What is strategic workforce planning?
Although the terms ‘workforce planning’ and ‘strategic workforce planning’ are often used interchangeably, the former involves day-to-day practices while the latter is a more holistic approach. Strategic workforce planning is setting a vision for your company that goes beyond the now and extends three to five years into the future. This process involves considering your company’s short-term, medium-term and long-term objectives and goals, and planning different potential scenarios.
Examples of strategic workforce planning
Strategic workforce planning can be viewed as a set of actions. Let’s look at some key ones that we’ve identified.
- Locating talent:This involves considering the skills gaps in your current workforce as well as ones that may arise in the future, for example, if certain key employees are planning to change roles or retire or if your business is on track to expand. This task can also include an overhaul of your recruitment strategies or taking advantage of the rise of remote and hybrid working to recruit skilled talent from different regions or even overseas. Diversity and inclusion targets are another important factor to consider in your recruitment processes.
- Finding the right skills: This doesn’t have to mean recruitment (although hiring strategies are typically part of this task). It’s quite common for employees to be underutilised in their roles or to possess potential that you can mould through training, courses and mentorship.
- Placing employees in the right location: If your company has multiple branches, it’s important that key talent are distributed correctly. Every part of the organisation requires a balance of experienced and newer staff as well as different skills to ensure each location’s operations run effectively. This task can also involve deciding whether certain employees could switch to remote or hybrid working and vice versa.
- Planning employment timelines: It can be tough to think of valued employees leaving your company, but in today’s corporate landscape, retaining people from graduation to retirement is a rarity. Aside from retirement, people leave companies for many reasons, like new opportunities, career changes or overseas moves, as well as personal reasons like parenthood, caretaking or health challenges. Planning timelines involves foreseeing moves when possible, but it can also include hiring contract or freelance workers or offering secondments to existing employees to fulfil specific, short-term or fixed-duration needs. Risk management and conducting risk assessments can also be useful when undertaking this task.
- Allocating resources: This is a two-fold task. One part involves your employee resources. This means using research, data and strategy to decide where to place each employee to maximise their potential and cover any gaps in workflows. It’s also about maintaining a functional balance between management and lower-level employees in each team or location and evenly distributing employees who have similar skill sets. The other part relates to allocating your financial resources. As a business owner, you want to employ the best, but top talent can come with a high price tag. A thorough budget and financial forecasting can help you decide how many highly skilled individuals you can recruit and for which roles.
Benefits of strategic workforce planning
Strategic workforce planning can benefit your company in many ways. Let’s review a few key advantages of the practice.
- Creates a long-term recruitment strategy that takes into account potential future risks.
- Allows a deeper understanding of your entire staff, including employees’ strengths and weaknesses and their likely career progression. It also allows you to anticipate change by identifying when and where employees may need to be replaced in the future.
- In-depth research allows you to pinpoint issues. Strategic workforce planning puts your human capital under a microscope. This can provide valuable information like your turnover rate and employee satisfaction levels. If these aren’t up to scratch, you can take action to improve.
- Decreases hiring costs. Through strategic workforce planning, you can streamline your recruitment process, making it more efficient and cost effective while still acquiring quality talent.
- Helps align your HR processes with the overall business strategy and long-term objectives.
- Encourages employees to grow. By prioritising developing existing talent over new hires, employees can receive the investment and guidance they need to fulfil their potential. This can lead to enhanced employee satisfaction and better retention. If yours is a customer-facing business, having experienced and fulfilled employees can directly impact the quality of customer service and your company’s reputation.
Implementation: a strategic workforce planning framework
When diving into strategic workforce planning, you can divide tasks into different sub-categories to make the process clearer and more organised. Let’s break these steps down.
1. Establish your baseline
This first step involves taking stock of your existing talent and their skills as well as how their roles are currently positioned within the organisation. Because strategic workforce planning is a long-term endeavour, it’s also crucial to have a deep understanding of your company’s operating model, organisational strategy and current method of workforce planning (if any). Two popular business tools that you can use to help you establish your baseline are a PESTLE analysis and a SWOT analysis.
2. Analyse current and future goals and challenges
Once you have a firm idea of your existing talent pool and organisational structure, you can begin outlining the business’s three- to five-year trajectory. This includes both current and future goals. During this step, you can determine what essential duties your goals require and which key employees are best placed for these. It’s also a good idea to establish contingency plans in case any of these valuable employees leave unexpectedly.
3. Identify skills gaps
After assessing your existing workforce and setting goals, you can get a solid idea about which areas of your business are underdeveloped and what skills are still needed to achieve your goals. Conversely, you could also look at which employees have skills that aren’t being used and decide whether these people may be better suited to a different role or new responsibilities.
4. Devise potential solutions
These solutions can also be viewed as action plans. During this problem-solving process, you need to figure out ways to close the skills gaps that you’ve identified. This requires determining which existing employees can be developed and which roles you need to recruit externally for. This is a two-part task. The first involves coming up with development actions for team members, like education, training, shadowing, management secondments and mentoring. The second part involves overhauling your recruitment process to align with your goals and available resources. The actions we listed earlier in this article also come into play during this stage.
5. Put solutions into practice
Involve your HR department when putting your plans into action, especially for the recruitment component. When it comes to skills, training and mentoring, try bringing your managers and most experienced employees on board. Your highly skilled workers can be a great asset to workforce planning, as less experienced staff can learn from working with them on projects and tasks instead of having to take time out of work for more formal training. It’s also a good idea to bring stakeholders to the table with strategic workforce planning, especially because it’s such a future-focused endeavour.
6. Monitor and evaluate changes
Communication is vital during this stage, and all departments at your company need to be included in the process. Your HR department and managers can provide valuable feedback on how your plans are developing in real time and where changes can be made. You can also use people analytics and other data to determine the success of your actions so far and forecast how they might continue to develop in the future.
Strategic workforce planning creates a bridge between the present state and potential future of your company’s human capital. By taking a holistic approach – analysing goals, identifying skills gaps and implementing effective solutions – you not only prepare your company for its future plans but also create an environment where employees can flourish.
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