Within an increasingly competitive global market, set against a backdrop of constantly evolving and shifting workplace trends, strategic workforce planning is an important and powerful tool to have in your organization’s toolkit.
The most powerful link between your employees and the talent management team is planning to get the most productivity and success at each end. A fully thought-out strategic workforce plan is the driver for achieving broader business objectives and ensuring significant business results.
If you can uncover the gaps in your workforce, and fully comprehend the impact and cost of such gaps on your business, you have the capacity to rebuild resilience, productivity, and ultimately, success.
What is workforce planning?
It is a process that should be at the heart of your business. Workforce planning aligns people and talent strategy with changing organizational needs.
The Society for Human Resource Management (SHRM) uses this description:
“ Workforce planning is the process an organization uses to analyze its workforce and determine the steps it must take to prepare for future staffing needs”.
But what does that mean? Simply put, workforce planning means getting the right number of employees with the right skills employed at the right time, for the right salary, on the right contract, to deliver the best outcome for the firm’s short- and long-term goals.
Sustainable workforce planning also allows for a more human approach to decision-making, as there should be a longer-term (rather than knee-jerk) perspective on the imminent and future hiring and firing needs of the organization.
Workforce planning needn’t be a complicated process. It simply helps you to focus on market intelligence across a range of challenges, and equip the organization to achieve longer-term business goals and ride out any industry-wide or organization-specific fluctuations.
Specifically, the process should equip your HR team to identify talent needs in reference to your organization’s future goals, balancing skills and labor supply against demand. It should create a strategy to ensure you have a balance of the right talent, the right tech, and the right employment models, to achieve the long-term, future, and incoming objectives of the business, working out the future needs of the business against the current talent pool and creating and implementing a strategy to fill any gap between future and present.
Workforce planning might also save you a lot of money, as strategic workforce planning will ensure you identify the most efficacious methods to recruit and retain talent. As the average cost of turnover for an employee earning £25,000 plus is stomach-turning £30,614, your corporation should have solid systems for talent acquisition and retention, and workforce planning plays into this.
Why do you need strategic workforce planning?
Many firms undertake a strategic workforce planning process following events such as mergers, acquisitions, or transformational changes. But larger organizations often already house a dedicated workforce planning team, and even smaller businesses are realizing that a focus on broader workforce planning is crucial for healthily meeting future objectives. The process helps to identify unrealistic targets or workplace obstacles to achieving the endpoint and can provide solutions to help mitigate incoming risk.
Your business needs to implement workforce planning because of the plethora of benefits it provides. Some of these include:
- Targeting and acting upon inefficiencies
- Reducing labor costs
- Identifying and responding to evolving business and customer needs
- Identifying opportunities for talent development
- improving employee retention rates
- Improving productivity levels
- Improving your employees’ work-life balance
Why is workforce planning important?
Workforce planning helps to build a successful future. It not only ensures long-term business goals but also better shapes the employee experience. Workforce planning could enable your business to:
Reach your organization’s financial objectives
Business planning shaped by both finance and human resource departments is a creative and productive union, encouraging collaboration and connection between peoples, processes, and technologies. These interdependent departments can offer each other crucial insight and develop well-explored strategies that make the most of this mutual knowledge, ensuring the successful progress of the firm.
Improve employees’ workplace experience
All strategic workforce planning comes down to the employees themselves. With people as the first priority, a business can better cater to workforce wellbeing, which ultimately improves the work-life experience of the staff, boosting employee productivity and retention. Engaged employees and flexible workforce plans enable your business to pivot and evolve as needed, tailoring the strategy for reaching your organizational goal to the talents, experiences, and needs of the workforce.
Foster collaboration
An environment of collaboration is crucial for transparency and employee engagement. Workforce planning is in essence a collaborative process, encouraging interdepartmental connection and participation across the organization, and creating a holistic route plan to the business goals.
What is the role of HR in strategic workforce planning?
As mentioned above, HR works in tandem with the finance department, hiring the talent needed to achieve specified business goals.
Strategic workforce planning informs HR practices such as organizational design and development, and succession planning. HR of course is founded on people, and workforce planning fosters an environment that helps to create a healthy workplace. Work-life balance ensures retention levels are high and informs recruitment selection and talent management.
Returning to the fundamentals of strategic workforce planning, the quintessence is the right people, the right skills, the right place and time, and the right cost.
To hire the right people, it’s important to remember the costs (financial and cultural) of new hires. Some businesses do invest in new team members, envisaging a quick shortcut to the ‘right people – but training up from within is often a better use of your time and budget, fostering a better culture and sense of organizational loyalty. If you must hire new, respond to the modern market. Remote working means your next hire could come from anywhere, enabling you to hire the best person, not just the person nearest.
Considering the right skills, you need to work out what skills the organization needs from its talent to most effectively fill future gaps or respond to upcoming obstacles. Again, consider training up from within as well as hiring to meet these skills gaps.
As for the right place and time, these are subtle and somewhat subjective. Continued company growth relies upon you pre-empting gaps and filling holes almost before they occur – but with a sharp eye for any business-specific or industry-wide fluctuations. It also means the firm must make clear the business goals so that they are hiring to meet these needs, and linear developments can be predicted.
The right cost is a matter of industry knowledge. You must plan for both the direct and indirect costs of hiring new talent or training up existing staff, and be aware of any constraint that will be put on budgets, or on the business as a whole.
What is the strategic workforce planning processes and phases?
To create a strategic workforce plan, the primary concern is to understand the business goals at stake. Alongside business leaders, the HR department should work to understand strategic objectives and invest in a plan to hit these. Whilst business leaders often stress the short-term priorities of staffing needs and targets, HR should use data to illustrate how a strategic workforce plan could mitigate such stressors in the future, and set the organization up for future success.
Workforce planning phases revolve around the process of getting the right people, with the right skill set, at the right cost, at the right place, and time.
A seven-step strategic workforce plan
These seven steps can be utilized to build a productive, successful talent base.
Assess the objectives
One objective of strategic workforce planning is to ensure business goals are actually achievable. During the strategic workforce planning process, both short- and long-term business objectives should be assessed, by the right people. This should go beyond business leaders and HR to line management, financial services, HR tech teams, and business executives, for example.
Analyze the workforce
After assessing the objectives, the next step should be to analyze the current workforce. Both the quality and quantity of workforce members should be thus assessed.
Identify any skills gaps
A skills gap analysis will equip your business with valuable insight. For example, it might indicate that several key employees are due to retire in the same window. With this knowledge, you could begin recruitment processes earlier, rather than suddenly have to scramble to find talent to fill their shoes.
Anticipate future obstacles
You could gain a competitive advantage by looking at the long-term rather than just the here and now. Anticipating incoming issues is crucial to your workforce planning, and flagging such issues allows valuable time to create actionable steps to address them. Brexit, for example, was an example of looking to the future and analyzing its impact.
Create a plan
After the first four steps are complete, it’s time to write your action plan. This should be made up of strategies for retaining talent and recruiting the best, plans for restructuring departments as necessary, and implementing incoming technologies.
Implement that plan
Once your plan is good to go, it’s ready to be put in place. That means providing all relevant resources are available, new or evolved roles are clear, and business and employee needs are met, so everybody is onboard and ready to implement their role in the strategy.
Refer back to the plan
It’s not ‘done and dusted. The plan should be continuously and rigorously tested and monitored, so that as your business changes, so does your workforce planning strategy. Identifying evolving areas allows you to progress and improve, creating any necessary adjustments to address any future workforce issues.
Remote workforce planning
In essence, the praxis is the same here. Cultivating an atmosphere of transparency and trust goes a long way to eliminating any workforce surprises – if an employee feels confident voicing any concerns or obstacles, you can deal with them appropriately. Continuous (and inevitable workplace change can be better tackled with a foreplanned workforce planning strategy, allowing your business to act quickly and be agile in times of revolution – for example, the pivots immediately necessitated by the COVID pandemic. Make sure your business resonates with employees and customers for the right reasons, to help differentiate yourself from the noise.
Need to deep-dive into the fields of strategic workforce planning, or the broader specialism of HR? Browse the UNLEASH archives for articles, webinars, interviews, and podcasts on everything from ‘best practices to support a hybrid work culture’ to ‘running a 360-degree feedback process.