As Business Owner, are you confronted with these challenges in managing your Human Resources?
- The mundane task of completing manual processes.
- Lack of systems integration.
- Risk of error in compliance and analysis.
- Madness in recruiting.
- High employee turnover.
Never Mind.
Strategic Workforce Planning will go a long way in alleviating your pain.
SWP Shall Substantially Help You Resolve Issues Like:
- Deciding Strategic Direction And Goals
- What direction do you see your business going in?
- What are the primary milestones you are targeting?
- Why does your business need new workforce planning structure?
2. Analyse Existing Workforce
- Do you have the right-sized workforce?
- What skills, knowledge, and experience do your current employees have?
- Do your employees need additional training?
- What new resources can improve workforce performance?
- Is your workforce correctly structured?
- What is your current employee turnover rate?
These are some of the issues addressed by Strategic Workforce Planning and we need to proceed in this direction.
Strategic workforce planning is defined as a means to align the people strategy with the business strategy of the business enterprise.
Strategic Workforce Planning (SWP) helps business organizations to map out a way to accomplish their futuristic goals. It plays a crucial role in mitigating the risk to people and organizations in the execution of strategic actions. It develops the workforce and enables the organizations to:
- Choose where to invest in people.
- Identify action required to be taken in this direction.
- Retain and develop the workforce.
Connotation Of Strategic Workforce Planning
Strategic workforce planning is the art of creating a workforce that can operate effectively in the future environment to meet the company’s goals.
It sets out the numbers, skills, and nature of workers likely to be required by the company. In this context, it is essential to keep in view, relevant trends, challenges, and opportunities at play in the external environment.
A strategic workforce plan should be developed and updated in alignment with core business planning.
The strategic workforce plans warrant regular monitoring with reference to the company’s vision and objectives.
Workforce planning entails the process of analyzing existing employees and planning for future staffing requirements through:
- Talent gap assessment.
- Developing employee management procedures.
- Setting recruitment strategies.
Components having a bearing on workforce planning include:
- Talent availability.
- Business growth.
- Age of the existing workforce.
- Current knowledge.
- Skill gap.
Strategic workforce planning is a proactive approach to managing staffing requirements. It aligns HR processes to business goals.
Strategic workforce planning tends to take place at the senior leadership level. It encompasses a macro picture of goals:
- Structural organization
- Employee redeployment
- Succession planning
- Staffing budgets
- Maintaining capacity
- Reducing risk
Workforce planning connotes the process of enabling an organization to have access to the resources and workers it needs to perform effectively, both now and in the future.
Strategic workplace planning involves identifying the current and desired future state of the business and taking appropriate measures to reach the desired outcome within that industry with cost-effective methods.
Essentially, good workforce planning will evaluate a company’s workforce of today and strive to eliminate any gaps between the human capital requirements of the future, in alignment with the business goals.
Goals Of Strategic Workforce Planning
Organizations use a strategic workforce planning framework to align their hiring processes with the overall priorities and goals.
The goal of workforce planning is to help an organization succeed by having a workforce with the right size, shape, cost, and ability.
The right size of an organization means low friction, no vacancies and not being overstaffed.
The right shape consists of succession management and focuses on critical competencies.
Cost efficiency leads to manageable costs for maximum effect, it involves the right agility, flexibility and resilience.
This model helps:
- Identify the needs of an organization.
- Skills required to fulfill those needs.
- Staff for the successful execution.
The primary goal of workforce planning is to create a strategy for staffing needs that ensures you can meet strategic objectives both now and in the future.
To achieve this goal, workforce planning requires an in-depth understanding of
- Existing workforce
- Employee skills
- Experience
- Load capability
- Potential talent gaps
Primary Criteria For Workforce Planning
Employee numbers: getting the correct workforce size so the business is not overstaffed and inefficient but not too small to hinder growth and fail to match demand.
Skillset: having the right mix of skills, capabilities, knowledge, and experience to perform effectively and achieve your goals.
Budget: finding the optimal staffing expenditure to achieve a high return on investment from employees and maximize profits.
Flexibility: developing r workforce to be agile and adapt quickly when changes in the market occur.
Purpose Of Strategic Workforce Planning
Strategic Workforce Plan should include information around:
- Numbers – Businesses must plan to have neither too many staff nor too few, i.e. balancing recruitment levels against retirement, redundancy and other exits.
- Location – Staff must be deployed in the right regions, countries or cities to fit business needs.
- Timing – Recruitment and internal appointment systems must be managed to ensure that critical business areas do not carry long staffing gaps.
Succession planning is required for senior roles.
- Costs – A strategic workforce plan should include a budget and demonstrate the financial value added to the company by the shape and size of any proposed future workforce.
- Worker Type – The nature of the proposed workforce should reflect business needs for permanent, temporary, casual, part-time, contractor, and so on.
- Skills, Knowledge and Competencies – The workforce must maintain the key skills, knowledge and competencies required for business.
Components Of Strategic Workforce Plan
1. Mission And Vision
The strategic workforce plan should have a clear scope, timescale and links to the company’s top-level vision, aims and business plans.
2. Current Workforce Snapshot
HR leaders should conduct a full review of the shape, size and fitness of the current workforce-. Including information on demographics, locations, contract types, costs, skills, competencies.
3. Business Intelligence And Foresight Reports
A strategic workforce plan requires an assessment of current business intelligence in relevant sectors investigation of trends, opportunities and challenges likely to matter for the company along the time horizon of their business and workforce planning.
4. Staff Engagement And Public Opinion Data
Information around internal staff engagement and public perceptions of a company can help establish how they are seen as an employer.
5. Future Workforce Snapshot
This should include estimated staffing costs and long-term liabilities.
6. Transformation Roadmap
A strategic workforce plan needs a roadmap and/or action plan showing how the current workforce can be transformed into the future workforce.
Recruitment, promotion and redundancy needs should be made clear and communicated appropriately to existing staff to maintain engagement.
Core Steps For Workforce Planning
Successfully implementing new workforce planning strategies is an extensive procedure. However, businesses can break down workforce planning into core steps to simplify the process.
1. Deciding Strategic Direction And Goals
Workforce planning is a top-down process requiring clear organizational direction and defined strategic goals to inform and guide future decisions.
- What direction do you see your business going in?
- What are the primary goals/milestones you are targeting?
- Why does your business need new workforce planning structures?
Workforce planning must be an organization-wide endeavour introducing effective communication between HR and other departments.
It must be produced with a collaborative approach that generates a consensus amongst all invested parties. Without organizational buy-in and a rationale for new strategies, the benefits of workforce planning cannot be reaped.
2. Analyse Existing Workforce
Common strategies used in this step include:
- Demand Planning
- Internal Control
- Gap Analysis
- Do you have the right-sized workforce?
- What skills, knowledge, and experience do your current employees have?
- Do your employees need additional training?
- What new resources can improve workforce performance?
- Is your workforce correctly structured?
- What is your current employee turnover rate?
These are some of the issues addressed by Strategic Workforce Planning and we need to proceed in this direction.
3. Develop your Plan
Companies must take their:
- Overall goal.
- Input the assessment of their existing workforce.
- Produce a concrete plan for the future.
Rationale Of SWP
Strategic workforce planning assumes increasing importance with the passage of time as it helps companies:
- Build teams that work well together to achieve effective long-term results.
- Improve customer relations.
- Enrich talent management capabilities.
Plus, workforce planning offers the following advantages:
Demographic Change
Thanks to strategic workforce planning, younger talents gain the necessary experience to be ready for a new position.
Costs reduction
Increased global competition motivates companies to work smarter.
There is no need to spend time and money to find a new specialist when you can prepare an internal one.
Having a strategy that determines whom you need to hire, how you plan to hire them, and how to attract new recruits will increase employee retention, productivity, and return on investment (ROI).
Flexibility
Strategic workforce planning helps companies identify their business needs, skills, and talents to help them meet those needs and propel the workers to perform successfully.
Talent management
Talented employees create a competitive advantage for the company. Strategic workforce planning helps train the right people to be worthy replacements for retiring employees.
Improving KPIs
Workforce planning strategy helps you determine the desired outcomes, align human resources with business goals, and boost employee motivation and commitment.
How To Create a Strategic Workforce Plan?
Workforce planning can be described as the process of enabling an organization to have access to the resources and workers it needs to perform effectively, both now and in the future. Strategic workplace planning involves identifying the current and desired future state of the business and taking appropriate measures to reach the desired outcome within that industry with cost-effective methods.
A five-step workforce planning model considers the following elements in workforce planning.
1. Set strategic direction.
2. Analyse the workforce, identify skills gaps and conduct a workforce analysis.
3. Develop an action plan.
4. Implement an action plan.
5. Monitor, evaluate and revise.
Challenges In Strategic Workforce Planning
Complacency
A workforce plan can create the notion that everything is under control. Consequently, HR managers can lose sight of the plan.
Unpredictability
It is not always certain that the trained employees will stay with the company long enough to benefit from the investment made.
Crucial Bearing of Workforce Planning on Human Resource Management
(a) Recruitment and Employee Development
- Provides the game plan for your company’s recruitment and employee development.
- Expertise to profile the skills, experience, and knowledge required to meet your hiring and training needs.
- Ability to identify future top employees for business.
- Develop talent acquisition strategies to attract suitable manpower to the company.
- Assist the companies to formulate proper training and employee development to fill talent gaps.
(b) Succession Planning
Workforce planning together with succession planning creates a smooth transition for the critical roles in the company to provide an uninterrupted, seamless service or product for the customers.
(c) Performance Management
Managing the performance of your employees to increase productivity and efficiency becomes quite an easy affair.
It is feasible to understand and develop strategies to improve the productivity of employees to secure a higher return on investment from staffing expenditure.
Clearly, it is possible to reduce overall staffing costs by developing plans to:
- Increase productivity and workforce ROI.
- Retain talent and reduce costs associated with employee turnover.
- Develop a flexible workforce to cater to customer demand in different circumstances.
Vitals For Success Of Workforce Planning Strategy
- Use data to plan labour demand and supply by collecting and tracking the following data:
- Number of workforces
- Age and gender distribution
- Turnover rate
- Indicators of internal mobility
- Performance metrics
- Average time to hire for critical positions
2. Prepare a few scenarios to solve future challenges:
- Simulate workforce scenarios.
- Make the data-driven planning scenarios reasonable.
- Identify skills gaps.
- Develop talent management interventions to transform the workforce.
Benefits Of Workforce Planning
- To draw a clear and concise strategic workforce direction for the company.
- To ensure all workforce requirements are directly aligned with the company’s business plans.
- To facilitate the best decisions making for the structure of the organization and deployment of the workforce.
- To identify and implement skills gap reduction strategies.
- To identify and remove internal and external barriers to accomplishing strategic workforce goals.
- To acquire a streamlined talent resulting in more accurate forecasting and reduced overspending.
5 Steps to follow to Achieve Company Target in Strategic Workforce Planning:
1. Workforce Analysis
It is essential to consider the number of employees and their costs and individual skillsets.
The potential growth and development of employees should be evaluated.
2. Visualization of Future Workforce
Try to visualize the business in the next 3-5 years.
The size, cost, and performance of the organization should be given the requisite weightage.
3. Pluck the Gaps
Assess the current situation vis a vis the long-term goals of the company.
Pluck the existing skill gaps for remedial actions.
4. Correct the Gaps
Implementing recruitment strategies can help hr managers to find potential employees.
Estimate the pros and cons of internal and external recruitment.
5. Track the Progress
Keep a record of differences, both positive and negative.
In Retrospect
Workforce Planning is integral to the growth of the business organization. The organization cannot develop without staff training and development. It is imperative for the training to be of high quality, ensuring the continued growth and expansion of the company.
In the backdrop of a rapidly transforming ecosystem, the company’s workforce must be constantly trained or retrained in tune with new technologies, It must ensure that the goal is achieved with the help of modern principles, methods, technologies, and procedures aimed at the success and prosperity of the company.
“Understanding what workforce levers to pull to drive business outcomes will revolutionize the impact HR has on business performance”
(John Schwarz,CEO & Founder,Visier)
