Transcript Introduction - Info-Tech Research Group

V2
Develop an HR Strategic Plan
Strategize to maximize HR’s impact on business success.
McLean & Company
1
Introduction
With the bulk of most organizations’ operating expenses going towards labor
costs, ignoring how this money is invested or can be better leveraged is folly.
Increase your HR department’s cost-effectiveness, efficiency, preparedness,
and overall success by developing an HR strategic plan.
This Research Is Designed For:
This Research Will Help You:
 HR leaders wanting to take on a more
 Move through the steps necessary to develop
strategic role within their organization.
 HR leaders who have been asked to take on
more strategic responsibilities by their
organization.
 HR leaders who have an operational plan, but
wish to develop a more formal strategic plan.
 HR leaders who have never crafted a strategic
plan before and want step-by-step guidance
on how to do it.
a formal HR strategic plan.
 Analyze the current and desired target states
of the HR department and HR practice in the
organization in terms of the overall business
strategy.
 Organize the results of your strategic analysis
into a suitable format for consistent review and
updates.
 Document a formal HR strategic plan and
present it to the executive.
McLean & Company
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Executive Summary
• Just as an IT or Sales department requires a formal strategic plan, so too does the HR department if it
hopes to support business goals and objectives, and ensure that the right people with the right skills
are available at the right time in a cost-controlled way.
• HR strategic planning is a top priority for HR and business leaders alike: both groups rate it in the top
three of areas for HR effort investment according to McLean & Company’s 2012 HR Trends Survey.
• HR’s success in meeting key alignment, budget control, employee retention, and business relations
goals increases in lock-step with the extent to which an HR strategic plan is in place.
• HR strategic planning explores four facets of the organizational environment in which it operates:
o Culture
o Operations
o People
o Systems
A thorough COPS Analysis, accompanied by standard strategic planning efforts such as SWOT
analysis, will provide HR with the most complete picture of the current state. With this in hand, HR can
envision a realistic future target state and a series of achievable strategic initiatives that will bridge the
gap between today and tomorrow.
• An ideal HR strategic planning process will move through four stages: Assess (current state), Envision
(future state), Develop (initiatives and the strategic plan), and Evaluate (strategic plan success).
• Through this HR strategic planning process, McLean & Company offers a series of tools and templates
to help spur brainstorming, document decisions, and develop a final HR strategic plan.
McLean & Company
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Make the Case
What’s in this Section:
• Learn why HR strategic planning is a top priority for
•
•
•
•
Sections:
Make the Case
both HR and the business.
Collect Strategic Plan Inputs
Know the key benefits of HR strategic planning.
Assess the Current State of HR
Be aware of common strategic planning pitfalls.
Envision the Future State of HR
Gain an introduction to the COPS framework.
Develop and Prioritize Key
Initiatives
Get a step-by-step process model for undertaking
HR strategic planning
Set Measures and Evaluate
Progress
McLean & Company
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HR strategic planning is a top priority for HR leaders
according to McLean & Company’s 2012 HR Trends Survey
HR leaders are increasingly aware that developing an HR strategic plan is a
top priority. The time to take action is now!
Top 3 Priorities Identified by HR Leaders
Key survey findings:
• HR leaders and business executives alike have
identified developing a robust HR strategy as
a top priority in comparison with all other areas
of HR activity.
• Despite recognizing it as a top priority, another
McLean & Company survey showed that only
10% of HR leaders actually have a formal HR
strategic plan in place.
Leadership
Develop HR Strategy
Performance Mgmt
50%
45%
Percentage Who Selected Each Area
• However, an additional 60% of HR
Top 3 Priorities Identified by Business
Executives
departments are currently planning to develop
a strategic plan on some level.
Both HR leaders and
business executives list HR
strategy as a top priority!
60%
Workforce Planning
84%
Leadership
82%
Develop HR Strategy
With 75% of executives selecting HR strategy as a priority, HR
leaders no longer have the excuse that the business doesn’t
want them to play a role in the organizational strategic planning.
75%
Percentage Who Selected Each Area
Source: McLean & Company, N = 133
McLean & Company
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HR leaders are increasing their strategic planning efforts, but
if the effort isn’t guided properly, it will all be for naught
Be aware that…
 HR leaders are not only recognizing that developing an
HR leaders are prioritizing HR strategy, and their
efforts are following suit.
HR strategic plan is a priority, but they have also
significantly increased their efforts in the area.
 Developing an HR strategic plan will take time, and
some of the returns on the effort invested may not be
seen for a year or two.
Leadership
Strategy
 Given the long time frames, doing it right is as important
as doing it in the first place in order to avoid waste.
Performance Management
Risks and potential pitfalls…
Workforce Planning
x Failing to connect each strategic HR initiative to a
Recruiting
specific business goal.
Employee Development
x Spending too much effort trying to convince the
executive with words that you are strategic rather than
showing them that you are.
HR Operations
x Failing to take inventory of all current HR projects. Not
knowing the available resources and constraints on
those resources will result in the strategic plan not
getting off the ground.
40%
Source: McLean & Co.,
N=124
50%
60%
80%
% Respondents Who Said They Increased Their
Effort in These Areas Compared to Last Year
The core of any HR strategy or framework has to be the absolute acknowledgement that it’s
business that drives – we’re all working together because of a business concept.
- John Winsor, Owner, Winsor Consulting
McLean & Company
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Faced with rapid change, organizations need to develop a
more focused and coherent approach to managing HR
In the same way a business requires a sales or technology strategic plan, it
also requires a human resources strategic plan.
An HR strategic plan:
• Is a formal, written document that
serves as a governance tool.
HR
Strategic
Plan
• What people do we need to
manage and run our business in
order to meet our strategic
business objectives?
• Applies to a specific organization
over a specific time frame.
• Clearly outlines the high-level goals
and objectives for all key areas of
HR management.
• Describes the initiatives that will be
undertaken in order to meet those
HR goals and objectives.
Sales &
Marketing
Strategic
Plan
The goal of any HR strategic
plan is to answer two critical
questions:
Business
Strategy
• What programs and initiatives must
be designed to attract, develop,
and retain the right people in order
to compete effectively?
Technology
Strategic
Plan
McLean & Company
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Having a strategic plan in place improves business relations,
prepares HR for change, and increases overall efficiency
Increased responsiveness and predictability allows HR to take off the
firefighter’s helmet.
Without a strategic plan, the HR director often has to
default to firefighter mode. Too much time putting out
fires can eliminate the ability to plan ahead and make
the HR department more efficient and more effective for
meeting the business needs of the organization.
Being proactive means having a formal plan in place,
allowing HR to prevent fires from happening and deal
with urgent matters more effectively. A strategic plan will
prepare HR for upcoming changes and help it better
manage impending projects. This will also allow the HR
department to better serve the business and help
achieve overall organizational goals.
With a strategic plan, I’m able to react very quickly to
changes. I get a lot less stressed when changes come down
that can cause major blips because I’ve already done the
planning in advance.
HR departments with a strategic plan feel
they are more than TWICE as prepared
than those who have no strategic plan.
No Strategic Plan
Strategic Plan
61%
29%
Level of HR Preparedness
Source: McLean & Company, N = 82
- Anita Orozco, HR Director
McLean & Company
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Your HR strategic plan is connected to many smaller
operational plans that address all areas of HR practice
Organizational Design: An
organization’s composition,
which is made up of its basic
structure and its operating
mechanisms.
Workforce Plan:
Defines the level
and type of
recruitment or
redeployment of
staff needed by
business units to
gain the skills
required to meet
business objectives.
Training & Development
Plan: The projected
organizational and individual
learning, training, and
development requirements.
Compensation Plan:
The balance between
corporate objectives and
the need to remunerate
and incent the people
who support reaching
those objectives.
Organizational
Design
Compensation
Plan
Workforce Plan
HR
Strategic
Plan
Training and
Development
Plan
Talent
Management
Plan
Talent Management Plan:
Tactics to deal with the key
employee lifecycle issues
identified within the business
strategy. In union
environments, this will also
include labor relations.
McLean & Company
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Developing a formal HR strategic plan reaps benefits across all
key areas of HR practice
Increase the maturity of your strategic planning and increase the likelihood
of reaching your objectives.
HR departments that don’t have a
plan become filers, paper pushers,
and clerks. The ones that do have it
really can work with the business
and affect change, manage change,
and really become part of the
organization.
- Julie Webb, HR Director, Monarch
Overall Success
Organizations that have an HR strategic plan in
place also see improvements in HR’s ability to
do all of the following:
 Respond to the business needs.
 Retain staff.
 Deal with the executive team.
 Manage its budget.
 Meet its objectives.
 Align the cost of HR initiatives with business needs.
As the maturity level of your HR strategic plan
increases, so too does your chance for success.
Maturity of HR Strategic Plan
Source: McLean & Company, N = 82
Maturity is measured by the degree to which an HR strategy is in place:
1. We don’t have one, and have no current plans to develop one.
2. We don’t have one, but are currently planning to develop one.
3. We are currently developing an HR strategic plan.
4. We have an ad hoc, informal HR strategic plan.
5. We have a formal HR strategic plan.
McLean & Company
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Set aside “getting a seat at the table” – instead, focus on
showing how HR helps meet key business objectives
For most HR leaders, the question is not “How do I get to the table?” Rather,
it’s “How do I best contribute to the success of our organization?”
• For years HR leaders have talked about getting a seat at the table.
However, HR’s real goal should be clearly demonstrating how
much HR contributes to the greater organizational goals. If
you do this well, and the business believes HR has a strategic role
to play in the organization, then that seat at the table will come.
• CEOs are demanding that HR show the strategic connection to
the organizational goals that prove they are contributing to the
growth and performance of the company through effective people
management. Chances are the executive has already put pressure
on you to become more strategic, but if not it’ll be coming soon.
• Developing your HR strategic plan will allow you to address any
People capital is
paramount to any
business strategy;
without people,
nothing happens.
- John Winsor, Owner,
Winsor Consulting
demands requiring you to be more strategic and to demonstrate
more value to the business goals.
If your goal is to transition your HR department into a more strategic role, don’t wait for the
executive to recognize that potential. Instead, demonstrate your strategic potential by
developing a plan that directly rolls up to specific business goals. Don’t tell them, show them!
McLean & Company
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The costs and returns of HR strategic planning will vary wildly
from organization to organization
The ROI of HR strategic planning is less about the planning process itself
and more about the success of the initiatives you decide to tackle.
HR strategic planning costs and returns
• The costs of strategic planning are largely focused on the time
spent by HR staff and executives to complete the appropriate
planning exercises and build the plan itself.
• The returns of strategic planning are less tangible. For HR, a
heightened profile and increased credibility in the eyes of the
business can’t be measured in financial terms, but the opportunities
created and increased ease of gaining buy-in down the road are
decidedly valuable.
HR strategic initiatives costs and returns
• The financial returns of HR initiatives are often indirect (e.g.
improved engagement increases retention, thereby reduces turnover
costs), and may not be fully realized for years. The case can be
made, but expect to do some research to connect the dots.
• Each HR strategic initiative will have its own unique costs, and
each demands its own business case showing the tradeoffs between
these costs and hoped-for returns.
• The margin between costs and returns for an initiative can be
narrow or wide. HR’s ability to maintain or increase that margin is the
measure of that strategic initiative’s – and HR’s – success or failure.
Bottom Line
Avoid investing effort in a strategic
planning process if you don’t have
enough control over the initiatives
selected to drive a successful
outcome.
Don’t risk failure!
A failed HR strategic plan will hurt
your team’s reputation as credible
business players, and it could take
a very long time to recover from
that.
An HR department has to have a
strategic plan…Otherwise it gets
all the dumb stuff.
- Julie Webb, HR Director, Monarch
McLean & Company
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Good HR strategic plans take into account four organizational
areas: Culture, Operations, People and Systems (COPS)
Culture
Culture refers to the beliefs, values, norms, and
management style of the organization. (For more on
understanding culture, see McLean & Company’s Rid the
Organization of an Inconsistent Culture to Improve
Employee Engagement.)
Operations
Operations includes the structure, job roles, and reporting
lines of the organization.
Culture changes slowly, whereas
strategies – more concrete – are
constantly refined. Nevertheless, strategy
and culture go hand in hand.
- Peter Empringham, VP, Concert
HR leaders must include operational
structure in their HR strategy to keep
aligned with the overall business
structure.
- Paul Turner, HR Forecasting & Planning
People
People consists of the skills, knowledge, and potential of
employees and the management team.
Systems
Systems refers to the HR programs, processes, and
mechanisms like employee selection, communications,
training, rewards, and career development.
The catalyst to drive business results
is skilled and engaged people.
- John Winsor, Owner, Winsor
Consulting
If an organization really values quality
and service, you not only have to retain
staff, you must also review the
organization, reward, appraisal and
communications systems.
- Paul Turner, HR Forecasting & Planning
McLean & Company
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Use McLean & Company’s HR strategic planning process, and
be sure to consider COPS at every step
Inputs
Business
Plan
+
HR
Trends
+
These four
areas are
involved at
each step of
the planning
process
Key
Events
1
Assess the Current State
2
A formal
HR
strategic
plan is
created
during the
Develop
phase
Envision the Future State
3
Develop Initiatives and Tactics
•
•
•
•
Culture
Operations
People
Systems
4
Evaluate the Progress
McLean & Company
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Case study: An HR department reaps the benefits of a formal
HR strategic plan
An HR leader took over a department with no strategic plan
and transitioned it into a strategic partner.
Industry: Healthcare
Segment: Medium enterprise
Source: HR director
Situation
A new HR director discovered that
the HR department not only wasn’t
consulted in any strategic planning
processes, but they themselves
didn’t have a plan in place.
This countered what the HR
director believed was most
beneficial for the HR department
and the business as a whole.
The HR director identified the
transition to a more strategic role in
the organization as the key goal for
her department.
Actions
The new HR director met with
every leader in the organization
and said, “Here is my buffet of
experience; I think I can help you
here and help you there.”
Rather than knocking on all those
doors and saying, “I think you
should do these things,” the HR
director arrived with a plan and
said, “This is going to help you.”
She backed this up by speaking up
and participating in meetings, and
demonstrating her capacity to think
and act strategically.
Results
Organizational leaders started
wanting HR’s presence when they
were discussing changes. In
particular, they wanted help with
change management and
developing succession plans.
The HR director had to hire more
staff to accommodate all the
requests to participate in various
steering committees.
Now the HR director, and the HR
department as a whole, are seen
as strategic partners in the
organization.
McLean & Company
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Collect Strategic Plan Inputs
What’s in this Section:
• Understand the role of the business strategic plan
in HR strategic planning.
• Know the impact of key internal and external events
on organizational strategic priorities.
• Analyze the influence of emerging HR trends – like
demographic changes, the war for talent, work-life
balance, and technology – on strategic planning
decision making.
Sections:
Make the Case
Collect Strategic Plan Inputs
Assess the Current State of HR
Envision the Future State of HR
Develop and Prioritize Key
Initiatives
Set Measures and Evaluate
Progress
McLean & Company
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The business strategic plan, key events, and HR trends are all
inputs that influence your final HR strategic plan
The Business Strategic Plan
The business strategic plan consists of the organization’s values, vision
and mission, high-level organizational goals and objectives, key business
initiatives required to meet these goals, objectives for the next one to
three years, and measures for success.
Key Events
Significant events that will alter the organization and the HR
department in a way that impacts HR operations. While some events
are foreseeable, others are not due to confidentiality constraints.
HR Trends
HR trends are external or environmental activities or developments that
influence or have a direct impact on HR priorities and the initiatives
implemented by the HR department.
McLean & Company
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Leverage the business strategic plan to guide the direction and
scope of the HR strategic plan
What is it?
Business Strategic Plan
The organization’s goals and objectives over the next one to three
years. Often includes values, vision and mission statements,
financial information, operational initiatives, time frames, and details
on how success is measured.
Why is it important to HR strategy?
At the core of everything is the
business strategy. We’re
tasked as HR leaders to get an
organization coalesced around
driving results that align to
the business strategy, and
that’s ultimately going to be
accomplished through
people.
- John Winsor, Owner,
Winsor Consulting
It is the guiding force behind your HR strategy’s focus and scope.
Every initiative taken by your HR strategic plan should be directly
linked to the goals, objectives, and initiatives articulated in the
business strategic plan, and not go beyond the boundaries set by the
business strategic plan.
What should you do?
• Understand your business strategy.
• Highlight the key driving forces of your business e.g. technology,
competition, the markets.
• Analyze the implications of these driving forces for the people-side
of your business.
• Connect the contribution of people to bottom-line business
performance within the context of these driving forces.
TIP – If the business strategy is not documented, discover if one is pending.
• If one is pending, your best bet is to wait until it’s available before doing your HR strategic plan to avoid guessing.
• If one is not pending, do one of two things: conduct discovery interviews with members of the executive in order to find
out what they think it is, or don’t do an HR strategic plan at all since it may be a directionless exercise in futility.
McLean & Company
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Identify foreseeable key events that will impact the HR
strategic plan and make sure they are accounted for
What are they ?
Key Events
Foreseeable significant events that will alter the organization in a
way that impacts the business and HR strategies, and potentially
day-to-day operations. Events could include:
• Departure or arrival of a key executive.
• Merger or acquisition.
• Opening or closing of branches or work locations.
• Major product or service launch.
Some events can’t be
predicted, so a certain
level of flexibility needs
to exist. But foreseeable
events have to be taken
into account and
planned for.
- Julie Webb, HR Director,
Why are they important to HR strategy?
Sometimes organizational events occur that have a direct impact
on HR, but this impact isn’t recognized until after the fact. This
causes major disruptions to HR plans and operations, causing the
HR leader to revert to a firefighter role.
What should you do?
• Meet regularly with members of the executive team to identify
any key organizational changes or initiatives that are planned
or may be occurring.
• Keep your eyes and ears open. While you don’t want to spread
gossip, do be receptive to off-the-record information.
TIP – Be prepared.
• While some initiatives may not seem to concern HR, there will likely be some ramifications. Imagine the possibilities and
develop a plan or response strategy that you can pull out of your back pocket just in case. It’s much more efficient to be
prepared for something that never comes to pass than to be surprised and caught off guard.
McLean & Company
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Take into account these four HR trends that will impact the
development of HR strategies
What are they?
HR Trends
External or environmental activities or developments that influence or
have a direct impact on HR priorities and, ultimately, the initiatives
implemented by the HR department. Major HR trends today are:
1. Demographic changes
HR must help the organization
understand the impact
external and internal
influences have on how work
is accomplished. HR has to
lead the workforce to build a
culture of continual selfassessment and adaptability,
without such a culture
organizations will stale and
suffer. You can’t keep denying
change.
2. The fight for talent
3. A healthy workplace
4. The impact of technology
Why are they important to HR strategy?
HR trends have a direct impact on your industry and the talent
market in which all HR departments are operating. These trends
should be on the HR’s radar since they affect challenges and
opportunities, how HR is managed, and what needs to be done to
keep pace with the competition.
What should you do?
• Keep your finger on the pulse of current and emerging trends, and
understand or assess the potential business implications of each
on your organization.
- John Winsor, Owner, Winsor
Consulting.
TIP – Tap multiple sources to find out what’s hot.
• Read HR publications, attend conferences, and talk to your colleagues and watch for recurring themes.
• Read the McLean & Company report HR Trends & Priorities for 2012 to discover what your peers are seeing on the
horizon and putting at the top of their to-do lists.
McLean & Company
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Trend 1: Demographic Changes – Changing characteristics of
the available talent pool will directly impact HR strategy
Baby boomers are starting to retire. Succession planning and how
Generation Ys will feature in the long-term strategy should be a priority.
A major shift in workforce demographics is taking place and
HR directors need to be prepared for the many
ramifications.
• A “silver tsunami” will take place in the U.S. over the
Gen Y members are more entrepreneurial, more
technologically savvy, and more workplace
transient than other generations.
next 20 years as 79 million baby boomers exit the
workforce.
◦
◦
This mass exodus will cause a skills void, thereby
increasing competition for talent.
HR leaders need to ramp up succession planning to
try to handle this shift in workforce demographics.
• Generation Y, or the Millennials (born between 1981
and 2000), are here, and there are more on the way.
◦
◦
Average tenure
at an
organization is
2 years
This group has characteristics and expectations unlike
any other workforce group.
Generation Y tends to be picky about the employers
they choose, expect flexible work options, and only
stay in a given organization for just over two years.
HR needs to review recruitment and retention
strategies and practices to address this permanent
change in potential employees.
More likely to
question
workplace
regulations
Gen Y
Raised with
technology and
instant
gratification
Able to grasp
new concepts:
learning
oriented
Source: NAS Insights,
Generation Y: The
Millennials
McLean & Company
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Trend 2: The Fight for Talent – The battle is on now and will
only get more intense as skills gaps widen
The most important corporate resource over the next 20 years will be talent.
• The number of people planning on leaving their jobs, even
without securing another one, is increasing. In October 2011, 1.1
million US employees left their jobs without another job in place.
• Currently, 32% of American workers are considering leaving
their job, which is up 40% since 2005. In addition to the 32%
considering leaving, 21% are not considering it as an option, but
they are dissatisfied with their current working conditions
and therefore are not working at their optimal level.
In Canada (source: The Conference Board of Canada):
• A shortage of 1 million skilled workers is predicted by 2020.
• 2.6 new jobs are expected to be created for every person
entering the workforce.
The key to attracting and retaining scarce skills is to be
– and be seen as – a first-tier employer that can
meet the needs of high potential and high performance
employees.
Workforce planning focused on skills gaps analysis
is critical. Once the nature of the gap is determined, it
becomes clear what talent to hire, lay off, develop, or
transfer, and what it will take in terms of planning and
effort to make these things happen.
HR departments with a formal HR
strategic plan feel better prepared to
fight for available talent.
Maturity of HR Strategic Plan
In the US (source: Mercer, What’s Working survey):
Readiness for Talent Competition
Source: McLean & Company, N = 82
Readiness was measured on a Likert scale ranging from:
1 = Not Ready 2 – 3 – 4 – 5 – 6 = Extremely Ready
McLean & Company
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Trend 3: A Healthy Workplace – Keep up with increasing
demands for employee wellness and work-life balance
There is no competitive advantage in exhausted, sick, and stressed out
workers. Address the issue now to gain an advantage over competition.
There is a definite link between the work environment and
the health and well-being of its employees. Further,
employers are now recognizing the connection between
employee well-being and its impact on the bottom line.
Surveyed workers identify work-life balance as
their greatest concern. The likelihood is that this
will only increase with the next generation.
Amongst North American workers:
•
•
•
•
Over half in large organizations feel stressed.
29%
Work-Life Balance
One in three feels burned out or depressed.
Many are thinking of quitting their jobs.
27%
Opportunity to Grow
Absenteeism is costing employers billions each year.
A business strategic plan that calls for increased or
modified performance levels will cause additional stress
levels in the workforce.
Increased stress will lead to increased burnout, which will
lead to increased turnover.
Your HR strategic plan needs to take these
conflicting demands into account when
projecting needs over the next three years.
Proactive measures must be built in to the HR
strategic plan to help reconcile potentially
costly and counter-productive competing
agendas.
20%
Ability to Accomplish Goals
Comraderie with Coworkers
Relationship with Boss
13%
11%
Area of Greatest Concern for Workers
Source: Wellness Strategies, SHRM, 2011
McLean & Company
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Trend 4: The Impact of Technology – Understand what’s available
and appropriate to optimize opportunities and mitigate risks
HR needs to look at technology in two ways: as an HR management tool, and
as a potential threat if abused by employees.
Technology as an HR tool:
• Technology allows HR to speed formerly manual processes,
capture data about an employee in a single view, and carry out
advanced metrics tracking and data analysis organization-wide
or down to the individual employee.
• The biggest opportunity for HR is in analyzing large volumes of
data for strategic planning purposes. Hard numbers always
carry more credibility with business leadership, and technology
can help collect and crunch them.
Technology as an area of HR oversight:
• The right technology can make employees more productive
(e.g. mobile devices), and HR has a role to play to make sure
people get the tools they need.
• The challenge for HR will be working with IT and management
to develop standards and policies about who gets access to
what for business purposes, and how it should be used.
HR practitioners tend to focus more on controlling
the use of technology by employees than
leveraging it themselves for advanced HR practice. Be
mindful of any in-department resistance to technology
use and start to flip the focus.
Top Three Technology Trends for HR to Watch:
1. Social media:
a. Opportunity: HR can more specifically target and
reach out to recruits, while building a more techsavvy employer brand.
b. Challenge: Use of social media by employees
(e.g. Facebook) during work hours decreases
productivity if uncontrolled.
2. Compliance and reporting requirements:
a. Opportunity: Technology reduces manual
paperwork, allows system-wide change updates,
and automates reporting.
b. Challenge: Technology adoption can bring
upfront costs, and adjusting to a new way of
doing things can take time and training.
3. Workforce analytic tools:
a. Opportunity: In-depth data analysis for problem
assessment and strategic planning.
b. Challenge: Establishing data needs and metrics
in the first place.
McLean & Company
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Assess the Current State of HR
What’s in this Section:
• Review HR’s role in the organization:
•
•
•
•
Sections:
Make the Case
Administrative, Functional and Strategic.
Collect Strategic Plan Inputs
Set the scope for your strategic planning project.
Assess the Current State of HR
Understand HR’s current capabilities and capacity.
Envision the Future State of HR
Conduct a current state SWOT Analysis.
Develop and Prioritize Key
Initiatives
Conduct a current state COPS Analysis.
Set Measures and Evaluate
Progress
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The first step in HR strategic planning is to assess the current
state – know where you are today to plan for tomorrow
The focus here is to use due diligence to get an information snapshot that
reflects what’s really happening in your organization, good and bad.
Five Key Steps in the Assess Phase
Inputs
Business
Plan
+
Key
Events
+
HR
Trends
A.
A
Identify your HR persona
B.
Develop a strategy scope statement
B
1
Assess the Current State
Envision the Future State
Develop Initiatives and Tactics
• Effort: 0.5–1 hours
• Effort: 2–3 hours
C.
C Inventory HR capabilities and projects
• Effort: 1–2 hours
D.
D
Conduct a SWOT analysis
E.
Conduct a current state COPS analysis
E
• Effort: 4–6 hours
• Effort: 4–6 hours
Evaluate the Progress
The outcomes of the HR capabilities and
projects inventory and the COPS analysis will
be summarized in the “Gaps in HR” section of
your final HR Strategic Plan document.
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Identify your HR persona to determine the focus of your
HR strategic plan and how you can best serve the business
A
Your persona is the role your HR department plays in the organization in
terms of competencies, primary areas of practice, and influence.
Administrative
Functional
Strategic
• The Administrative HR persona looks solely at basic or core administrative duties like
payroll, but doesn’t have formal focus, expertise, or depth in other HR functional areas like
recruitment, performance management, and employee development.
• This persona is more typical of new or young organizations that have not achieved
operational maturity or stability.
• The Functional HR persona includes core administrative duties plus a formal focus,
expertise or depth in a few HR functional areas like recruitment, performance
management, and employee development. However, this persona is not involved in
strategic planning activities or advanced HR practice areas like succession management
or leadership development.
• This persona is often found in stable small and mid-sized organizations.
• The Strategic HR persona performs core administrative duties, shows maturity in the full
range of HR functional areas, and is also an active and influential player in organizational
strategic planning and execution.
• While more typical in large organizations, it’s possible for organizations of all sizes to have
a strategic HR department based on need and perception of HR capability.
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Your HR department’s persona in the organization dictates A
the strategic plan’s depth and breadth – set your expectations
HR Persona
Recommended Approach to HR Strategic Planning
Administrative
• An HR strategic plan may be a non-starter. In all likelihood, there is no business
strategic plan on which to base an HR strategic plan, and the organization as a whole
doesn’t really need long-term strategic planning from its individual departments.
• Invest in showing the executive how you plan on running your core activities more
efficiently instead. Even if you don’t aspire to change your role to Functional, or the
timing isn’t right, you can always do yourself a favor by demonstrating efficiency and cost
control.
Functional
• An HR strategic plan may not be expected of you, but you can create one to show
business awareness and communicate interest in moving to a more strategic role.
• If shifting to a more strategic role is desired, focus your plan on your existing
functional areas, with the addition of one more to give your department a growth path.
Including an initiative around building an HR metrics program is worthwhile as well – you’ll
need as many metrics as you can get as you strategically mature.
• If staying in a Functional role is in the cards for the longer term, focus on augmenting
existing functions and demonstrating the value of those functions to the organization.
Strategic
• A full HR strategic plan is expected of you as a strategic HR department.
• Attach hard numbers in the form of expenditure, savings and metrics. Being a
strategic partner involves not only achieving HR goals, but also those of the organization
as a whole. Each proposed HR initiative should come from a projected business need and
use standard business methods to support the case for doing it.
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Next, set the boundaries of the project by developing an HR
Strategic Planning Project Scope Statement
B
A scope statement is one of the most critical project communication tools
since it sets expectations and itemizes the steps you plan to take.
An HR strategic planning project should be treated no
differently than any other project, thus a scope statement is
critical.
What exactly is a scope statement?
• It places firm boundaries around the HR strategic planning
project, namely what’s included and excluded.
• It lays out clear and common understanding of the HR
strategic planning project into terms of definitions,
milestones and time frames for the purpose of facilitating
communication and setting expectations among and
between stakeholders.
• Finally, it represents a written agreement among the HR
strategic planning team, the HR strategic planning
sponsor, and key stakeholders.
How will a scope statement help you?
• It helps lock down the money, time, and people required
to complete the project.
• It also serves as an effective tool for measuring whether
your project has hit its intended targets.
Use McLean & Company’s HR Strategic Planning
Project Scope Statement Template. It includes:
• Project goals and objectives.
• What is in and out of scope.
• Description of interim and final outputs.
• Resourcing requirements, including project
participants, stakeholders, and their roles.
• Project communication strategy.
• Potential challenges and how they will be overcome.
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Understand HR’s current capability and capacity – know
if you can do the work before you commit to anything
C
Use the McLean & Company HR Capability and Capacity Inventory Tool to
help identify and document all current HR skills, tasks, and projects.
This tool helps you focus on identifying any and all
commitments currently on HR’s plate.
What exactly is a capability and capacity
inventory?
• A place to create a consolidated record of all current
HR tasks and projects, and rank and prioritize projects
according to continued applicability, importance, and
alignment with changing business goals.
• A place to list current knowledge, skills, and
aptitudes on the current HR team. For example,
building a management development program could be
a tall order if you don’t have instructional design and
delivery expertise on staff.
How will this inventory help you?
• Find out if your plate is already full. Taking on new
initiatives may be difficult or impossible without hiring
more HR staff. If an increase in HR headcount isn’t
possible, you may have to drop, scale back, or seek
alternative means to handle something you’re already
doing to make room for anything new.
Use McLean & Company’s HR Capability and
Capacity Inventory Tool. It includes:
• Project inventory and priority assessment.
• HR skills inventory.
Keep the results in mind as you move through the
upcoming SWOT and COPS analyses, and reference your
findings when building the business case for each initiative
your propose.
TIPS for completing this exercise:
• Be honest – only your team will suffer for committing to
an initiative it can’t carry out.
• Be sure to bring the outcome of this assessment to the
table when you do your SWOT analysis (next slide).
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Conduct a SWOT analysis to put your HR inventories into
a broader business environment context
D
Use the McLean & Company HR Strategic Plan SWOT Analysis Template to
help determine what to focus on and how.
This exercise helps you identify the factors that will make it
easier or harder for you to act on your strategic initiatives.
HR Strategic Plan SWOT Analysis
What exactly is a SWOT Analysis?
• It’s a thorough examination of internal and external
factors that affect the organization.
• These factors are labeled as strengths, weaknesses,
opportunities and/or threats depending on the role they
could potentially play in reaching your goals.
How will a SWOT analysis help you?
• Know what trends are playing out in your industry, the
economy and the business environment at large that will
influence business decisions and activities.
• Determine the people, processes, and programs that will
either help or hinder future efforts.
• Bring reality-based facts to the table that business
leadership can appreciate to help justify your decisions.
Conduct your own assessment using
McLean & Company’s HR Strategic Plan
SWOT Analysis Template.
TIPS for completing this exercise:
• Borrow from the SWOT analysis in your organization’s
business strategic plan (if you can get it). Don’t
reinvent the wheel, particularly when identifying
broader industry or economic factors – they should be
the very similar.
• The fresh thinking in your HR SWOT analysis will be
around factors that hurt or help your ability to acquire
or retain the right employees and skills,
management/executive attitudes towards HR issues,
and HR’s ability to get initiatives done.
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Use these guidelines to help interpret and organize your
SWOT analysis
Once SWOT analysis is done…
1
Example SWOT Summary and Related Goals
• Schedule a meeting with your team.
2 • Start with strengths, then move on to the
other three categories.
• Get a consensus on two to four important
strengths and weaknesses of the department
and two to four main opportunities and
threats.
• Record the agreed-upon major SWOTs in the
chart (right).
3 • Turn the major strengths, weaknesses,
opportunities, and threats into goal
statements and action items for the
department.
• Enter these goals in the Goals sections of
the chart.
• When outlining the organization’s
management profile, define these goals in
management terms (to achieve goals, what
capabilities and attitudes are required of the
management team).
D
Strengths
Weaknesses
S-Goals
Enhance reward
program for top
projects to
maintain attrition
and engagement
levels.
W-Goals
Low attrition rate.
High engagement.
Reliant on
specific
individuals with
key skills.
No space
available to
expand
department.
Opportunities
Threats
O-Goals
Cost-out add-in
programs.
Develop add-in
training program
Do recruitment
sessions at local
colleges.
Increase training
opportunities.
Develop mentor
program.
Examine space in
all departments to
identify free
spaces.
T-Goals
Add-in programs
for PowerPoint.
Trend for local
college graduates
to want to remain
in the city which
could improve
access to talent.
Economic
downturn.
Trend for those
under 25 who
refuse to work
overtime.
Conduct an
analysis of
department costs
to find areas to
trim.
Develop over-time
incentive program.
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Finally, do a COPS analysis to determine the current states
of culture, operations, people, and systems
E
Document life as you know it in your organization – the good and the bad.
Resist the temptation to describe the organization you wish you could have.
• A COPS analysis is essentially a diagnostic exercise that
helps you pin down the current realities in your
organization.
• Some of these realities will be advantages, some will be
constraints, and others will be things that you’ll want to
change using the HR strategic initiatives you eventually
select.
• Yet the ultimate goal of the COPS analysis is to establish a
baseline description that will tell you how far you need to
go, how hard you’ll need to work, and how much money
you’ll need to spend to get from where you are today to
where you want to go.
TIPS for completing this exercise:
• This exercise is from the perspective of the HR
department, so leverage the people in your HR team.
There’s no need to bring in other members of
management or the executive (unless you want to).
• You may opt to tackle culture, operations, people, and
systems in separate sessions so that you can stay fully
focused on one at a time and not get distracted.
A full COPS analysis consists
of a current state and future
state assessment.
Use the McLean & Company
COPS Analysis Worksheet
to carry out the current state analysis
described here so that you can easily
record your thoughts.
In the next section of this report, you will
use this same tool to conduct a target state
COPS analysis.
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After conducting a current state COPS analysis, many
organizations find that the following descriptions fit well
E
Small Organization
Medium Organization
Large Organization
Culture
Culture is probably consistent, but
still malleable and developing. You
don’t yet track employee
engagement.
Culture may be fragmented across
departments – it will be harder to
pinpoint due to strong subcultures
that aren’t aligned with the primary
culture. You’ve started to formally
track employee engagement.
Prevailing culture has been in
place for a long time and will be
easy to interpret. You formally track
and act on employee engagement.
Operations
Probably operationally immature –
most policies and procedures are
not formalized in writing, and how
things are done are left to
individual judgment.
Efforts made on implementing
standards. Numerous policies and
procedures in place, but the
organization has likely undergone
change and transition, so
standards may be out of date or
need to be updated frequently.
Operationally mature. Standards,
policies, and procedure are well
established
People
Job roles and accountabilities are
in constant flux. You may be
under-skilled in several areas,
particularly in management and
leadership. There’s little or no
formal employee development or
incentives plans.
Formalized job roles and
accountabilities, but some of them
are out of date. You have some
formal employee development and
incentives plans, but they can be a
bit generic and not everyone is
benefitting from it.
Well-established job roles and
accountabilities. You also have
formal development programs for
high potential employees and
succession management in place,
but some areas may be too rigid.
Systems
Loosely defined or absent.
Performance appraisal is your
most solid area.
Some systems are well-defined,
but consistency is spotty. Talent
acquisition and onboarding are
areas of focus, as is development.
Mature and well-defined. They may
be too traditional for current
changes in workforce
demographics.
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Assess: The HR manager of a young manufacturing firm
assesses the company’s business goals and HR capability
Company Description
• A five-year-old specialized manufacturing firm that supplies
processor chips to the automotive industry.
• Approximately 180 non-unionized employees:
◦
◦
Majority of staff is unskilled manufacturing labor.
Additional staff include software engineers and product
developers, IT, sales, shipping/logistics, management, and
administration.
• Revenues in 2011: $35,000,000
• Demand for their specialized product has grown significantly
in the past two years. Have experienced significant increases
in both revenue and headcount. This growth is expected to
continue into the foreseeable future.
Business Strategic Goals
• In order to support continued high
growth, increased operational stability
and maturity is the primary goal for the
next year.
• Hiring for all roles is required.
• HR has a substantial role to play in
achieving this goal through
standardizing workforce management
processes and programs, as well as
strengthening its recruiting engine.
HR Description
• HR consists of three staff, all from HR generalist backgrounds.
• The HR department matches the Administrative persona. It handles recruiting, payroll/benefits, and workforce scheduling.
Sufficient performance management activities are being carried out.
• No major projects are in play. The focus is almost exclusively on day-to-day operations.
• Given significant recent increases in headcount and an evolving workforce, HR is barely keeping up with its administrative
duties.
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Assess continued: HR works through the SWOT and COPS
analyses to establish a complete picture of current state
SWOT Analysis
Current State COPS Analysis
Strengths
Culture
•
•
•
•
• Staff are tight-knit. Most don’t feel empowered.
• Management style leans towards “top down,” which
Limited competition – niche product.
Very strong post-recession economic growth.
Largely unskilled manual labor required – commodity.
HR – Expertise in workforce scheduling/planning,
performance management, and policy management.
Weaknesses
• Operational inexperience – young management team.
• HR – Low/no expertise in compensation planning.
Limited profile in the organization.
Opportunities
• New chip product under development.
• Option to sell to non-automotive industry buyers.
• HR – Policy management expertise yet to be tapped.
Threats
• Owner-operated – controlling personality.
• Location is rural – limited talent pool available.
• Connection to automotive industry has driven rumors
of unionization amongst manufacturing floor staff.
• HR – None.
has created disconnection with staff (i.e. us vs. them).
• Quality is king, but innovation is limited to product
development teams.
Operations
• Structure and roles are defined, but are being
outgrown. Lack of flexibility is a hindrance.
• Productivity is important, but there are few metrics.
• Formal policies/procedures are few.
• There are no formal forecasting tools in place.
People
• Job knowledge, skills, and understanding of
performance expectations are good.
• There is no coaching or development in place.
• No incentives are available for non-managers.
Systems
• A basic performance appraisal program is in place.
There is recruiting competency, but no formal strategy.
• No other formal systems exist.
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Envision the Future State of HR
What’s in this Section:
• Conduct a target state COPS Analysis.
• Create a shortlist of proposed changes.
• Carry out a Gap Analysis to understand the
distance between your current and target states.
Sections:
Make the Case
Collect Strategic Plan Inputs
Assess the Current State of HR
Envision the Future State of HR
Develop and Prioritize Key
Initiatives
Set Measures and Evaluate
Progress
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The second step in HR strategic planning is to envision a
future target state – decide what you can realistically aspire to
This is your opportunity to think big and bring the best ideas forward before
reining them in for practical application in the real world.
Inputs
Business
Plan
+
Key
Events
+
HR
Trends
Key Steps in the Envision Phase
Assess the Current State
2
A.
A
• Effort: 4–6 hours
Envision the Future State
B.
B
Develop Initiatives and Tactics
Evaluate the Progress
Conduct a target state COPS Analysis
to identify change goals for the future
Conduct a Gap Analysis between
current state and target state
• Effort: 3–4 hours
The outcomes of the target state COPS
analysis will be directly summarized in the
“Gaps in HR” section of your final HR
Strategic Plan document.
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With current state identified, determine the projected target
state of HR programs and practice using COPS
A
The goal of this exercise is to imagine what your organization and its HR
programs and practices could look like if additional investment was made.
• Conduct a brainstorming session; it’s the best way to
get all of the great ideas out on the table.
• Include your HR team and leaders from across the
organization to get multiple points of view.
• Pull out the results of your latest employee
engagement survey, if you have one, since it can identify
the areas most in need of improvement from the
employees’ point of view.
For each factor you explore under each
COPS area, ask:
1. Do we want to change it?
2. What would that change look like?
3. What would be the positive and
negative impacts of that change?
TIPS for completing this exercise:
• Keep an open mind. It will be tempting to shut down some
ideas early because they seem unrealistic, but avoid
doing so at this point.
o Without realizing it, you or your colleagues may have
adopted a conservative or negative outlook because
you’ve been told “no” often in the past or had trouble
getting buy-in. Worry about short-listing achievable
initiatives later.
o Even the craziest ideas might contain a nugget you can
use – so don’t reject any ideas yet.
To start exploring what
you want the future target
state of your organization to
look like, return to McLean &
Company’s COPS Analysis Workbook.
• Leave no stone unturned!
McLean & Company
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After conducting a target state COPS analysis, many
organizations opt to make changes in the following areas
Small Organization
Medium Organization
A
Large Organization
Culture
Set values, vision and mission
statements. Think carefully about
the kind of people you want to hire
to ensure they fit with and reinforce
your chosen culture.
Bring subcultures into closer
alignment with the prevailing
culture to avoid disengagement.
Make sure you’re actually acting
on employee engagement
tracking.
Consider how your culture looks to
potential recruits (e.g. Generation
Y). Is it attractive? Does it need
some refreshing? Review your
employer brand.
Operations
Document basic policies and start
selling managers early on why
compliance and enforcement is
important.
Refresh policies and procedures
to bring everything up to date.
Formally assign policy and
procedure administration. Start
tracking a small, core set of HR
metrics.
Look for ways to increase
operational efficiency. A formal HR
metrics and reporting program is
strongly recommended.
People
Start building capabilities lists that
you can use to inform your hiring
and performance management
activities in the short and long
term. Build formal job descriptions.
Consider a reorganization with an
eye to flexibility. Understand the
different types of employees, what
motivates them, and what they
need in order to tailor your
development and incentives
programs.
You may have become out of touch
with what front line employees are
doing day to day. Conduct a
detailed job analysis to deepen and
reset the top-level perspective.
Systems
Nail down your performance
management system and ensure
managers are applying it
consistently. Start formalizing your
recruiting and onboarding
practices.
Implement long-term workforce
planning and succession planning
for key roles. Build a more mature
and targeted development
program. Integrate systems and
enforce consistent application.
Study external trends in workforce
demographics (e.g. Generation Y)
and plan to update your systems
more frequently to remain
competitive with smaller, “hipper,”
or more nimble organizations.
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Now that you know where you are and things you might
want to change, it’s time to set your target state in stone
A
Pare back on your “blue sky” ideas with a dose of reality. Your ideal
“organization of the future” just might be too far away.
Bring out the business strategic plan. Trim out change ideas from the future state COPS analysis that are not aligned
with the business plan.
 Example: You want to sharpen your employer brand, but initiatives on the business strategic plan are about cost
control. Hiring is not prominently featured, so there’s little appetite for investing in attracting recruits.
Start prioritizing changes on your shortlist that are most important to the business.
 Example: A new product launch is on the horizon. Hiring a new marketing manager to fill a current vacancy trumps all
other needs in terms of urgency.
Next, look at your SWOT analysis. What will impact your ability to achieve the shortlist of changes from your future state
COPS analysis? If challenges are severe enough, you may opt to remove some changes as contenders. Otherwise, be
prepared to do a lot of work, or even fail.
 Example: Your HRIS is five years old. Recent headcount growth has it at capacity. However, your company is ripe for
acquisition – investment in new software that may be supplanted by that of a new parent company may be a waste.
Finally, draw up a description of final target future state. You’ve stripped away the proposed changes that aren’t
important or feasible. Now imagine that if the remaining changes were successfully implemented what the new
organization would look like. You can use COPS headings and bullet points for this description.
It’s worthwhile to describe your target state side-by-side with your
current state so that you and others can see the magnitude of the
changes (and improvements) that you’re proposing. This
approach will prove helpful in your upcoming Gap Analysis.
Use the “State Description”
Tab in the McLean & Company
COPS Analysis Workbook to capture the
descriptions of your organization.
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Conduct a gap analysis between current and target state to
forecast the amount of work involved in making changes
B
Some changes will be harder to make than others, and will require more
expertise, time, and money to turn into a reality.
For each change you’re proposing to reach your target state, assess and document the following. This
information will be important for any business cases you need to present in the final HR strategic plan.
Expertise
What skills and knowledge need to be developed or acquired by
HR staff, the management or leadership team, and regular
employees to make the change?
Achieve this by developing existing staff, hiring new staff,
outsourcing the expertise, or using a mix of all three methods.
Time
How long will the change take to implement in its entirety in
terms of both absolute people hours and relative calendar days?
Determine if the change be broken down into smaller, shorter
milestones.
Determine whether pieces of the change can be tackled
concurrently, or if it must be done in linear sequence.
Money
How much money will it cost to make the change? What will
need to be purchased or sourced?
Calculate the salary costs of the people working on the change.
Identify the predicted long-term ownership costs of anything new
that will be implemented (e.g. maintenance and administration).
Take a conservative
approach when
making estimations.
Assume everything will
require more expertise,
more time, and more
money than first glance
indicates. Initiatives that
seem to require less
investment may pass the
approval process with
greater ease, but your
credibility will be hurt if
you’ve underestimated
the investment required
or misrepresented the
truth.
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Grab the low-hanging fruit identified in the gap analysis –
some changes won’t require permission or investment
B
While most major changes will require some degree of approval and
planning, some quick wins may also emerge from the gap analysis exercise.
Based on the gap analysis, label
each item as one of the following:
Traversing a gap requires some combination of time, skills, and
money. The various gap levels are defined by each of the three factors.
• A minor gap between current and
• A minor gap takes very little or no time, skills, or money.
target
• A moderate gap between current
and target
• A major gap between current and
target.
• A moderate gap may take some to above average investment of one
or two of time, skills, and money, but probably not significant amounts
of all three together.
• A major gap will require substantial investment across all three of
time, skills, and money.
Next, triage the proposed changes in the following way:
1. Minor gaps can be turned around quickly as long as they are not dependent on other changes or, when implemented,
will not create new gaps in other areas.
o Free and clear minor changes are the low-hanging fruit mentioned above. You may be able to address these easily
without escalating them to your strategic plan.
2. Mission-critical changes should be prioritized if they are central to achieving high priority business goals, regardless
of the gap size between current and target state.
3. Gaps that are impacting a high number of other areas should be identified. By addressing them, a wide range of
problems would be solved. Prioritize these next.
4. Finally, list the remaining gaps in the order of minor gap, moderate gap, and major gap.
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43
Envision: The HR team in the chip manufacturing firm
envisions its target state and what it will take to get there
Target State COPS Analysis (
= Priority)
Culture
• Open communication and trust exists between
management and staff.
• Staff feel empowered to bring improvement ideas to the
table.
Operations
• Structure is defined. Job roles are defined, but flexible.
• Productivity metrics are established, tracked, analyzed,
and acted on.
• Formal policies and procedures are in place.
• Basic sales forecasting tools are used to predict volume
and future staffing requirements.
People
• The right people with the right skills are in place.
• Regular performance coaching is in place.
• Incentives are in place for all employees based on
company performance and achievement of quality,
productivity and revenue targets.
Systems
• A rigorous performance management program is in place.
• A talent sourcing and selection strategy is in place.
• A new hire onboarding and orientation program is in place.
Gap Analysis
Culture: Major gap
• While relations between staff and management are not
hostile, management is traditional and authoritarian. Buyin for change will be tough.
Operations: Minor gap
• Productivity metrics required are few and simple.
• Only basic policies and procedures required. Knowledge
required to create these is sufficient.
People: Major gap
• The local talent pool is running dry. It will be challenging
to convince recruits from more populated areas to work in
the rural location, let alone ensuring that those who don’t
wish to move can get to work on time everyday.
• Implementing coaching relies on cultural change.
• The company owner is not fond of incentives.
Systems: Moderate gap
• Developing a sourcing strategy will require research and
creativity, and execution will require some determination,
but selection skills are solid.
• Developing other basic programs is a factor of time
investment vs. skill.
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44
Develop and Prioritize Key Initiatives
What’s in this Section:
• Explore logistical issues with achieving proposed
changes.
• Identify estimated costs to implement proposed
changes.
• Identify your final list of HR strategic initiatives and
build business cases for each.
• Document your analysis and initiatives in an HR
strategic plan.
Sections:
Make the Case
Collect Strategic Plan Inputs
Assess the Current State of HR
Envision the Future State of HR
Develop and Prioritize Key
Initiatives
Set Measures and Evaluate
Progress
McLean & Company
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The third stage in the strategic planning process is to finalize
your list of initiatives and develop your final plan
This is where your hard work takes a concrete form. Your final plan will
ultimately be presented to the executive team for approval.
Five Key Steps in the Assess Phase
Inputs
Business
Plan
+
Key
Events
+
HR
Trends
A.
A
Convert your proposed changes into
tangible initiatives
• Effort: 3–4 hours
A.
B
Assess the Current State
Build a business case for each
initiative
• Effort: 4 hours per initiative
3
Envision the Future State
C
Develop Initiatives and Tactics
D
Develop the final HR strategic plan
• Effort: 3–4 hours
Get executive buy-in on the final plan
• Effort: 1–2 hours
Evaluate the Progress
The outcomes of the building a business
case exercise will be directly summarized in
the HR Strategic Plan document you create
during this stage.
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Convert your proposed and prioritized changes into tangible
initiatives – any logistical issues will soon come to the fore
A
You know what you want to change and what those changes will look like
when implemented – how to make those changes requires tactical thinking.
Hold a series of team brainstorming sessions. Your goal is to develop concrete solutions to making changes that will close the
gap between current and target state. This exercise will help determine each change’s logistical feasibility, namely:
• If tackling all the proposed changes on your shortlist means that you’ll be biting off more than you can chew.
• If there are logistical complexities that will make change implementation too challenging at this point.
For each shortlisted change, think through how each change would be planned as a project:
• Identify the steps required to implement the change.
◦
◦
List all the activities and milestones involved. For example, implementing an HR policy portfolio involves shortlisting
required policies, prioritizing policies to be developed, conducting research, writing drafts, reviewing drafts, and so on.
Calculate how many hours should be invested in each step to complete it. For example, developing the presentation for
a coaching training module could take 30 FTE hours.
• Identify the interdependencies of each step of each change.
◦
◦
Determine what must be done first before tackling other steps. For example, managers must be trained on a new
compensation plan before employees are notified.
Determine what impact interdependencies have on timelines. For example, two HR staff can work on two policies
concurrently (shortening timelines), but the single reviewer for all policies can only look at one at a time sequentially.
• Identify the people and skills required to implement the change at each step.
◦
◦
Determine if you have the people you need. For example, you will need IT expertise if implementing a new HR
Information System.
Make sure key people won’t be spread too thin or unavailable if you have them tackle changes at the same time. For
example, you only have one person with development expertise, but are creating five training initiatives concurrently.
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Next, figure out what it will cost to get each change off the
ground and weigh it against benefits to build a business case
B
Costs may determine whether an initiative is approved. While a change may
be important to the business, some people just can’t get past the numbers.
The logistics exercise you just completed may have knocked some proposed changes off the list because you’re too far away
from getting the time and people resources you need, or they’re just too complex to be realistic. With your new condensed
shortlist, check the fiscal feasibility of each remaining change, namely:
• If some changes can be easily absorbed with minimal or no additional costs.
• If some changes will require a significant financial investment.
• If some changes will force you to sacrifice other money-making or money-saving activities.
For each change on the shortlist:
• Estimate the people costs:
◦
◦
Time required for an individual staff member to make the change
multiplied by their hourly earnings.
Costs to acquire needed skills through creating and hiring into a new
role, or outsourcing change-related tasks.
• Estimate the purchase or acquisition costs:
◦
◦
Cost to procure and implement required technologies, such as a
Learning Management System or Talent Acquisition System.
Cost to procure any content-based information or tools, such as
assessments or learning modules.
• Estimate the opportunity costs. If you choose to pursue a given change,
Don’t forget about risk!
Some changes may have adverse
effects, such as a short-term drop
in employee engagement that results in
increased employee turnover. These
are costs in their own right.
Predicting these potential costs and
expressing them as hard dollar values
may be hard. At the very least, be ready
to itemize them as risks and include any
risk mitigation strategies that help avoid
their associated costs.
are there other things you will no longer be able to do or have to bypass?
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Build a business case for each initiative to clearly explain the
goals, solution, and impact of the HR strategic initiative
The business case for each of the identified HR initiatives should include the
following four items:
1. Assumptions and Methods
List all assumptions, scope and boundaries, and information sources you plan to
use. Also describe various scenarios based on different actions taken, including what
would happen if it was “business as usual” and nothing was done at all.
2. Business Impacts
Show a top-level cash flow for each scenario – benefits, expenses, and assets –
project over multiple years. Use charts and graphs to highlight these items more
effectively.
3. Sensitivity and Risks
Spell out the risks and contingency plans if the assumptions you’ve made turned out
not to be accurate or true. Risk analysis is always welcomed by senior management.
4. Conclusions and Recommendations
Ensure that you reiterate business objectives, outline all decision criteria included,
and explicitly state the results and findings. Recommendations must be concise, but
should formally state how you think the organization should proceed.
Doing financial calculations can be daunting. Talk to your Finance
department to find out what methods the organization uses to calculate
the relative costs and benefits investments, and arrange for a tutorial.
Use McLean &
Company’s HR
Initiative Business Case Template
to guide the documentation of the
business case for each initiative.
Leveraging this template will help
you build a defensible business
rationale for each initiative.
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With a final shortlist of initiatives in hand, use this checklist
to confirm that you’ve done your analysis thoroughly
C
Before you draft your final HR strategic plan document, make sure one last
time that you’re not wasting effort on the wrong initiatives.
 Have the objectives and benefits of each initiative been outlined?
 Do the strategic initiatives recognize the organization’s strengths and weakness?
 Are the strategic initiatives relevant to the organization’s position in the external market, including any
opportunities or threats? For example, do they consider competitor positions, organizational size, and
financial strength?
 Will employees throughout the company understand how these initiatives affect them, and how they as
employees contribute independently and collectively to the defined initiatives?
 Are the strategic initiatives realistic and feasible?
 Have timelines for benchmarking progress and targets for completing initiatives been set?
 Will the organization realistically be able to identify the success or lack of success in the
accomplishment of strategic initiatives in some quantitative fashion?
 Can the strategic initiatives be linked back to the company’s overall strategy?
If you answer “no” to any of these questions, you’ll need to either collect and document the
appropriate information so that you can honestly answer “yes,” or else strongly consider dropping
the initiative from your shortlist.
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Use the McLean & Company HR Strategic Plan Template
to formalize the information gathered in this process
C
This template comes in Word and PowerPoint form. The Word form is for
documenting and the PowerPoint format is for presenting to the executive.
Use the Word template to:
Use the PowerPoint template to:
• Consolidate the HR strategic
plan into an easily presentable
format.
• Document the results of SWOT
Analysis.
• Document the results of the COPS
Analysis.
• Communicate the key HR
initiatives to the executive and
illustrate how they connect to
business goals.
• Describe key HR initiatives
chosen to be included in the
Strategic plan.
• Describe ways in which the
success of each initiative will
be measured and tracked.
• Record milestones associated
with each HR initiative.
McLean & Company’s
HR Strategic Plan Template
Remember: The PowerPoint template is a parsed-down version of the Word document, and is designed
to convey only the highest-level concepts that are important to the executive. Make sure to use traditional
business language for easier consumption by the executive.
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Communicate the HR strategic plan to the executive to get
buy-in and approval to proceed
D
Present to the executive using the PowerPoint version of your HR strategic
plan – be simple, clear, and concise.
• When the HR strategic plan has been developed, it must be
communicated to all key stakeholders.
• Many stakeholders will not have the time or inclination to read the whole
plan, and may not remember exactly why the planning effort happened in
the first place. A pared down PowerPoint version will help to organize the
plan into consumable chunks.
• Planning the key messages you will deliver will help in raising the plan’s
profile and gaining buy-in for its execution.
Key messages should include:
 Business priorities
 A list of the strategic, core, and non-core roles required for meeting
business priorities
 The gap between where the department is now and where it needs to be
 Your Strategic HR Priorities Chart
 The proposed strategic initiatives
While all aspects of the presentation are
important, be sure to cover these specific
points:
 Implications of not closing the gaps
 Areas that require the greatest
amount of support from executives
 Time line to implement
 Impact on current staff (due to
staffing changes that would be
made as a result of the
departmental review)
 Expected costs (additional hires,
costs associated with extra
recruitment, development and
retention efforts)
Depending on where your gaps are, implementing the recommendations may seem like an expensive endeavor
to your executive team. Be sure to stress how much more efficient the team will be at meeting business
objectives once the right people are on the bus, headed in the right direction.
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Develop: The HR team shortlists its strategic initiatives and
starts building business cases for the formal strategic plan
HR’s Reality Check:
• The HR team knows it can’t do all of the proposed changes, but that operational efficiency and recruitment are pressing.
• However, they also realize that investing extra effort now to put things in place that will create efficiencies will eventually
free their time for other things and create a foundation for more advanced HR programming in the future.
• The HR team decides it will create full-scale business cases for four proposed strategic initiatives for the upcoming year.
Create core policies and
procedures to build
operational foundation.
• Start with policies and
procedures mandated by
labor laws.
• Follow with policies
related to attendance
and leave, hiring, and
performance
management.
Cost: 50 HR staff hours
and 15 manager hours over
four months.
Establish a productivity
metrics program to
assess efficiency and
provide employee
evaluation metrics.
• Work with manufacturing
floor managers to
shortlist three to five
productivity measures.
• Tie measures to existing
employee performance
appraisal tools.
• Implement metrics
tracking tool.
Cost: Ten HR staff hours
and five manager hours
over one month; $500 for
basic metrics tracking tool
Create a small-scale
incentives program to
help attract and retain
employees.
• Implement a tiered cash
rewards system for both
teams and individuals for
hitting quality and
escalating productivity
levels.
• Create a transportation
support program for “out
of town” staff.
Cost: Ten HR staff hours
over two months; $60,000
per year for cash incentives;
$25,000 per year for
transportation support.
Develop a formal talent
sourcing strategy.
• Develop a marketable
employer brand focused
on incentives and
positive coworker
relationships.
• Focus recruitment
activities in neighboring
urban locations – events,
media.
Cost: 60 HR staff hours
over six months; $5,000 for
events and media.
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Set Measures and Evaluate Progress
What’s in this Section:
• Set project-based milestones for all HR strategic
initiatives documented in your plan.
• Select measures for each initiative that will allow
you to track progress toward success.
• Implement methods for HR strategic plan
maintenance and updates during the plan’s lifetime.
Sections:
Make the Case
Collect Strategic Plan Inputs
Assess the Current State of HR
Envision the Future State of HR
Develop and Prioritize Key
Initiatives
Set Measures and Evaluate
Progress
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The fourth step in HR strategic planning is to evaluate
progress of the initiatives and the overall plan
HR strategic planning is not a “one and done” process. Establish metrics to
determine ongoing progress and overall success.
Inputs
Business
Plan
+
Key
Events
Key Steps in the Evaluate Phase
+
HR
Trends
Assess the Current State
A.
A
B
Review milestones for each initiative.
• Effort: 3–4 hours
Establish and communicate success
measures for each initiative.
• Effort: 3–4 hours
Envision the Future State
C
• Effort: 1–2 hours
Develop Initiatives and Tactics
D
4
Evaluate the Progress
Implement an HR strategic plan
maintenance process.
Schedule review and revise sessions
with key stakeholders.
• Effort: Ongoing
The identified progress measures will be
listed in the Evaluate section of your HR
strategic plan template.
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For each key initiative, set milestones to allow for proper
resource scheduling
A
Now that your HR strategic plan has been approved, set final milestones for
each initiative to help establish progress measures.
What are they:
Keep in mind:
• Milestones are projected deadlines or completion
dates for each strategic initiative. They are based
upon the business objectives and goals.
• When establishing milestones, it is important to
ensure that your milestones always align with
corporate objectives.
• Setting major milestones for the HR organization
establishes key delivery dates where technologies,
solutions, and capabilities will be ready.
• These dates represent the HR organization’s
commitments to the enterprise and can be used by
the company to refine the corporate strategic plan.
For example:
Business Goal: Improve regulatory compliance.
Potential HR Contribution: Improve communication and
enforcement of labor-related regulations.
HR Weakness: HR’s policy portfolio is out of date.
Potential HR Initiative: Bring the portfolio up to date and
communicate it fully to bring about changes in
management’s compliance behavior.
Initiative Milestone: Start process in April 2012 and
finish process by June 2012 (3 months).
Use McLean &
Company’s HR Strategic
Initiative Tracking Tool to document
the milestones, projected
deadlines, resource requirements,
and success measures for each of
your strategic initiatives.
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Use this guideline to help document and communicate the
milestones of key HR initiatives
A
Organize the milestones in this type of high-level format to help establish
scheduling and communication of initiative goals and effort required.
List or describe the milestones that must
be completed for each initiative.
Initiative
List key
HR
initiatives.
Increase efforts to
brand Company
ABC as a great
place to work
List projected milestone dates for each of
the identified initiatives.
Milestones
Estimated
Milestone
Completion Date
Total HR Hours
Required
Review employee
engagement survey
Apr ‘1x
3,200 Hours
Interview executive about
perception of culture
May ‘1x
1,440 Hours
Interview employees about
perception of culture
Dec ‘1x
9,600 Hours
Develop Company ABC’s
“value proposition”
Jun ‘1x
6,400 Hours
Estimate the
amount of
HR effort
that will be
required to
reach each
milestone.
In order to determine HR strategic plan progress you must first show the timing of the different initiatives, as well as
the projected cost and effort required to complete or achieve each initiative.
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Plot the milestones and their associated initiatives on a
Gantt chart to help resource scheduling and communication
Example Gantt Chart: ABC Company Preliminary
Gantt Chart
Gantt Chart
•
•
A
Once you have established the
milestones and resources allotted
to each initiative, plot them on a
Gantt chart to assist in
communication to your team and
the stakeholders.
This also provides you with a
useful visual when planning out
the upcoming year and keeping
track of the resources available.
J F M A M J J A S O N D
Increase
efforts to brand
Improve
Management
Development
Program
Record the
number of
employees
dedicated.
3 FTE
2 FTE
Conduct equity
analysis
List key
HR
initiatives.
Reduce risk
related to noncompliance
4 FTE
2 FTE
Block off
the number
of months
allocated.
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Select metrics that directly evaluate HR’s role in achieving
a specific business strategy goal
B
HR can only determine its value to the organizational goals by measuring it.
Take these steps to select the metrics that are right for you.
Key Steps in Selecting Metrics…
Example…
1. Brainstorm metrics that fulfill two criteria:
• Show how each of the initiatives being measured
affects the business.
• You have the ability to impact or influence the outcome
of those metrics
2. Narrow down the list:
• Focus on a few key metrics that are most relevant to the
initiative and its goal.
• Choose the ones you can track readily and around which
you can build programs or efforts to drive the results.
3. Agree on the list with business leaders:
• Test the list with business stakeholders to solicit their
feedback.
• Check if the metrics meet their “so what?” test.
• Once you’ve done that, you’re ready to start tracking,
reporting, and using metrics effectively!
Business Goal: Develop innovative products.
Potential HR Contribution: Recruit fresh and
creative individuals into key roles.
HR Opportunity: Launch a social media recruiting
program leveraging existing expertise in Marketing.
Potential HR Initiative: Build a LinkedIn
organizational profile to target innovation-oriented
candidates.
Potential HR Metrics:
• The number of candidates hired via the LinkedIn
Profile
HR can only determine its value to the organization by
measuring it. Otherwise it’s all just guesswork.
- Former HR Director, Insurance Industry
• The performance levels of the candidates hired
via the LinkedIn Profile
• The overall success of all new hires.
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Use these guidelines to document each HR initiative and its
connection to both the business goal and success measure
B
This type of format will not only allow you to keep track of each measure and
its associated business goal, but it will also help illustrate it for the executive
List the HR initiative that is
directly linked to the specific
business goal.
Business Goal
List each
business
goal that
has a
determined
HR initiative
associated
with it.
HR Initiative
Document the success measure
chosen to evaluate the initiative.
HR Initiative
Success Measure
Increase retention of
new hires by 50%
Increase efforts to
brand ABC as a
great place to work
Retention rate at six
months, engagement
survey
Improve
Organizational
Management
Competencies
Improve
Management
Development
Program
Manager
performance
appraisal
Results
Record the
results of
each
initiative.
Make sure to have clear success levels in place for each measure selected before results are finalized.
Sometimes simply seeing improvement isn’t enough. Determine HOW much improvement will be deemed
as successful.
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Establish an HR strategic maintenance planning process to
guide any changes that occur along the way
C
Keep things on track by using the three R’s of strategic plan maintenance:
Refresh, Report, and Respond
Strategy Maintenance Planning Process
Refresh
Assess the progress and assumption of the HR
strategy and revise/realign it to accommodate
changing business priorities, key events, and to reflect
new value opportunities.
Refresh
Report
Respond
Provide information regarding the current status of all
HR activities, accomplishments, and highlight issues
and concerns for management consideration.
Respond
Report
Accommodate critical and immediate business
requests for HR service, and evaluate business
requirements and reprioritize strategic programs as
required.
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Updates and changes to the HR strategic plan are inevitable
– use these guidelines to make those changes go smoothly
D
The major deliverables and timing of each process are summarized below:
Process
Refresh
Report
Respond
Deliverables
Timing

Adjusted HR priorities

Adjustments to forecasted plans, including non-discretionary budgets and
allocation for discretionary, minor enhancements
Quarterly

For strategic initiatives – report progress to the schedule (i.e. how well
programs are tracking to planned completion)

Report progress to budget (i.e. how well capital, expense, and effort spending
are tracked to the plan)

Quality

Forecasting (i.e. how current progress will affect requirements for projects
and activities over the near and long term)

Concerns and issues for management consideration

New or altered HR strategic programs and projects

Updated implementation plans to reflect new or changed imperatives,
strategies, and programs and priorities
Monthly
Ad hoc
between
refresh
cycles
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Summary
• Increasing the strategic role of the HR department is not only a priority for a lot of HR leaders, but it
has become a top priority for the business executive as well.
• This will result in additional demands for the HR leader to demonstrate the strategic nature of their HR
department and how they can contribute to the overall business goals.
• The development of a formal HR strategic plan will not only demonstrate HR’s ability to act
strategically, but it will also improve the HR department’s overall efficiency and preparedness.
• The HR leader can’t do it alone. A successful HR strategic plan must be based directly upon the overall
business plan and be aligned with specific business goals.
• The HR strategic plan must take into account three key inputs: the business plan, key events, and
current HR trends.
• Then, the HR strategic plan should be built upon four key steps: Assess, Envision, Develop, and
Evaluate. Each of these steps will move the HR department closer to being a direct contributor to specific
business goals.
• Once the formal HR strategic plan is in place, the process isn’t over. Continual evaluation of progress
and updating of initiatives will allow for continued strategic success for the HR department.
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Appendix
What’s in this Section:
• Works Cited
• Research Methodology
Sections:
.
.
.
.
.
.
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Works Cited
• Frank Hawkins Kenan Institute of Private Enterprise, Six Disruptive Disturbing Trends the 2010 Census Will Reveal, 2010,
www.kenaninstitute.unc.edu/Census2010Trends
• Mercer, What’s Working survey, 2011, http://www.mercer.com/press-releases/1418665
• NAS Recruitment Communications, Generation Y: The Millennials. Ready or Not, Here They Come, 2006,
http://www.scribd.com/doc/2607132/GENERATION-Y-THE-MILLENNIALS
• SHRM, Survey: Work/Life Balance Off-Kilter in U.S. , 2010,
http://www.shrm.org/Publications/HRNews/Pages/WorkLifeOffKilter.aspx
• SHRM, So You Want To Be Strategic? What Next?, 2007, http://www.shrm.org/hrdisciplines/Pages/CMS_017579.aspx
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Research Methodology
• In February and March of 2012, McLean & Company conducted five in-depth interviews
with a line of business manager, executives, HR consultants, and a leadership expert to
learn about their HR strategic planning process.
• During the same time frame, McLean & Company fielded a survey to better understand
specific HR strategic plan practices and trends. The survey attracted 134 respondents.
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