Since talent is such a vital asset for any business, workforce planning is at the core business process in aligning the changing business needs with talent. As such, workforce planning can be the most effective activity a business can engage in.
However, it doesn’t have to be as complicated since it can be easily adjusted to suit the size and maturity of any business.
Moreover, workforce planning provides the market and industry with intelligence to help businesses focus on a wide range of issues and challenges while preparing for initiatives to effectively support the long-term goals of the business.
With well-executed strategic workforce planning, businesses can precisely predict needs to ensure talents and resources are used in the right place and at the right time.
What is Workforce Planning in HR?
Workforce planning refers to the process of balancing labour supply (talent) against the demand (number of employees needed). Essentially, workforce planning is about analyzing the current workforce, determining future workforce needs, identifying the gap between the current and the future, and implementing solutions for the business to achieve its goals and overall strategic plan.
Equally, workforce planning is about sourcing the right number of employees with the right skills utilized in the right place at the right time, at the right cost and on the right contract to attain a business’s short and long-term goals and objectives.
Workforce planning also enables businesses to sustain performance through strategic decision-making on the future staff needs of the business.
What Does Workforce Planning Involve?
Workforce planning involves the production of information and data, analyzing it to inform future requirements of recruits and skills, and translating that into actions that will develop and build on the current workforce to meet that requirement.
Therefore, understanding the difference between the soft and the hard aspects of workforce planning can help explain what workforce planning involves in:
‘Hard’ Workforce Planning
This refers to numbers; predicting the number of people and with what skills are likely needed. In recent years, the use of basic numeric or statistical data has been embedded in management information systems as they help in the understanding of certain phenomena cause and effect.
However, metrics alone aren’t adequate, therefore, there is a need that them to be analyzed and understood in context.
‘Soft’ or strategic workforce Planning
Strategic workforce planning is the process of defining a strategy or developing a strategic framework within which data and information can be assessed. With the increasing stress on agility and responsiveness at the workplace, there is a growing realization that high-quality management of information within such a framework is essential to identifying and optimizing performance drivers.
Therefore, strategic workforce planning is an approach that provides managers with the opportunity to consider a range of possibilities prior to reaching a phase where they are forced into action by situations.
What are the Five Steps in the Workforce Planning Process?
Workforce planning is a process, and like any other process, it is essential to have a look into a series of steps that work together towards its successful completion. For effective workforce planning processes to happen, five steps have to be followed. These steps can guide you through the process of developing a workforce action plan to ensure the workforce needs are met.
Below are the five steps that we have explored in detail. Without much ado, let’s get started and see what each of these steps entail.
1. Business Context and Environment
Having a better understanding of the present environment and context of the industry on which your business is based as well as the goals of the future of your business will significantly help you in planning your workforce needs.
The understanding will also help you develop strategies that will translate your goals into your business’s success. Ideally, workforce planning requires to be directly connected to your organizational goals and, therefore, thinking about your business context and environment is a top priority.
To ensure you comprehensively assess your business context and environment, you should ask yourself the following questions:
- What are my business goals and vision?
- Where is my business heading? Is it growing, downsizing, shifting skills, transitioning, inaugurating new technology or is it in a maintenance mode?
- Who are my clients?
- What economic conditions affect my industry sector and markets and do they
- impact my business?
- What is happening internally in my business and how will it affect my workforce requirements?
- What are the short, medium and long term objectives for my business? What workforce talent and capability will I require to achieve these business objectives?
2. Current Workforce Profile
What do you know about your current workforce? This is the question that sets your strategy into planning your future workforce. Essentially, this question will give you answers about that age, skills, knowledge, strengths, weaknesses, experience or any workforce issues with your employees.
Moreover, your current workforce might have hidden potential that your business could utilize or some of your employees may be underdeveloped and have the potential for training to up-skill them and transition them to new senior roles.
Besides, do you know what your staff’s plans are for the future and what their expectations are? Which employee do you expect may leave in the near or distant future? You can gain insights into your workforce’s strengths and development requirements by conducting a skill stock tale, analyzing your workforce data pattern and discussing with your staff what their view is on concerns, issues or areas of improvement.
3. Future Workforce Needs
By the guidance of your business goals, objectives and vision, you can efficiently envision where the business is most likely to be in two or three years to come. However, you need to also think about what is likely to change or shift.
You can think through this in terms of future products and services, partnerships, markets, stages of your business cycle and what your workforce requirements may be. Consider all the possible aspects that may emerge in the future.
With this information, you can then estimate how your workforce may evolve over the years. While in this step, it will be helpful to take into consideration of the following aspects:
- The age of your workforce as well as their retirement plans
- The growing diversity of the population
- Skills deficiencies
- The various workplace expectations across the generations
- Personal situations
- Employee’s development needs may evolve as the job roles evolve
When you have a rough idea of where your business will be in the next 2 or 3 years, and perhaps in the long term, you can easily envision how your ideal workforce should look like and the kind of talent you will need for your business’s future.
4. Analyzing and Filling the Gap
Once you have an idea where your business may be in future, now it is time to take what you know about your present workforce and what you want your future workforce to be like and make a comparison of the two. The process of comparing the two is referred to as analyzing and filling the gap.
Analyzing your current workforce will give you a clear idea about the gaps existing between skills, employees, job roles, and experience of your workforce and the workforce your business needs to attain future workforce needs.
With this valuable information, you can start developing a workforce action plan to fill the gaps and attain your business goals. But how do you develop your workforce action plan?
Developing a Workforce Action Plan
When developing your workforce action plan, it is essential that you think about the areas that require to be changed, managed and developed. Once you do that, you can then prioritize the actions into responsibilities and timeframes across the following key areas:
· Attraction and Recruitment
Here, you can think about the various ways and strategies you can put in place to attract the right people from the broadest possible sources.
You can do this by redefining your business’s job structures, recruitment and selection methods. Also, consider looking for a more diverse pool of potential recruits.
· Employee Training and Development
How can you make your employees more productive? You can do this by having regular induction and training programs to develop your own skilled workforce. Also, think about ways you can expedite an efficient succession plan. More importantly, regularly review your training and development programs for your employees.
· Employee Management, Motivation and Reward
What strategies can you put in place to build a positive culture and workplace where your employee can work effectively?
· Employee Retention
Think about the different things you can put in place to ensure your employees are engaged, feel values and retain them for longer, even during a downturn.
· Leadership and Communication
When developing a workforce action plan, the leadership and communication aspect is very crucial. Therefore, think about how you can lead and communicate with your staff in a more effective manner.
5. Review and Evaluate your Workforce Action Plan
Once you have an action plan in place and you have started to implement it, it is vital that you think about how you will review and evaluate to find out whether your plan is working.
By reviewing and evaluating your workforce action plan, you start to build a road map for any future action that may be needed. In the process of evaluation consider the following questions.
- Is my workforce action plan generating the workforce results that I need?
- Do I need to take any different or further action?
What are the Steps of Workforce Planning?
Most large businesses may have dedicated workforce planning teams. However, others may start the workforce planning process following a specific event such as an acquisition, merger or a transformational change project. Regardless, focusing on wider workforce planning is essential at any given time.
In workforce planning, the HR teams can unravel obstacles or unrealistic targets that can prevent strategic change and provide solutions to prevent risks to strategic goals and objectives. To enable a smooth workforce planning process, the following steps can guide you through:
· Reduce Labor Costs in Favor of Workforce Deployment and Flexibility
Labor usually takes the biggest cost for businesses besides manufacturing. It is estimated that labour takes up to 70% of business expenses. With such huge expenses on labour, planning to reduce costs while increasing flexibility and productivity is vital to continued business success.
Reducing labour costs in favour of workforce deployment and flexibility isn’t about low-balling of your staff or providing them with unpleasant benefits. Instead, workforce planning enables you to deploy the right people in the right positions.
Without a doubt, an engaged, experienced, a competent and happy employee will cost you less than an unhappy and unqualified employee would.
· Identify and Respond to Changing Customer Needs
HR professionals need to be somehow fortune-tellers to accurately predict workforce needs. Workforce planning allows HR teams to work closely with other teams or departments to help identity and effectively respond to the changing customer needs and, most importantly, create plans to meet them. Therefore, direct communication between HR and other departments is very essential.
· Identify Relevant Strategies for Focused People Development
Workforce planning is based on the fact that business changes, and because of this, the workforce need to change as well. Identifying talent gaps in your staff and planning to fill them is the core mandate of workforce planning.
Human resource development needs to take place before the need exists. Ideally, you can get into the market and get an experienced candidate to fill your workforce gap instantly. However, it is more manageable if you plan and develop one of your employees to take that speciality talent gap. As such, this calls for training sessions, graduate programs or stretch assignments to get it right.
· Target Inefficiencies
If you hear employees explain something by “we have always done it that way” then know that your business has inefficiencies the need immediate uprooting.
Here are two questions that can help identify inefficiencies in all departments of your organisation:
- What should we stop doing?
- What should we do?
· Improve Employee Retention
Turnover is quite expensive for any business. It does not only take time and money to find, interview and onboard a new employee, but training the new recruits can take weeks or months. Workforce planning helps HR to focus on retaining employees who have potential, experience and the right talent.
However, workforce planning doesn’t advocate retaining any employee. If you an employee is toxic, training and giving them more technical talents won’t eliminate their toxicity. Most importantly, workforce planning can help you create exceptional career paths that enable you to retain your employees without extra cost.
· Improve Productivity and Quality Outputs
While business managers require to figure out how to improve productivity and quality, HR can provide sufficient support to attain improved productivity. When HR analyses the workforce, they can easily spot issues that are occasioning the decrease in productivity. They can ask; are there policies and procedures that can increase productivity and quality? What support, skills, or equipment do employees need for attaining these goals?
With these questions, HR can plan to find, train, develop and motivate employees as well as advice the management on how best to increase productivity and quality.
· Improve Employees’ Worklife Balance
Without a doubt, employees are at the core of workforce planning, therefore, without them all the plans are worthless. Ideally, you can improve your business productivity by getting every employee to work 80 hours per week, making your turnover shoot through the roof while your quality collapses.
However, by ensuring all the employees have adequate downtime and are well-supported at work, your workplace will be quite stable for longer.
· Make recommendations to deliver strategic value through talent
Often, some managers can undervalue employees and think if they could get some cheaper labour, they should. However, a good workforce action plan has demonstrated that you can actually pay for top talent.
Find out what talent your employees have and how they can make a difference in your business. Keep in mind that treating your employees right is much easier than trying to squeeze value out of employees who are burnt out, unmotivated and exhausted.
Importance of Workforce Planning?
Workforce planning, in its simplest terms, is getting the right number of people with the right talent, experience and competencies in the right job positions at the right time. the importance of the workforce planning to organisations and businesses can be seen in the following:
Workforce planning enables the clear articulation of the business vision, mission, strategic objectives and cooperative supportive efforts to staff in various functional areas. Organisation plans set organizational direction and articulate measurable programme objectives and goals while the budget process plans for the financing to attain the goal. Human resources provide tools for identifying talents required in the workforce and for recruiting, training, developing, retraining or placing employees to build the workforce of the future.
Workforce planning also benefits businesses by providing managers with a strategic basis for making human resources decisions. Ideally, it enables management to anticipate change rather than being surprised by events. Most importantly, it provides strategic methods for mitigating both the current and anticipated workforce issues.
Workforce planning provides focus on workforce components such as demographics, retirement projections, and succession planning thereby providing more polished information on changes to be anticipated, and the key positions that may need filling. As such, workforce planning allows managers to plan ahead for replacements and any changes in workforce talent.
Workforce planning provides businesses with the means of identifying the talents required both in the current and future workforce while choosing and developing then as needed. Finally, workforce planning enables businesses to address systematically issues driving workforce change while providing managers with the ability to strategize more effectively for the change.
The main purpose of workforce planning is the get the right people in the right job placement at the right time. And this will only happen when you know your current workforce capabilities, anticipated future scenarios, determining the needed workforce and strategizing to align your future workforce with these desired goals and objectives.
However, workforce planning is a complicated process that needs careful information and data aggregation and planning. Regardless, if done well, workforce planning is an incredible tool that can help create a competitive advantage for your business.