This is undoubtedly a difficult time to be in business, with ever-increasing competition and escalating expectations from clients and customers, meaning planning is essential for those that want to stay ahead.
Attempting to foresee upturns and downturns in particular sectors is par for the course, but chief human resources officers are increasingly becoming aware of the need to prepare the workforce for potential shocks too.
At a time when adaptability is essential, workforce planning is being seen as more critical than ever in the fight to perform effectively.
What is workforce planning?
Workforce planning is the process by which organizations ensure they have access to all the human capital they need in order to perform effectively.
In short, it's putting the most qualified employees in the right roles at the best time to create the Goldilocks situation: neither over nor understaffed, but just right.
This requires careful analysis, forecasting and assessment of workforce gaps to explore the best ways to make appropriate staffing decisions so you can deliver for your customers and achieve your organizational goals.
Why is workforce planning important?
CHROs are under more pressure than ever to attract and retain the best talent, particularly at this time of economic uncertainty. With workforce planning, managers are able to use the information that has been gleaned to anticipate change and address forthcoming problems with personnel.
You might be experiencing challenges such as having a lot of people on the cusp of retirement, or you're approving so much overtime that the cost is eating into your budget.
Workforce planning will help you anticipate staff turnover and other human capital issues and plan ahead for them, whether that's through moving people from other teams, hiring temporary staff, implementing mentorships to ensure older workers pass on their skills or any other initiative.
Workloads can be redistributed and resources assessed to respond to challenges and identify risks before they affect the goals of the business as a whole. This may be vital in achieving a competitive advantage going forward.
6 steps to efficient workforce planning
Effective workforce planning relies on rigorous and comprehensive analysis of your organization's work, personnel and strategic direction. Following these steps will help you break the process down more easily.
1. Understand your business and its objectives
If you want a plan for your workforce, first you need to understand the strategy of your company as a whole. Where is the business heading? Where does the C-Suite want it to be in five years? Only by understanding key mission goals can you recognize how the workforce must be aligned in order for them to be achieved.
2. Use analytics to understand staff supply
Just like a warehouse manager does a stock-take, CHROs must establish what the workforce looks like now and how it might alter over time. Implement analytics programs to deduce what skills your people have, how turnover may affect service delivery, which positions are difficult to fill and other key questions.
3. Determine future needs
Demand analysis comes next as you take a look at what requirements your workforce will be required to meet now and in the future. For instance, what's driving their workload? How many staff are needed for particular projects? How might changes in technology alter workforce efficiency and the level of demand placed on your people?
4. Mind the gaps
Once you have supply and demand pinned down, you can identify skills and resource gaps in your workforce and how they're affecting performance.
Retirement could be a big consideration here. Can you see that a large percentage of your staff are approaching retirement age and will be leaving in a few years? Will you train existing employees to replace them or use gig workers?
5. Take action
It's time to implement solutions next as you seek out the most appropriate interventions and actions to close the gaps you've already identified. This might require asking for help, whether that's from other departments within your organization or companies that offer the solutions you need.
However you do it, your action plan should create an agile and adaptable workforce that can restructure whenever change dictates it.
6. Monitor progress
Finally, remember that you must continually monitor your workforce planning solutions to ensure they remain fit for purpose in helping the business achieve its objectives. This is crucial if you want to be confident that the measures you have in place are suited to the company's current challenges and priorities.
The link between workforce planning and succession planning
Workforce planning and succession planning are separate concepts, despite the fact that their goals (right people, right jobs, right time) are closely linked.
Workforce planning is more budget-driven and concentrates on using predetermined objectives to compare the requirements of your people with the needs of your business. It provides refined information on how anticipated changes might affect competency going forward.
In contrast, succession planning provides insight into who has the right skills to ensure the workforce is trained and ready to assume future leadership positions. It takes a more systematic approach in addressing gaps and reducing costs.
However, they are intrinsically linked and CHROs are likely to see the best results when both management approaches are combined to provide a wider overview of how everything is working together.