Workforce Planning

In an era of globalization, where the business landscape is constantly evolving, keeping a competitive edge means being prepared for changing business conditions. For a growing number of companies, workforce planning is a popular means to address changes in a fluid marketplace. With a well-trained and skilled workforce, businesses can quickly adapt and expand into new markets with the right mix of resources.

What is Workforce Planning?

A vital part of business management, workforce planning is an integrated and forward-looking process that predicts how a workforce should change over time and provides a plan for facilitating a smooth transition. A solid workforce with the skills and capabilities needed to meet the objectives and goals of an organization over time is a key ingredient for success.

Workforce planning is a process to understand the priorities and needs of the organization in terms of its workforce. It involves asking such questions as: What is the correct org structure? Is the organization aligned with business goals? How do we weather the storm and exit prepared for growth? How do we reorganize to meet new financial objectives?

By placing the right number of people with the right skills, experiences, and competencies in the right jobs at the right time, a good workforce plan anticipates unforeseen changes in the market and allows a company to adapt without costly delays. Different companies conduct workforce planning annually, quarterly, or on an ongoing basis as needed. One tool that greatly assists workforce planning and organizational design is the org chart.

Workforce planning consists of four consecutive phases:

• Strategy – Management determines the goals and objectives of a company and devises ways to accomplish them.
• Workforce analysis – A review of a company’s workforce to identify gaps or problem areas.
• Implementation of plan – This could range from a broad reorganization of the workforce to a surgical reassignment or promotion of a few key employees.
• Revision – A regular review of the workforce plan to assess strengths and weaknesses and adjust accordingly.

Strategic vs. Operational Workforce Planning

Operational workforce planning was once as simple as filling open headcounts and managing budgetary requirements.
In contrast, strategic workforce planning usually looks ahead a year or several years. It requires thinking about future needs and analyzing the talent needed to execute a business strategy. In strategic workforce planning meetings, senior executives consult with HR on a proposed business strategy and its workforce implications. The outcome of these meetings will accurately identify, develop, and sustain the workforce skills the organization needs to successfully accomplish its strategic intent.

As businesses and organizations become increasingly complex and focused on long term goals, the need for specialized tools to develop reporting structures and systems for decision making, information, metrics and rewards is also increasing. Operational workforce planning solutions fill this need by helping organizations achieve strategic realignment.

Best practices in workforce planning

In a challenging economy, many organizations look for ways to become lean while remaining competitive. Typically, this means reducing the workforce. Often, these drastic workforce reductions have adverse long term effects. Rehiring and training new staff to replace a laid off worker is very expensive and can result is production delays. Organizations must think strategically about their workforce plan today to guarantee future workforce success. Below are some of the best practices for a successful workforce planning strategy.

• Take an organized, systematic approach - Incorporate the organization’s mission, vision, goals and objectives.
• Collaborate with all stakeholders - In addition to HR, you will need to collaborate with other stakeholders like senior leadership, strategy and finance.
• Focus on the future – Develop solutions to acquire, nurture and retain a productive and committed workforce.
• Align with your company - You need to observe the market trends, identify your critical positions and potential gaps, and then identify solutions for closing the gaps. Keep workforce planning aligned with the company’s strategic plan.
• Measure - Set realistic expectations, and measure the impact of changes in strategy to your organization.
• Optimize – Following a workforce plan to its end is crucial. You should analyze its success and make decisions if necessary.

How to develop a workforce plan

Workforce plan is a vital part of any business planning process and therefore, should be prepared and developed strategically. Below are the basic steps to developing a workforce plan:

• Gather accurate data on your workforce - You need to gather accurate workforce data to know the characteristics of your current workforce – job titles, responsibilities, skills, experience as well as demographic data, retirement plan, etc. Analyze the complexities in these factors to reduce turnover rates, understand critical workforce segments, plan for future retirements and improve recruitment practices.
• Analyze and forecast your talent supply and demand - Observe the areas of the business that are growing and the skills and competencies that are required to achieve the goals. Moreover, gather information on what workforce capabilities will be required in the future that might address the gaps in your workforce size, or skills and expertise requirements. Also, collect data on future demographic trends which will impact your workforce based on predictions about your company’s growth, to make sure you have the right expertise on hand to help.
• Develop a strategy to mitigate gaps - You need to develop a strategy by recruiting, retaining and rewarding the employees to close the talent gap. Identify the positions and individuals which are most critical to your business, predict your turnover and develop a succession plan.

Common Workforce Planning Mistakes

• Underestimating the plan - A workforce plan is more than a budget. It integrates thoughtful analysis and insights as well as numbers.
• Not including the right people when making the plan - A strong workforce plan needs people with a strong analytical background who have a good understanding of the business. It also requires discussion and collaboration between HR and senior executives.
• Not including the right data – The planning process must be mindful of the bottom line impact by focusing on the right financial data and its implications.
• Too many numbers and not enough insight - Good workforce planning includes discussion of what the data means and what your organization plans to do with it.
• Not enough market intelligence or external data - What’s going on in the marketplace? How are other organizations adapting to change?
• Not using workforce planning and analytics software - Modern technology is designed to help streamline the process for businesses.

Workforce Planning Solutions from HumanConcepts

HumanConcepts Analytics is used by senior executives and HR personnel to gain an insight into their organization. The software provides macro HR information and focuses on the specific data needed for fact based analysis and decision making by offering a better understanding of the organization as a whole. It helps decision makers gain high level insight into critical organizational metrics and easily investigate trouble areas.

HumanConcepts Analytics excels in analyzing organizational risks by exploring parameters such as headcount, tenure, age, diversity or compensation. With this tool, managers can discover answers to organizational performance questions by tracking specific causes that can be corrected with surgical precision.

In summary, a good workforce plan, supported with tools from HumanConcepts, gives decision makers a means to develop realistic projections on staffing over time while monitoring budgetary conditions.  Doing so will help prepare the organization for strategic restructuring, optimization, and sustain a diversified workforce with a shift towards highly skilled and knowledgeable employees.