What are the 5 steps in human resource management?

As a new business owner,  your main focus may be on the financial side of your business rather than the human resource management side. However, it is important for you to understand the 5 steps in human resource management and how that can apply to your business’ success. In this blog Centric HR explains each of these 5 steps in detail so that you can understand for yourself. 

So, what are the 5 steps in human resource management? The 5 main steps in human resource management include: 

  • Analysis of Company Plans & Goals
  • Creating a HR Data Log 
  • Recruitment Forecasting 
  • Recruitment Strategy 
  • Recruitment Action Plan 

Keep reading to find out more about the main objectives of human resource management as well as why planning is so important within this process. 

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5 steps in human resource management

When you set up a business, it is natural to think about the bigger picture such as revenue and growth rather than the details of human resource management. However, one of the most important lessons that entrepreneurs must learn is that human resource management plays a vital role in running a successful business. Therefore, to help you out we have put together the 5 main steps in human resource management so that you can begin to understand the process. 

  • Analysis of company plans & goals

The first step in rationalising a human resource management strategy for your business involves completing a full assessment of its goals and objectives. Whether that be assessing how many staff you aim to hire in 6 months or deciding how much of the market you wish to dominate, each goal will help you to understand what level of human resource management you will require. It is important to recognise that every organisation is different and will have different goals, which means they will require different aspects of HR management. What’s more, small to medium enterprises may require a differentHR management strategies in comparison to larger companies.  

Recently we wrote a blog on how HRM in SMEs different from larger companies which explains the differences as well as why HR management is so important for each type of business. To expand your knowledge on this topic, be sure to take a read by clicking here

  • Creating a HR data log

The second step in human resource management is to create a detailed HR data log of your employees. This data log should include information such as employees educational qualifications, experience, skills, age, gender, salary, marital status, next of kin and address. Whilst this may take some time, it is also a very important step in the HR management process because once this data is collected it will make payroll, future employment and handling any internal issues a whole lot easier. 

  • Recruitment forecasting

The next step of human resources management is to complete recruitment forecasting. This is significant because it encourages you to consider at what point your company’s demand for employees will increase. This may be because you secure a particular contract, receive some investment, or even reach a certain level of profitability. In either of these scenarios you may find that you need to expand your team of employees so that you can meet the demands of your business and clients. 

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On the contrary, you may recognise change in the market that you believe will negatively affect your business and therefore result in you needing to reduce the number of employees you have. Either way, you will need to adjust your human resource management strategy to accommodate for these changes. 

  • Recruitment strategy

Upon completing your recruitment forecasting session, you now need to form a recruitment strategy that can meet the demand of your predictions. One way of doing this could be to employ one new employee across all areas of your business, as this should provide a general increase in the amount of work you can take on as a whole. Another method for matching your recruitment strategy with your company demand could be to adjust your recruitment strategy based on your predicted fluctuations in demand. Temporary or recruitment staff are a great solution for scenarios such as this one but it is important to consider whether this is realistic for your business and whether you have the cash for it. 

  • Recruitment action plan

Once you have completed the recruitment strategy, the next logical step is to develop a recruitment action plan. When your business is at this step of HR management, there are different factors that need to be considered such as:

  • Does your HR department meet your business requirements or does it need expanding? 
  • Do you have a recruitment strategy?
  • Do you have an employee training process?
  • Do you have a process for employee sickness?
  • Do you have a process for handling employee disputes?
  • Who will write the job descriptions?

These are just a few of the factors that you need to address within your recruitment strategy. They will help to ensure an efficient and proper recruitment process that will result in the successful expansion of your business. At this point you may find it useful to complete a HR health check in order to determine how well your HR department is performing. To find out more about HR health checks and why they would be useful for your business, take a read of our recent blog by clicking here. 

What are the main objectives of human resource management?

Now that you understand the 5 steps in human resource management, we thought it would be helpful for you to understand the main objectives of that department. Understanding the long-term objectives will help you to realise why the main steps are so important in the first place. Therefore, we have detailed some of the key objectives below so that you can see for yourself.

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Achieve Organisational Goals One of the most important objectives of the HR department is to help your business achieve its organisational goals. For example, if your company’s goal is to be one of the largest and successful law firms in your area, then you would not only need to employ some of the highest talent but also retain that talent. This is where HR would step in with a comprehensive recruitment strategy, job description and employee benefits scheme to attract good talent. To learn more about how to retain your best talent including the cost of having a high employee turnover take a read of our recent blog by clicking here. 
Creation of Organisational Culture Another main objective of HR management is the creation of your businesses’ organisational culture. Organisational culture has never been more important, due to employees now expecting more from their employers. HR’s goal is to create an organisational culture that involves people of all backgrounds which in turn should attract new talent. To learn more about organisational culture and values development, the main benefits of this objective, click here.  
Training & Development Training and development is also a very important objective of the HR department. This is because it not only helps employees to feel as though they are progressing and learning within their careers, but it can also help to improve the work that is done for your business. For example, if an employee does not feel as though there are areas for them to progress and learn within their role at your business, they may be tempted to look for alternative jobs which could negatively affect your business’ growth. To learn more about HR management’s role in organisational training and development as well as the benefits of training, click here. 
Dispute Management Dispute management is also an important objective of your HR management department. Naturally when managing people, issues will occur, disputes will need to be resolved and employees may leave. All of these scenarios need managing in a lawful, fair and proper way and this is where HR steps in. Without a professional HR manager’s guidance, and clearly set out procedures it can be quite difficult to manage sensitive issues well. 

If you are interested in learning more about the objectives of HR management, take a look at the informative video below.


Why is planning so important in human resource management?

Planning is one of the most important features of HR management. From planning what details need to go into a job description to planning training sessions for your employees and even ensuring your dispute resolution procedures comply with appropriate regulations, planning is the first step. Without planning you may find yourself in situations that you are not prepared for, especially with employee disputes, and this can end up costing a lot more in time and money to resolve. What’s more, by not planning you may end up in a position where you do not have enough employees to meet the demand of your workload and this in itself can cause employees to feel overworked and undervalued. 

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Human resource management at Centric HR

Centric HR provides an array of HR services across the UK including HR Outsourcing and HR Consultancy. If your business is looking to expand but you are not sure how to manage that in terms of HR processes, then do not hesitate to get in touch today. 


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Sandra Berns

Centric HR was founded by Sandra Berns, a confident and versatile Human Resources and Organisational Development Practitioner with 25 years demonstrable experience and a Fellow of the CIPD. Sandra has both Operational and Strategic HR expertise across Public and Private sectors and has assisted senior teams in meeting challenging workforce objectives in many corporate environments.