Organizations today face tough competition in the market. Hence, they need to engage in strategic workforce planning in order to remain viable. A strategic workforce planning system enables better implementation of talent strategy management in relation to business objectives while at the same time assisting firms in evaluating and articulating who and what skills will be needed and when.
In this article, we will provide a general overview of what workforce planning is, why it is necessary, and how it is possible to carry out workforce planning best practices.
What is Workforce Planning?
Workforce planning is a tactical process-driven approach that guarantees that any organization has in place the required personnel to achieve its present and future goals.
Simply put, strategic workforce planning:
- determines the workforce requirements,
- evaluates the actual provision of resources and
- formulates action plans to close the resource gap
This helps companies anticipate the market trends in labor and plan new hires, training new employees, or retaining existing personnel accordingly. In short and simple terms, workforce planning helps businesses achieve all their long-term goals. It is not only about populating resources; it is making sure that the talent management plans are sustainable, oriented to the future, and have the capacity to grow.
Workforce Planning Framework
The workforce planning process may be subdivided into specific stages, such as the following:
Analyze Current Workforce
One of the initial steps in strategic workforce planning is to assess the existing workforce. In this case, the inventory of skills, capabilities, and allocation of the existing talent pool. Workforce planning analytics tools can be beneficial at this stage and provide analytics regarding the organization’s labor force.
Forecast Future Needs
The second element involves identifying the skills gaps. After analyzing the personnel employed at the moment, the next step is to project future workforce needs based on the organizational objectives that are in place. This forecasting is the heart of strategic workforce planning, where you help ‘anticipate’ any possible skill, workforce number, or deployment regions for identifying the future workforce.
Develop Workforce Planning Strategies
Companies are obliged to develop strategies to fill the identified vacancies in the analysis. These strategies could include talent acquisition, training programs, or developing leadership pipelines. The process of designing such strategies can be made easier by using workforce planning software, which incorporates modeling and predictive analytics features.
Execute
After strategic workforce planning, it is necessary to carry out the strategies. This stage requires coordination between departments such as human resources, management, and other people so that the plan is carried out efficiently. It is very common that such coordination and communication between all departments makes or breaks successful initiatives.
Evaluate
Workforce planning is not a once-off event. Organizations must constantly look at the performance of their plans and the need to change them. This makes it possible to monitor performance and change plans based on various developments or changes that occur in the environment or within the organization.
What is a Workforce Planning System?
A workforce planning system is a formalized method or software application used to assist the workforce planning and management processes. It helps firms determine how many employees will be required, what skills will be required, and how to implement effective employee recruitment and training activities. They also usually link with HR systems to facilitate the collection and processing of information.
The comprehensive workforce planning system should possess key functionalities such as:
- Data Analysis and Forecasting: Determining future workforce needs through the utilization of historical information and forecasting tools.
- Scenario Planning: Anticipation into the future and coming up with various scenarios that could occur in the business.
- Skill Gap Analysis: Assessing the current workforce for absent competencies and devising plans to acquire such competencies.
- Workforce optimization: Striking the right mix of skills, numbers, and employee allocation in order to improve the company’s performance.
The workforce planning system encourages better human resources management planning.
Benefits Of Workforce Planning
There are numerous benefits of workforce planning, ranging from improved operational efficiency to better decision-making at all levels of the organization, which leads to better planning. Some of the important ones include:
Increased Productivity
It increases productivity because workforce planning makes sure that the right people are located in the right positions at the right time. Staff occupy the positions that they have been trained to handle, which ensures they perform well.
Reduced Costs
A well-implemented workforce planning framework can also minimize the chances of incurring unnecessary expenses related to hiring extra people or downsizing due to a lack of available tasks. Companies lessen unnecessary hiring as well as layoffs since they predict the count of workforce they will need in the future.
Lower Employee Turnover
This is achievable if there are clearly defined training, development, and employee engagement programs. When employees feel they are being developed and have clear career paths, turnover decreases. This saves companies from the costs related to hiring and training new employees.
Increased Ability To Cope With The Changes
Strategic workforce planning enables the organization to be more adaptive to changes in the market, industry, or economy. Be it the advancements in technology or changes in the tastes of consumers, companies are able to weather these chances as long as they have the right people to address the challenges.
Basic Principles of Workforce Planning
In creating a strategy for workforce planning, there are fundamental principles that have to be followed for the strategy to be effective:
About Business Strategy
Workforce planning always has to support business strategy. This confirms that the workforce structure is prepared to meet the organization’s strategic objectives, even if those may change over time.
Proactive, Not Reactive
In general, the overall scope of workforce planning goes beyond tackling problems that arise only at the moment. However, it also provides opportunities to avoid hiring too many people or, at worst, being short of essential staff.
Data Driven
Coordinating and synchronizing all workforce planning activities is driven by tracking and measuring the associated analytics and data. This leads to eliminating biases and more accurate forecasting of labor contraction and growth.
Flexible and Adaptive
A valid workforce planning framework should bring an element of flexibility so as to respond to a certain level of changes in the business environment.
Engagement and Collaboration
Workforce planning is a function of virtually all departments in an organization, not just HR. It involves input and collaboration with all departments in order to ensure that what is being planned within the strategy is achievable across all areas of the business.
Workforce Planning Software: Tools for Success
In order to understand and execute the different plans for workforce planning strategies, workforce planning software has become a normal way of doing business for many organizations. These tools assist in managing and coordinating processes like forecasting and reporting, which are quite common within the planning cycle. Some of the leading software options offer capabilities like:
- Predictive Analytics: Using historical company and industry data to forecast trends in workforces in the future and identify shifts that can be seen emerging in the future.
- Scenario Modeling: Helping HR units to run forecasts considering estimates of workforces that might be needed and their various outcomes.
- Integrated Talent Management: It enables linking business plans with workforce planning and other human resource components such as acquisition, performance, and developmental aspects.
Investing in higher-level workforce planning software is meant to alleviate the administrative load for companies, enabling more time to be directed toward planning and improving the talent available in the organization.
Best Practices of Workforce Planning
To enhance the usefulness of this component of workforce planning, it is advisable to follow the best practices below.
Stakeholders Involvement
Achieve a cross-functional perspective in the planning practice by bringing in relevant departmental heads and company executives to ensure the engagement is not detached from the wider picture.
Use of Technology
Make use of sophisticated workforce planning tools in forecasting, trend analysis, and improvising workforce management strategies.
Prepare for More Than One Plan
Prepare the workforce to implement a variety of strategies and plans by making them flexible in order to minimize over-reliance on a single forecast.
Establish Plans for Skills Development
Foster a culture of workforce planning that includes strategies to enhance the skill set and industry knowledge of the current workforce, as some industries may demand new skills quite rapidly.
Revisit the Plan From Time-to-Time
Developing and maintaining a workforce planning framework is not a ‘one-off’ event. Periodical revisions help to ensure that the organization’s goals and solutions remain suitable in the fast-paced environment.
Conclusion
Organizational success cannot be attained without proper workforce planning. It is possible to be agile in human resource deployment by taking a more consultative stance, analyzing data, and integrating the workforce with business needs.
Filling in the gaps on the organization chart is not the only purpose of workforce planning. The objective is to develop an agile workforce that is transformational, sustainable, and can outlast the dynamics of the business environment.
