Strategic workforce planning is a meticulous job, but it's something that has to be done. Businesses are constantly changing and evolving, and so too must the employees who work for them. Many corporations find that their workforce is static, which allows for a rapid decline in organizational performance. If a company wants to keep up with the competition and be successful, it has to continuously alter its workforce planning to ensure that the company is meeting the challenges and changing needs of customers.
But what is strategic workforce planning? What benefits does it bring to a company, and what are the steps needed to utilise it properly? Read on and find out!
What Does Strategic Workforce Planning Mean?
Strategic workforce planning is a process of analysing the needs and resources of a company and then determining what its workforce needs to be in order to match those needs. It ensures that the right person is doing the right job at the right moment for the right pay. A viable workforce planning strategy also ensures that there are no instances of overstaffing or understaffing at any time.
Strategic workforce planning is done not only to solve present problems but those that may pop up in the future, too. It's a process designed to anticipate current and future hiring needs within an organisation by utilising data gleaned from HR and acquisition teams, as well as business and financial analytics.
Why Strategic Workforce Planning Is Important
Conscious, deliberate action creates a solid foundation for the future. How employees feel is a major factor in the planning of an able workforce. It also aids in the formation of cohesive teams capable of producing lasting outcomes, as well as bolsters investor relations and talent management capacities, and facilitates better communication between management and employees.
The importance of strategic workforce planning cannot be overstated. Proper planning benefits not only the company itself but also the employees that work for it. Here are a few reasons why strategic workforce planning is important:
1. Enhance Satisfaction Among Employees
Regardless of what one’s opinion may be, employees are the heart and soul of a company. They are the gears that keep the company’s engines running, and, like any good engine, they do need some TLC. By putting its employees' needs first by undergoing strategic workforce planning, a company could boost morale and productivity.
Since a key aspect of strategic workforce planning is to ensure that a company's neither understaffed nor overstaffed, creating a balance within the workforce would, in turn, ensure that no employee is overworked. It's well documented that overworking employees leads to a decrease in productivity.
As a result of this balance, an employee’s job description would become more accurate, which allows the company to improve efficiency and productivity while also enhancing employee satisfaction and motivation by allowing them to work optimally. That's a win-win situation, in other words, and the main reason why workforce planning is important.
2. Foster Collaboration
Strategic workforce planning isn't a task for one person. Teamwork is fostered in workforce planning, which is why employees from all levels of the company are included in the process. It requires a series of multi-departmental insights to identify interdepartmental links and to understand the effects of specific activities on other parts of the organisation. This can only be achieved through collaboration.
The teamwork and collaboration fostered by strategic workforce planning helps develop a stronger company bond and allow a better understanding to be built within and between teams as their needs are discussed during workforce planning and strategy meetings.
2. Achieve Financial Goals
As more and more businesses have come to understand, it's important that every employee contributes to the company's success. Strategic workforce planning allows such a contribution by increasing efficiency and productivity while reducing costs. Since the finance and HR departments of a company play a key role in developing workforce planning strategies, the two departments need to work hand in hand.
While the finance department analyses how employees contribute to the overall bottom line, they can paint a better picture of what the financial goals of the company could look like. Human resources can then use this information to make informed decisions about where to place their focus when to make key hires, how to best develop employees' skills, and how to best structure their teams to achieve their financial objectives.
This also has the effect of bringing down recruitment costs as operations are optimised. Ultimately, strategic workforce planning also helps companies to attain their financial goals by helping to determine how each employee could contribute most optimally.
4. Prepare For the Unexpected
Another key aspect of strategic workforce planning is to plan for the company's future. An effective strategic workforce plan gives the company a long-term plan for how to deal with generally unanticipated departures of staff.
While strategic workforce planning doesn't predict all of the possible future outcomes, it does lay out a plan for how to deal with them and how to best pivot to meet any challenges head-on. For instance, by adopting a plan that anticipates a skillset backup for as many roles as possible. So that if one employee decides to leave abruptly, the company still has someone else who can do their job until the position can be properly filled.
Steps For Strategic Workforce Planning
The goal of workforce planning is to close the skills gap between the organization's current workforce and the skillsets it will need in the future to implement its strategy. As soon as the discrepancy is recognised, steps can be taken to close it.
Here are the six basic (but important) steps to ensuring a successful workforce planning strategy:
1. Determine company goals
It is critical that every business develops, implements, and sustains a clear workforce strategy. This means that the goals of the organization need to be clearly defined and make certain that they are achievable. Without a clear objective, it is difficult to determine how many employees are needed to fill all positions in the company, which puts the company at risk of over- or underhiring.
During this step, both the long- and short-term objectives of the company need to be made crystal clear. As such, it's crucial to involve key players from not only finance and HR but also operations, line managers as well as C-suite executives during this process so that these defined goals can be all-encompassing yet viable for the entire company to deliver.
Strategic workforce planning is incomplete without a talent management strategy. A company can differentiate itself from rivals in the competitive global market by integrating HR policy with the overarching business strategy.
2. Analyse the current workforce
Because strategic workforce planning is all about driving performance, specific analysis needs to be performed on current employees in the company across each department. This is necessary to audit the current people that are working for the company alongside the skillsets that are readily available.
Here is where talent analytics could come in handy. To better understand what drives their present staff and potential hires, talent acquisition teams often use software that collects data about the company's workforce and the workforce at large. Information garnered here can provide insights into the employee demographics, their contracts and their career trajectories.
This analysis should be done in relation to the current business goals of the company and any trends that have clearly been identified in previous analyses. It has to be understood that some of these skills may already be present among the current staff, which means the job descriptions within each department need to be analysed.
3. Pinpoint skill gaps
Once the current workforce has been analysed, any gaps in the skillsets of a company's employee base will become clear. This will help identify any needs for future hiring – or even upskilling – and plan for it.
Skill gaps analyses are a good way to predict how the workforce will develop in the future. When an employee expects to retire, for instance, could be deduced through a skills gap analysis. The skills gap study would have allowed human resources to plan ahead of time for the departing employee's replacement.
4. Prepare for the unexpected
Successful businesses understand the importance of investing in future growth in order to maintain their position as market leaders. In order to effectively address potential issues down the road, business executives need to create a viable workforce plan that will help address potential unexpected scenarios.
Supply chain troubles and labour market worries are two examples of potential workforce problems in the future. Another example, as businesses hopefully have learned from over the last few years, is an unexpected global economic slowdown. All these instances (and more!) can be anticipated, discussed and planned for during workforce strategic planning.
Oxford Economics has found that a whopping two-thirds of companies worldwide lack a strong future vision for their workforce. This has the unfortunate effect of causing their current staff to lose productivity.
5. Develop an action plan
By knowing what the company's goals are, who is on board and who is not and what skillsets will be needed in the future, it becomes much easier to create an action plan. The strategy should always start with the company's objectives and evolve from there to incorporate things like strategies for attracting and keeping top employees, reorganising the company, and improving its use of technology.
As a result of this, a company can use its workforce strategies to achieve its overall goals. Businesses can also use the action plan to initiate broader workforce planning and even talent management, plus any unexpected issues that have been planned for can be faced in a timely manner.
6. Implement, monitor and adapt
Once an action plan has been formulated, it should be implemented as soon as possible to guarantee the best outcomes. But, the work doesn't end once the strategic workforce plan is in place. It is important to be cautious of unnecessary targets and continue focusing on maintaining performance.
In order to achieve these goals, surveys should be conducted over time to ensure that the strategic plan is being followed effectively and any changes that need to be made to the strategic workforce plan can be done as soon as possible.
Strategic workforce planning should be carried out on an ongoing basis, and the results of action plans will have to be examined in order to truly understand the impact that has been had. An ever-evolving strategic workforce plan is the best path for a company to achieve its business goals.
Strategic Workforce Planning With a Global Workforce
As the global workforce becomes increasingly remote, global workforce planning has become an indispensable element in strategic workforce planning. It may seem difficult to conduct workforce strategic planning when a company operates on a global scale, but that couldn't be further from the truth.
Here are four simple tips for workforce strategic planning on a global scale:
Establish clear work policies
From the get-go, the company should make clear various aspects of what is expected of an employee and what is to be expected of the employer. This includes job specifications, employee performance expectations (like KPIs), organisational and departmental goals and objectives, plus, when applicable, customer impacts.
Select the right people for the job
While it definitely is important to pick the right prospect that can fulfil the requirements of the role at hand, it's equally as important to ensure that the potential employee has the right stuff to work remotely. Not everyone works well on a remote basis, so this needs to be determined ASAP so that it doesn't affect overall performance down the road.
Anticipate issues and prepare to respond
As outlined in the strategic workforce planning steps above, this step is especially important when working with remote teams. The inability to respond promptly to both predictable and unpredictable issues can cause serious problems with workflow and performance.
How an EOR Helps With Global Strategic Workforce Planning
An Employer of Record, abbreviated as EOR, is a third party delegated by another company to provide and manage its global workforce. That means that, in a global workforce, it can be a very useful method of ensuring the smooth running of the company's remote teams. This is especially so because an EOR will ensure that the global team is hired in compliance with local labour laws as they carry out HR tasks on behalf of the company. In essence, an EOR acts as your company's global partner in nearly all things human resources.
A company that delegates its workforce to an EOR can easily deliver the correct level of support for its remote employees. As a global partner, they are able to help your company make smarter hiring decisions, all while staying compliant with regulations worldwide. While the EOR focuses on your employees, you can focus on the company's growth. This comes in handy when undergoing strategic workforce planning.
The EOR can assist during your company's strategic workforce planning initiatives to ensure that everything is viable for both your current and your future workforce. This can mean anything from helping with relocation decisions to finding the right people for specific jobs and roles. With strategic workforce planning, EORs can easily act as a one-stop shop to ensure that all of your company's remote employees are well taken care of.
If a company is about to undergo strategic workforce planning and wants to do so effectively, then being prepared is key. In order to be prepared, one needs to first identify the various steps that are needed to formulate a strong action plan and put them into place as early on in the process as possible.
But, when it comes to workforce planning and strategy on a global scale, an EOR can be very helpful in ensuring that the job roles are executed in a way that is accountable, cost-effective and compliant. With this, they can easily mitigate workforce planning issues that may arise. This can be advantageous to any company looking to embark on a global workforce strategy or simply needing help with one.