Here are some of the ways a well-prepared people plan can help your company:

Provides a clear view of skills gaps and surpluses by area over time, potentially avoiding morale-affecting layoffs or persistent skills gaps that affect your companys ability to manage workload.

Lays out a vision of how key people processes such as hiring, training, performance appraisal, compensation and career paths need to work in order to support the company strategic plan while staying relevant to the external market.

Gives a common framework across the company for managing people, thus facilitating teamwork and career development.

Who should develop the people plan? The process, including a template for inputs and outputs, should be developed and coordinated by your human resources department, but it is critical that the work product be owned by the base organization. I do believe that this process will be helpful to your company even if it is relatively small in size; arguably it could even be more important to a small company where the impact of a skills gap can be harder to manage.

Here are the high-level steps in the people planning process:

Assess the base case situation. Identify organizational strengths and weaknesses as well as how the key human resources processes are working. In a large organization, this likely needs to be done at the divisional level, while in a small organization, this could be done by a cross-functional management team. Be sure to look at the impact of potential retirements coming over the period, too.

Identify key changes in the organization needed to implement the business or strategic plan over the next three to five years. This should include estimated increases and decreases in staffing by division or area and by skills and experience.

Develop an action plan to close the gaps. This can include such items as hiring, cross training, freezing the hiring process if downsizing is needed, increasing people transfer across divisions, identifying new external partnerships that are needed (such as with universities or training schools), etc. Action steps may also be needed to improve some of the people processes or make them more successful in the ever-changing external environment.

Execute the action plan. Ensure clear responsibility and timetables for the various steps, and check that budget is allocated where necessary. Consider whether some new, cross-functional teams may be necessary in order to facilitate movement of people across the company or to focus on improvement of a particularly critical people process. Decide how to monitor progress. Update the plan on at least an annual basis.

You can emphasize one aspect or another of this process, depending on what the key challenges are in your organization over the next three to five years. For example, if your company is projecting a relatively stable workload and staffing plan, then dont focus so much on the numbers and pay more attention to the quality of the people and the processes. Do managers feel they should be getting more productivity out of the workforce? Do employees feel that they have sufficient career opportunities and know how to pursue them? These may be key questions to investigate in a relatively stable workforce situation.

On the other hand, if your company is facing some significant staffing shifts up or down in different areas, or is starting a significant new project or strategic initiative, place more of the focus on the numbers of people needed and the skills gaps and how to meet the staffing challenge.

Special attention should be paid to development of top organizational talent. Perhaps you have in place a cross-functional or management team that deals with this specific process. On an annual basis, I suggest this team take a look at the performance of the key managers and the high-potential population, and consider how to develop them through training, work experiences and job movement.

In addition to the company-specific issues that you are facing, here are some potential industry issues that you may choose to deal with in your people plan:

How can we attract the next generation of talented engineers to our company, given that oil and chemicals may not be considered a desirable industry?

What external recruiters, training schools or other sources can be cultivated to deliver the best future operating personnel for our plants?

How can we ensure that people with specific skills (such as Ph.D. tribologists, technical sales people or machinery engineers) are nurtured and maintained in the company, given potentially narrow career paths?

What kind of gender and racial diversity exists in the company, and how can we maximize the opportunity that diversity offers?

I would like to offer you a few more tips with regard to the people planning process. First of all, try to have your organization take a big-picture view of this activity. The point is not to get hung up on whether an organization needs 20 or 21 people, but whether there are significant shifts going on that require a year or more of preparation.

Second, be sure to actively refer to the company strategic or business plan and work hard to translate key business activities into staffing needs. This dialogue may flesh out issues in the business plan related to lack of budgeting or resourcing for the planned activities, which may require some rethinking of the business plan itself.

Also, make an effort to mine your HR data for areas that may need attention; for example, examine colleague attrition data, exit interview information and employee surveys for insight into your people processes.

Finally, ensure that management, and not just the human resources group, commits to act on the people plan and incorporate it into the annual planning process.

Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. Email her at saralefcourt@gmail.com or phone (908) 400-5210.