Businesses need to be smart about who they hire and how they can be instrumental in achieving business goals in a constantly changing business environment.
This entails giving careful consideration to the workforce’s skills, the employees currently on board, those who require additional training, and those who will need to be hired in the near future.
This is where strategic workforce planning can help.
We’ll look at strategic workforce planning in more detail in this article, and provide 5 steps for efficient workforce planning.
What is Workforce Planning?
Workforce planning is the process of ensuring that a company has access to the human resources it requires now and in the future. Part of this procedure is the evaluation of existing and future workers’ needs, as well as the most appropriate and cost-effective techniques for recruiting and retaining these workers. There is also a component of ongoing workforce efficiency analysis and the implementation of essential steps, such as learning and development activities, to ensure that the workforce remains effective.
Benefits of workforce planning
Acquiring talent in today’s hiring market is challenging, but retaining it is even harder. As a result, employers are becoming increasingly aware that the job seeker wields this power.
Without systematic workforce planning, organizations risk losing the capacity to recruit, retain, and empower talent when it is most needed. If companies are unable to support the organization’s talent strategy and culture, costs will likely increase across the board.
Below are 4 examples of some of the advantages of implementing Strategic Workforce Planning:
1. Getting Ready for the Future
The planning phase of workforce management starts with using data collected to take a look into the future to identify hiring plans based on business growth or decline, capacity, outsourcer usage, and operational indicators used to gauge business success.
Long-term workforce planning benefits organizations by allowing them to simulate a variety of scenarios with their business to identify the number of staff members needed to handle the demand.
2. Avoid Disruptions
Similarly, planning can help a company avoid delays that could negatively impact profits. A company can achieve its production goals if it hires the right personnel. Managers can also use workforce planning to get a comprehensive view of talent availability and demand in key areas, which helps them prioritize hiring and staffing decisions.
This can be as simple as looking at long-term trading patterns to see if headcount should be increased or decreased at different times. It can also help a company deal with periods of low and high demand for its services or products and reduce the impact of the ups and downs of the business cycle.
3. Employee retention
Workforce planning can help a company retain key personnel in addition to acquiring new employees. A thorough examination of educational and market trends can help identify positions that would be difficult to fill if an employee departed, resulting in a negative impact on the company’s bottom line.
If a department has a high turnover rate, workforce planning can assist in determining the source of the turnover and developing retention tactics such as building employee engagement, benefits, or career growth opportunities.
4. Reduce the cost of hiring
One approach to ensure that an organization is making the most of its talent is to have a comprehensive overview of the personnel across the organization as well as the productivity levels required for the organization to run smoothly.
This information will lower recruitment costs and aid in the smooth operation of the business.
Steps to effective Workforce Planning
While some aspects of workforce planning may seem complex, there are 5 strategic but straightforward steps to implementing an efficient strategy. When the time is right, these can even be expanded upon and customized to meet company needs.
1. Establish a Strategic Plan
Workforce planning is a top-down process that necessitates a clear organizational direction and well-defined strategic goals to advise and steer future decisions. Before assessing the workforce and implementing new personnel management practices, organizations must consider a number of important questions.
- What are the main objectives/milestones the business wants to achieve?
- What does the organization want to accomplish with workforce planning?
- What are the reasons behind the company’s need for new labor planning structures?
It is also important to keep in mind that each procedure in the company has an impact on the others. As a result, workforce planning should be a company-wide effort involving excellent collaboration between HR and other divisions.
2. Examine the current work environment profile
Evaluate the current staff in greater detail. Determine where in the company there is understaffing or overstaffing. Investigate why one department has a higher turnover rate than another. Doing this will help answer the following questions:
- What are the present employees’ skills, expertise, and experience?
- Does the organization have the correct number of employees?
- Is the workforce well organized?
- Is it necessary for personnel to receive more training?
- What is the current turnover rate in the company?
3. Develop a plan of action
This is where businesses must take their overarching goal, factor in their current workforce, and create a solid long-term plan. This is also where organizations come up with strategies to close any gaps discovered in the first two steps.
Businesses must consider where they will be in two or three years based on their aim and vision. This includes anticipated shifts and changes, future services, products, and collaborations, business cycle stages, and workforce requirements.
During this step it’s also helpful to consider the following:
- Employees’ ages and plans for retirement
- Generational differences in job expectations
- Skills shortages
- Employees’ personal circumstances
4. Execute the plan
To bring the workforce efficiency plan to life, collaboration across the different departments will be necessary. Implementing workforce planning effectively necessitates:
- Strategies and procedures for keeping track of all pertinent data and information.
- Effective communication routes amongst all stakeholders involved.
- HR personnel to be aware of their new responsibilities and functions.
- Well-defined assessment and evaluation criteria to gauge the plan’s success.
5. Evaluate and revise strategy
With change happening at such a rapid pace, the workforce planning process must be flexible and adapt in real-time to both internal and external staffing requirements. This effort is no longer a yearly occurrence. Businesses must engage in a continuous planning process with shorter time frames. This will make it easier to make adjustments to the results of the workforce planning project.
Conclusion
Approaching workforce planning holistically, with a focus on the organization’s long-range goals and from a data-driven, collaborative viewpoint, allows businesses to modify and adapt to rapidly changing business demands.
Implementing a flexible and agile workforce planning process can result in well-trained personnel that can respond to business needs while minimizing the risk of unanticipated interruptions.
