Workforce planning: it’s the key to making timely and relevant hiring decisions.
And it’s the ultimate HR panacea: having a strategy that informs better hiring choices based on medium to long-term business goals. The best workforce plans allow you to navigate skills shortages and avoid poor talent resourcing.
And like most business strategies, there are multiple models with nuanced differences. But the one commonality across the different workforce planning models is the target outcome. Workforce planning strategies help companies to better prepare for building the workforce their business needs in the future.
According to a UK report less than half of surveyed organisations actually use data to predict estimated future skills gaps. And only 20% of employers calculate the cost of attrition.
Today, we’re looking at the different elements of workforce planning, what’s involved in creating the right plan for your business, and the benefits for your business.
What Is Workforce Planning?
Strategic workforce planning involves reviewing and analysing current staffing levels and distribution across your business, so you can accurately estimate future hiring needs. By doing this, you’re able to better establish the right skills and experience in your business, to accomplish future targets. Recognising talent gaps between present staffing levels and future goal achievement is key to arriving at the right talent mix.
According to AHRI, the definition of workforce planning is “… about predicting future workforce needs and undertaking actions to ensure the business is prepared to meet them. It provides market intelligence to help companies pinpoint a range of challenges they may face and prepare initiatives to support long-term business goals.”
Every organisation needs the right mix and distribution of talent to achieve its goals. Strategic workforce planning equips HR with relevant workforce data so they can source talent by department and create certainty about meeting these goals.
In a world of uncertainty (political, economic, health, and social upheaval), it’s critical that organisations can attract the right talent to support shifting priorities.
The Importance of Workforce Planning: 5 Factors
Why is workforce planning so critical? Here’s why…
Today’s competitive environment requires greater staffing agility, especially during times of uncertainty and change. From health challenges like COVID to global economic insecurity, organisations today need to be able to pivot, to survive. Also, when market opportunities present themselves, adopting new business models and taking on additional staff needs to happen calmly and effectively, all of which can be achieved under a strategic workforce plan.
- Talent Management
Quality talent in a business offers a significant competitive advantage. Typically, highly skilled workers are great for driving innovation and growth. A business operating with a strategic workforce plan can sustain the expertise and skills diversity to deliver ongoing business success.
- Boosts Collaboration
The best workforce plans are created collaboratively, involving key stakeholders from departments across the business. The ‘planning’ stage of workforce planning allows you to see cross-departmental needs or similarities, and plan for talent allocations accordingly. The great thing too, is that giving stakeholders a say in planning allows for debate, identification of potential hurdles and room for conciliation. All within the workforce budget.
- Cost Reduction
There remains a skills gap in a number of job families. This typically means it’s harder for organisations to source and hire quality, highly skilled talent. So as part of the workforce planning process, it’s ideal to consider not only new, future hires but also, the upskilling and reskilling of existing workers. Replacing talent is expensive. So being innovative about workforce planning will not only keep your talent levels accurate and fit-for-purpose, it will keep your workforce costs down.
- Solidifying the HR/Finance Relationship
Forging a robust relationship between the HR team and finance will be crucial for your workforce planning to succeed. As long as the two teams work collaboratively with the long-term company goals in mind, they can reach an agreement on the requirements and impact of talent across the business, especially in sales, processes, technology, and operations.
The finance department must determine how the workforce is contributing to the company, and HR can use these insights to allocate resources and hire the right talent. This creates the optimum workforce, which aligns with the company’s financial goals.
What’s Involved in Workforce Planning?
Workforce planning happens in stages. The first stage focuses on gathering data and insights into the organisation’s performance, resourcing and future goals. Then, using this intel to establish the future need for skilled workers.
The six stages of workforce planning that we’ve identified are:
- Identify objectives:
- What are your short-term and long-term business objectives?
- Involve all key stakeholders in this step including line managers, finance, IT, as well as the relevant business partners
- Analyse the current workforce:
- This is both a quantitative and qualitative analysis
- Consider staff that are high performing, those that aren’t
- Outcomes here are crucial to the next step.
- Determine skills gaps:
- A skills gap analysis will allow you to accurately predict future talent needs, based on current skills in the business
- This gap analysis will enable you to consider likely future talent events, for example, if someone is about to retire. The loss of that worker needs to be planned for, ahead of time. Hence why this gap analysis is so important.
- Anticipate Potential Future Concerns
- Anticipating future workforce issues needs to be done both internally and externally. For example, internally you might look at the expected skills gaps based on goal attainment. And externally, you will consider market trends, workforce accessibility by industry and job family, industry changes
- Being able to predict and prepare for the future provides a powerful competitive and talent-competitive advantage.
- Develop and Deploy the Action Plan
- Having all the workforce data and analysis documented, the action plan needs to be constructed
- The action plan includes detail such as strategies for hiring, promoting, upskilling or redeploying talent. It will also factor in macro issues such as technology needs, the housing of workers, and the inclusion of hybrid and contingent workers
- Deploying the plan will involve working with leadership and hiring managers to ensure all the required resources are available to take action.
- Test and Monitor the Workforce Plan
- Be ready to make changes to the workforce plan, after observing its impact in the short-term
- If certain components aren’t working to serve the business, don’t delay in making changes
- Be prepared to identify where progress is being made, and where it may be lacking.
Workforce planning isn’t just about hiring new workers. It’s about comprehensively assessing the skills your business has now, the skills it will need in the future to meet projections and goals, and the most efficient pathway to get there.
Hiring highly skilled workers isn’t easy. And neither is retaining quality talent. And in these uncertain times, where some workers are looking for alternatives to the standard 9-5/Monday-Friday job, employers need to get creative.
By conducting thorough, strategic workforce planning, your business will be in the optimum position to train, retain, source and hire the best people for your business.
Here are the other benefits you’ll reap from strategic workforce planning:
The Opportunity to Leverage External HR Partnerships
As part of the workforce planning process, it helps to have solid external partnerships in place, such as talent partners and other HR partners. These guys know your business. They know your culture. They know your technology. And they know how you like to work.
So when you’re undertaking workforce planning, you can forward-plan to engage these partners for project support, short-term talent sourcing support or a myriad of other talent support solutions (like sourcing and managing contract workers). The point is, by embedding these partners in your thinking and your workforce planning, you’ll be able to dial up and dial down your resources for those times you know are going to be busy. And, for those times that are unexpectedly busy.
I discussed an apt example of this in a recent Tapod podcast, with our client from Medibank. CXC was called in to deploy our new Recruiter On Demand service, to help Medibank when they needed support for a hiring campaign. As Medibank already knew CXC – we are their vendor for contractor management solutions – we were able to maintain hiring momentum for the campaign.
And because we were able to undertake a robust handover, briefing and implementation with Medibank, our recruiter services for this specific recruitment campaign were bang on. No lack of understanding of the project. No poor onboarding of our recruiting people. We were part of the plan and it worked.
HR Becomes Aligned with the Macro Business Strategy
Your HR department is the crucial player in workforce planning. By collaborating with leadership and business partners, HR is able to forge strong bonds across the business, as all parties work to the same end game. This is particularly important for boosting a positive company culture, and subsequently talent retention. HR’s role in the workforce planning process enables them to establish or reaffirm important company policies, such as:
- Initiatives for learning and development of existing talent
- Career mapping and succession planning
- Talent performance and participation data supply, review, analysis
- The protection of workforce data
- The company’s Employee Assistance Program
- Upskilling and reskilling initiatives
- Employee benefits across job categories and rankings
- Wellbeing, health and related programs
- The company’s approach to remote and hybrid working
- Approach to filling skills gaps
- Comprehensive onboarding strategy
Workforce planning allows the business to analyse and recognise quality talent amongst the ranks. By taking data insights into worker performance, especially at the high-performing level, the business can establish a comprehensive retention plan. This can include initiatives such as:
- Remuneration strategy
- Succession planning
- Career mapping
- Training and development
BETTER MANAGEMENT OF HIRING COSTS
Managing hiring costs can be a complex issue. And employee turnover is expensive.
But when you have the right strategy in place which tells you what skills you need to hire, when, and how you’ll find those skills, you’re way ahead of the competition. And with the focus on the right ‘fit’ in the business, you’ll see better ROI on your talent investment, and improved retention rates.
OVERCOMES TALENT GAPS
Skills gaps can be a major hand break for business expansion and growth. But, if your workforce planning strategy and business goals are closely aligned, you can recognise the skills you have in the business today, and identify those you’ll need in the future when you reach the time for expansion or diversification.
And as I mentioned earlier, being able to plan for future skills gaps – like when someone retires – will mean your business won’t become skills deficient.
A BETTER RECRUITMENT PROCESS
Hiring requires you to go to market with a certain type of worker in mind. Someone not only with the right technical skills sought by the business but also, someone who is the right cultural fit.
Workforce planning will allow you to build a candidate persona that identifies the ideal characteristics, personality traits, skills and nuances of high-performing individuals. And your recruitment strategy can be tailored accordingly, allowing you to vet these candidates as they come through your hiring process.
This process will also help to hire according to company culture, so hiring managers know who would fit best in their department, and the company overall.
Workforce planning allows you to know when it’s time to go to market, upskill or shift your hiring and talent management approach. Successful organisations with a robust workforce plan in place can forecast talent market trends and respond accordingly. Workforce planning is arguably one of the most important, strategic management initiatives a business can take.
Finally, please do contact us if you have any feedback or comments.
For more than 30 years now, CXC has partnered with thousands of organisations to payroll and manage their contractor workforce. So, it makes sense, that we are all over it when it comes to understanding our clients’ recruitment challenges.
As part of our suite of talent solutions, CXC now offers clients a Recruiter on Demand service.
During peak recruitment periods or when your current recruitment team is at capacity, CXC can seamlessly embed an experienced talent partner to work within your internal talent team on a temporary basis – ranging from 1 to 3 months, to recruit permanent, fixed-term contract and contingent roles.
Even in the most urgent situation, CXC’s Recruiter on Demand will give you the extra support you need to uphold your internal recruitment activity with hiring managers with no disruption to your everyday operations. Listen to Vicki Carolan (that’s me!) from CXC being interviewed with our client from Medibank, on the Podcast ‘TaPod’, right here.