HR strategic planning: 5 tips to avoid failing

Many companies do their HR strategic planning 3 or 4 months before the end of the year.

Each manager responsible for the company’s areas must understand their department’s needs and deliver what should go into the HR budget and strategic plan.

The HR budget is highly complex, because it must include people planning for the next year, salary increases from collective bargaining and succession, dismissals, and provisions for the 13th salary and vacation pay.

On top of that, there are the benefits every employee is entitled to, the amount set aside to pay a variable compensation bonus, and everything the area needs, such as essential tools for good management.

We have brought an example of HR strategic planning so you can understand what to consider when submitting an HR budget that covers every process.

A strategic HR needs good HR strategic planning to manage people well, increasing employee engagement and productivity.

The right time to do HR strategic planning

Budget planning is usually done at the end of the fiscal year, based on the previous year’s history. But often it also draws on earlier years, adding the company’s expectations and needs for the next year.

When it comes to the Human Resources area, by this time salary matters, hiring and dismissals should already be defined and agreed with employees and those responsible.

That is why you should also study the area’s vision for the next year, the points of evolution and the inputs the company must provide for it.

Because it is a busy time, with payroll closing, variable compensation payments and other demands on the area, it is essential not to forget any detail.

Also read: 7 strategic planning tools and systems for your company!

If a detail is forgotten, something necessary may be missing and the area may miss its goal next year.

The HR area is increasingly analytical and driven by numbers, and it is also tied to the company’s goal cascading.

So a good example of HR strategic planning should include the ROI (Return on Investment) calculation for hiring tools that make these processes faster and give employees more time to focus on other tasks.

See how a good HR manager’s mind should work:

HR strategic planning example: what to consider?

We made a list of everything that should be in HR strategic planning, so you can build your budget. Check it out:

1. Salaries

In the HR budget, one of the main components is salary planningopens in a new tab (in Portuguese). You should consider not only existing salaries, but also:

• Upcoming hires;
• Salary increases;
• Succession;
• Strategic compensation.opens in a new tab

Learn everything about strategic and variable compensation (video in Portuguese):

2. Payroll charges

Payroll charges make up a good part of the budget too, and sometimes they are not given due importance. Among their elements are:

• 13th salary;
• Vacation pay;
• FGTS (Brazil’s severance fund);
• Severance payments;
• Collective bargaining adjustment (dissídio)opens in a new tab (in Portuguese);
• Education salary contribution;
• INSS (Brazil’s social security contribution).

3. Benefits

The company is required to provide benefits, and they are also adjusted every year. They can include:

• Meal vouchers;
• Transportation vouchers;
• Medical and dental plans;
• Childcare allowance;
• Food basket;
• Culture voucher.

Also read: Strategic HR: a complete guide to implementing it in your company!

4. Training and development

In this item, which is also an HR responsibility, we have:

• Consulting;
• Financial incentives for studies;
• Coaching and career mentoring.

5. Spending on materials and technology

These should also be included in the provisioning, for example:

• Recruiting materials and welcome kits for new hires;
• Paid job boards;
• Data storage;
• Software for the area.

Feel free to use this example of HR strategic planning to build your area’s budget.

Company expectations: the HR action plan

As for the whole company, the HR budget is built from a few criteria, such as:

• Scenario analysis, from the history of previous years to the threats and opportunities for the area;
• Investment plan for the area;
• Financial feasibility analysis;
• Alignment with the company’s strategic planning.

HR strategic planning determines where the company wants to be in the coming years.

That is why every area must be aligned with it.

When planning the budget, everyone should think about how their area will take responsibility for achieving that plan.

Based on the company’s goals, it is essential for HR to take a large part. After all, it is responsible for people planning, together with the managers’ needs.

It is also responsible for the organizational cultureopens in a new tab the company wants to convey.

So this department needs to create an HR action plan.

In it, the company’s expectations for the year should be considered in every action employees take.

That keeps thinking more focused on the long term, and people work with a final objective in mind for each of their activities.

That way, HR strategic planning should cover each of these objectives when developing the budget.

Watch this video and see how to build an excellent action plan (in Portuguese):

With Stratwsopens in a new tab, from Siteware, a simple, easy-to-use corporate performance management software, you can integrate people, operations and strategy.

Besides tracking indicators, the software has special features for the Human Resources sector, such as:

• Performance review cycles
• Feedback
• 9 box
• IDP (individual development plan)
• And much more!