits can also be conducted in areas like compensations and benefit plan, pension plan, diversify issues, training and development functions etc. HR audit ensures that sound and cost effective policies are implemented.

HRD Audit – Meaning and Definition

HRD audit means the methodical authentication of job analysis and design, recruitment and selection, direction and placement, training performance appraisal and job evaluation of the HR of the organization. HRD audit is useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization and helps company remain competitive.

The scope of HRD audit is large encompassing all the HR function namely managerial compliance of personnel policies, procedures and legal provisions, HRD planning and staffing and audit of the HRD climate on employee motivation, morale and job satisfaction.

It provides various benefits to the organization by finding out the contribution of the HRD initiatives towards the organization. It also helps in development of the professionalism of employees. It helps reduce the developmental cost by providing a cost benefit analysis of the HRD activities. HR audit is helpful in facing the challenges of performance appraisal and increasing the potentiality of personnel in the organization.

HRD can be defined as a process of people to acquire competencies. In an organizational context HRD is a process by which the employees of an organization are helped in a continuous and planned way to acquire or sharpen capabilities required to perform various functions associated with their present or expected future roles and develop their general capabilities as individuals and discover and exploit their innate potential for their own and organizational development purpose.

HRD Audit helps the employees acquire new competencies through a process of performance planning, feedback, training, periodic review of performance, assessment of the developmental needs, and creation of development opportunities through training, job rotation, responsibility definition and other mechanisms. HRD audit is a Comprehensive Evaluation of Human Resource Development practices in an organization and their appropriateness to achieve the short and long term business goals of the organization.

There are various methods of HRD audit as it examines the adequacies and inadequacies of HRD structure, staff and their competencies, line managers and their attitudes, top management and their support, unions and their role in competence building for future. HRD audit suggests mechanisms for improving all these in the business context.

HRD Audit – Salient Features of HRD Audit: Comprehensive, Linkages and Business-Driven

Rao (2007) defines the notion, thought, and salient features of HRD audit:

1. HRD audit is comprehensive,

2. It examines linkages with other systems, and

3. It is business-driven.

1. Comprehensive:

An audit team must consider the business plan and its corporate strategies from the very beginning. The HRD auditor needs to take into account where the company intends to be after a definite period of time. The top level management needs to discuss these issues with the auditor. The auditor needs to examine the objective evidences such as long-term documents as well.

Thereafter, the auditor needs to assess the skill base required to perform the new roles and the current skill base of HRD staff in the company in relation to various roles and role requirements.

Following this, an auditor should verify the effectiveness of the existing HRD mechanisms in developing people and ensure that human competencies are available in adequate levels in the company. An HRD audit examines linkages with other systems. The HRD structure existing in the company should be adequate enough to manage the company’s HRD functions. Top management and senior managerial styles of managing people need to promote a learning culture.

The managerial styles should facilitate the creation of a learning environment. Auditors need to examine this difficult task.

2. Linkages with Other Systems:

There is a linkage between HR and other functions such as production management, maintenance management, total quality management, personnel policies, strategic planning, etc., in any organization. An audit examines these linkages between HRD and other systems. On the basis of evaluation, HRD auditors suggest future HRD strategies required by the company.

The suggestions further include – (a) the structure the company needs to have for developing new competencies, (b) the systems that need to be strengthened, (c) the ideal managerial styles and work culture conducive and compatible with HRD processes in the company. The managerial styles of the top management should also be emphasized.

3. Business-Driven:

HRD audit is business-driven and primarily focuses on fulfilling the objectives. Along with meeting objectives, HRD audit evaluates HRD strategy, structure, system, staff, skills and styles, and their appropriateness.

HRD audit is not a problem-solving exercise. HRD audit does not always provide solutions to organization-specific problems involving industrial relations, discipline, performance, etc. However, it throws some insights into the sources of the problem. It never gives feedback about any specific individu­als.

However, it gives feedback about the HRD department, the structure of the HRD departments, competency levels of the personnel manning, leadership styles, processes practiced, interrelationships of HRD system with systems, influence of the HRD on the other systems, etc.

HRD audit is one of the five systems used to measure the effectiveness of HR practices, the other systems being – (a) benchmarking, (b) HR accounting, (c) HR information system, and (d) HR researches.

HRD Audit – 5 Main Objectives of HRD Audit

(i) To determine the effectiveness of management programmes which facilitate management to develop allocate and monitor human resources.

(ii) To analyse the factors and recommend for correcting deviation’s viz. the extent of bank deviation from HRD policies / intent of objectives spelt out / achievement of performance standards

(iii) To seek explanations and information and answers questions like what happened / why happened.

(iv) To the extent, to which like managers have complied with HRD policies

(v) To study the current manpower inventory and identify shortfalls or excesses

HRD Audit – Pre-Requisites

(i) Legal Compliance

(ii) Employment / recruitment

(iii) Terminations

(iv) Employee Relations

(v) Record Maintenance / Technology Up-gradation

(vi) Compensation / Salary

(vii) Orientation

(viii) Training and Development

(ix) Communications

(x) Policies and Procedures

An HRD Audit provides quick way to take stock of a company’s Human Resources and Practices with an eye towards. Improving them the advantage of HRD audits is that they bring a level of expertise to bear on issues. Once the audit is complete the findings are presented to management.

In HRD audit, the aspects of HRD practices covered are:

(i) Recruitment and employment

(ii) New employee orientation

(iii) Employee manual

(iv) HR policies and procedures

(v) Employee surveys

(vi) Exit interviews

(vii) Employee files and record keeping

(viii) Legal compliance

HRD Audit – Designing and Using HRD Audit (With Measures)

HRD audit starts with an understanding of the future business plans and corporate strategies. While HRD audit can be done even in organizations that lack well formulated future plans and strategies, it is most effective as a tool when the Organization already has long-term plans. The HRD audit starts with efforts to answer the question, where does the company want to be ten years’ time from now, three years from now and one year from Now?

The answer to this question needs to be provided by the top-level management. On the basis of the answers to these questions the auditors finalize the subsequent audit strategies and methodology. The consultants make an attempt to identify the nature of the core competencies the Organization needs to develop in order to achieve its long-term plans. The auditors also need to identify skills required to be developed by the company at various levels and with respect to various functions. Listing all these core competencies and skills for the future is the starting point of HRD audit.

The HRD audit normally attempts to assess the existing skills and the competency gaps in order to achieve the long-term business goals and short term results of the company. What is the current skill base of HRD staff in the company in relation to various roles and role Requirements is assessed through an examination of the qualifications of HRD staff, job descriptions, training programs attended etc. Apart from this the auditors attempt to identify various HRD sub-systems that are available to ensure the availability, utilization and development of skills and other competencies in the company.

In the next stage, an attempt is made by the auditors to examine whether the current HRD structure can handle the imperative and future HRD needs of the company. This examination helps assess the existing skill base of the HRD Staff of the company, their professional preparation, their attitudes, their values, their developmental needs, the line Managers perceptions regarding them, etc.

An attempt is made to examine the leadership styles, human relations’ skills, etc., of senior managers. The extent to examining their styles in order to facilitate the creation of a learning environment is accessed. HRD Audit starts with finding out details of the future plans of the organizations and uses it as a base for outlining the competency requirements of the organization in future.

The current competencies, structures, HRD systems are assessed in terms of their capability to prepare the organization for the future. Suggestions are made to improve the climate of the Organization. HRD plays an increasingly important role in the achievement of future goals. HRD audit is cost effective and can give many insights into a company’s affairs. It makes the top management to think in terms of strategic and long term business plans.

The HRD Scorecard is a measure of the HRD maturity level of an organization. The scorecard is based on the following assumptions and takes into consideration the research based understanding gained in the last few decades regarding HRD.

The maturity level of HRD in an organization is indicated by the following factors:

1. HRD Systems Maturity.

2. HRD Competencies of the Employees including the HR Department.

3. HRD Culture of the Organization.

4. HRD Influence on the Business Goals or Business Linkages of HRD.

This model is based on the assumption that competent and motivated employees are needed to provide quality products and services at competitive rates and ways that enhance customer satisfaction. It further emphasises that competencies and commitment can be developed through appropriate HRD.

The following scores effectively measure the HRD:

1. HRD Systems Maturity Score:

In a HRD Mature organization there will be well-developed HRD systems and HRD systems Maturity can be measured through HRD audit.

2. HRD Competence Score:

Competencies of the HRD department and the line managers play a significant role in implementing the systems and processes in ways that could ensure employee satisfaction, competence building and customer satisfaction linkages.

3. The HRD Culture:

Values and processes created by the HRD tools, staff and their styles also play a crucial role in building sustainable competencies in the organization. These need to be measured and monitored. It is possible in some corporations to have very little of HR systems and yet have a high level of HR competencies and HR culture.

4. HRD-Business Linkage Score:

Business linkages of HRD are very crucial component of HRD effectiveness. HRD systems, competencies and the culture must be aligned with the business goals of the corporation. The alignment could be ensured through the direct linkages with customer satisfaction and employee motivation indices.

The HRD system should focus on the above dimensions. Questions like are the HRD systems aligned towards the important business goals of the corporation, and does the HRD staff reflect adequate understanding the commitment to the business goals of the organisation and are the HRD processes and culture suitable for achievement of goals need to be answered.

HRD Audit – Types of Reports (With Role of HRD Auditor)

The HRD audit takeaway is a report that the auditors prepare and submit authority of the organization.

The reports are primarily of two types:

a. Clean Report – The clean report is one which indicates the appreciative aspects of the departments function.

b. Qualified Report is the one which brings forth the gaps in performance and therefore contains remarks and remedial measures.

HRD Audit inputs are given with the objective to make the organization a world-class organization. The audit recognizes the company’s efforts in human resource utilization and helps the organization perform well. Because of competitive environment and the changing business scenario the competency requirements of the organizations are likely to be changed in the future. The audit reveals the facts and helps in creating systems that are performance driven culture and are ready to take the challenges for the future.

Role of HRD Auditor :

HRD auditor has to:

i. Improve HRD system.

ii. Recommend effective recruitment practice.

iii. Ensure effective implementation of training programmes.

iv. Suggest ways to smoother industrial relations.

v. Give suggestions for conflict resolution.

vi. Strengthen accountability through appraisal system.

vii. Make recommendation to modify the style of leadership and remove the blocks in free flow of communication.

viii. Share his insight on developing the competencies of HR.

ix. Gives clarity on the role of HR department.

HRD Audit – Role of HRD Audit in Business Improvements (With Benefits)

HRD audit gives many insights into a company’s affairs. It is time-consuming, but cost-effective. The auditors come together for a period ranging from three days to two weeks, stay at the organization, and give a report generally within a fortnight or a month’s time. The auditors generally offer a prelimi­nary presentation on the last day of the audit.

The benefits of HRD audit are diverse and manifold. Apart from improving the organization’s practices, it creates a more professional image of the department among managers. In addition, it helps to project an elevated image of an organization to its stakeholders.

HRD-audit is cost effective and can give many insights into company’s affairs.

HRD audit leads to benefits viz.:

(i) Involvement of Top Management:

Since the employees cannot participate in HRD audit, the auditors have to force the management to share their plans, which has increased employee involvement.

(ii) Role Clarity of HRD and Line Managers:

Enhanced role clarity of the HR Department and HR functions and increased understanding of line managers, about their role have been uniform result of audit

(iii) Human Productivity and Strengths and Weaknesses:

Identifies the strengths and weaknesses in management system. It also points out the absence of system that can enhance human productivity e.g. MIS, rules and procedures etc. Preparation of a manual for the delegation of powers, roles and responsibilities, sharing of information, are some of the replant activities.

(iv) Increase in Professionalism:

As a result of HR audit, new recruitment and retention strategies have been worked out for the talented-employees

(v) Create a Learning Organisation:

A learning culture style requires empowering attitude, participative style of management and ability to convert mistakes, conflicts and problems.

(vi) Improvements in HR Systems:

HR audit helps in redesigning the HR system. The most frequently changed or renewed systems include performance appraisal training, job rotation, career planning and promotion policies.

(vii) Cost Effective Training:

In HR process the Identification of training needs and utilisation of training of inputs and learning for organisational growth and development, are assessed. As direct investments are made in training, any cost benefit analysis draws the attention of the top management and HR managers to the training & function with relative ease,

(viii) Increased Focus on Competencies:

One of the results of HR audit is to focus on knowledge, attitudes and skills required by the employees in the organisation. The audit establishes a system of role clarity and fixing of accountabilities. More sensitivity is developed to the missing aspects of competencies.

(ix) Strengthening Employee Accountability:

HR audit gives the existing state of the accountability of employees. This gets assessed through performance-appraisal as well as through work culture

(x) TQM Interventions:

Quality improvements and establishing TQM systems, require a high degree of employee involvement. Due improvements in the training system, TQM programmes have also improved.

HRD Audit – Role of the HRD Department   in HRD Audit (With Useful Tips)

The HRD department has the most crucial role to play in HRD audit. First of all, it requires a lot of courage to get the HRD audit initiated. Any HRD audit is likely to point out the weak areas of the HRD function. Due to a limited understanding of the role of line managers, top management and a number of other factors in the success of HRD, most line managers and sometimes even the top management is likely to put total responsi­bility for the weak areas on the HRD department.

It is not quite uncom­mon to find the successful practice of HRD systems attributed to line managers and the top management, and the unsuccessful ones to the HRD department. It needs a good deal of maturity on the part of the HRD manager and the top management to appreciate the role of all employees in HRD. Everyone should eventually own the HRD function and the line managers should take a higher level of responsibility for the development of their own staff.

The HR department should be a facilita­tor. However until the time the maturity level of an organisation reaches this stage, the HR department has the tough task of building the HR competencies of the staff and, at the same time, has to be prepared to face criticism. The HRD department can use HRD audit as a step to build the desired awareness among line managers.

The following are some useful tips for the HRD department to use HRD audit effectively:

(a) Do not become defensive. Do not take criticism of the weak areas in the HRD function negatively you may have initiated the audit and therefore, you should have the confidence and courage to accept the weaknesses and plan improvements.

Weaknesses re­flect the status of the HR function which, in turn, is determined by the competencies of the staff, the treatment the function is getting in the corporation and also how it was treated in the past, past incumbents, competency gaps in line managers as well as the HR staff, developments or research or knowledge base in the area itself, top management support, role of unions and many other factors. You cannot ensure everything to be perfect. At the same time you need to ensure that the HR function plays a sig­nificant role in giving the right direction to the company.

(b) Use the audit to – (i) point out to the top management about their role in HRD and the support required from them; (ii) educate the line managers about their role in HRD; and (iii) educate the unions about the opportunities they have to develop their employees and the company.

(c) Create mechanisms to discuss the report and improve the func­tion. The audit provides a great opportunity to improve the effec­tiveness of the HRD function in the company. It also provides a good opportunity to develop the staff internally, to streamline the HRD budget, enhance HRD competencies, rationalize the HRD structure and participate in business strategies and decisions.

(d) Build your own competencies and learn to play a more signifi­cant role in making your corporation competitive and world class.

HRD Audit – Top 8 Benefits of HRD Audit

HRD audit is a complete appraisal of the active HRD structure, strategies, systems, styles, skills and culture and their aptness to achieve the short-term and long-term goals of the organisation. HRD audit begins with a comprehension of the future business plans and corporate strategies.

HRD audit can be done in organizations having well formulated future plans and strategies and it proves to be the most effective tool when the organization already has long term plans at hand. HRD audit endeavors to find the future HRD needs of the company after reviewing the current HRD activities and inputs available. HRD audit is cost-effective and can give many insights into a company’s dealings.

HRD audit has several benefits as outlined by some of the most effective HRD consultants like T V Rao:

Benefit # 1. Establishing Strategic Plans:

HRD audit begins with strategic plans which then roll down to the lower levels. This enables the employees to plan their own activities and eventually their competency development program.

Benefit # 2. Describing the Role of the HRD Department and Line Managers in HRD:

HRD audit is important for employees at various levels for current as well as the future development. However, enhanced role clarity of HRD department and HRD function and increased understanding of line managers about their HRD role is an essential aspect of its success.

Benefit # 3. Reformation of Other Management Practices:

HRD audit recognizes the strengths and weaknesses in the some of the management systems existing in the organization. At the same time it also points out the lack of systems that can augment human productivity and employment of the existing capability base which in turn may have an effect on the performance of the employees. In a small number of cases an HRD audit has facilitated the management look at some of these sub-systems and work procedures.

Preparation of a manual of delegation of powers, clarification of roles and responsibilities, reformation the manuals of economic procedures and systems, amplification of the information systems, and distribution of information are some of the ensuing activities in this direction.

Benefit # 4. Superior Recruitment Policies and Extra-Professional Staff:

An HRD audit reveals the skill base required for smooth functioning of the organization. It gives direction for the proficiency requirements of employees at various levels and provides a base for recruitment policies and procedures. This results in strengthening the recruitment policies and procedures and helps in working out new recruitment and retention strategies.

Benefit # 5. Altering the Styles of Top Management:

One of the objectives of HRD is to create a learning organization by making the top managers of the company exhibit a developmental style of management. The prerequisite of such a style is an empowering attitude, participative style of management, and an ability to translate errors, conflicts and problems as learning opportunities. HRD audit provides subtle feedback to the top management and to initiate a change process.

Benefit # 6. Enhancement in HRD Systems:

The HRD audit has helped most of the organizations in understand the effectiveness of their HRD systems and re-design the HRD systems.

Benefit # 7. Supplementary Planning and Cost-Effective Training:

One of the major benefits of HRD Audits is that it answers the question of returns on investments made in training. The process of identifying training needs and utilization of training inputs and learning for organization growth and development are evaluated. Post-training follow-up and dissemination of knowledge relating to it helps organizations strengthened its training function by introducing a systematized and developed training policies system.

Benefit # 8. Enhanced Focus on Human Resources and Human Competencies:

One of the benefits of an HRD audit is to focus on new knowledge, attitudes and skills required by the employees in the organization. Observations are made about the technical, managerial, human and conceptual competencies of the staff at various levels. This helps organizations identify and focus sharply on the competency requirements and gaps.

The audit sets up a system of role clarity and accountabilities. More understanding is developed to the gaps between desired and real competencies. This helps in straightening and strengthening things out.

Apart from the above stated benefits, an HRD audit can also give significant inputs about the existing state of the accountabilities of employees. Quality improvements require a high degree of employee involvement and in a number of cases the HRD audit has helped finding out and fixing the performance gaps.

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