Strategic workforce planning

 What is strategic workforce planning?

Strategic workforce planning involves analyzing workforce supply and demand data to make necessary adjustments that align with a business’s future needs and goals.(Ross Sparkman, 2021)

These strategies ensure that businesses have the right personnel in the right roles at the right time, equipped with the skills and knowledge required to achieve both current and future objectives.

Workforce plans prepare teams for growth by addressing internal needs and enabling smooth expansion. Companies forecast future hiring requirements and work to bring in the right talent at the right time by identifying potential skill gaps that may emerge as the company expands.

By evaluating its needs and strategic objectives, a business uses strategic workforce planning to explore potential solutions that will support future growth and help maintain a strong competitive edge in the market.

The 7 Rs of strategic workforce planning

1.     Right Size - Your workforce needs to be appropriately sized to meet your business requirements. An overly large workforce leads to unnecessary labor costs and inefficiencies, while a workforce that is too small can overburden employees and result in missed opportunities due to limited capacity.

2.     Right Shape - Achieving the right shape for your workforce involves aligning with both the organization’s culture and structure. The workforce should be strong yet adaptable, able to respond to changes as needed.

3.     Right Skills - Maintaining the right skills within your organization requires a clear understanding of current and future business needs. An effective strategy will focus on developing internal competencies and engaging in strategic external hiring.

4.     Right Site - Having the right people is only part of the equation; they also need to be in the right locations. Each workforce has unique needs for tools, resources, communication methods, and oversight, aiming to enhance productivity and employee satisfaction.

5.     Right Execution - This involves integrating all aspects effectively. Ensure that management, HR, and employees are aligned and engaged throughout the implementation of your plan.

6.     Right Flexibility - While specialists are valuable, having some versatility is also important. Hire individuals who are adaptable and can handle a range of tasks. As your business needs change, a flexible workforce will be beneficial.

7.     Right Culture - Your workplace culture reflects your workforce. When hiring, focus on enhancing DEIA efforts, building trust, and emphasizing employee well-being.

                                        Figure 1 : 7 R's of strategic workforce planning

Benefits of strategic work force planning

Cost Reduction - Effective strategic workforce planning ensures that you hire the right number of employees with the appropriate skills at the right time, leading to financial savings. By optimizing workforce utilization, you can avoid the expenses associated with overstaffing or understaffing and reduce unnecessary costs.

Diversity and Inclusion - Workforce planning can help achieve your diversity and inclusion goals and foster a more inclusive workplace culture. By strategically planning your workforce, you can identify opportunities to enhance diversity by bringing in individuals with varied perspectives, backgrounds, and skills.

Preparation for the Future - Workforce planning enables you to develop a long-term strategy that accommodates future technological advancements, market changes, and regulatory shifts. Although some challenges may be unforeseen, having a solid plan in place helps you adapt and respond effectively, allowing you to focus on daily operations while being prepared for future growth.

Risk Mitigation - Strategic workforce planning allows you to address potential risks and challenges before they escalate into major issues. As you expand globally, it helps ensure compliance with labor laws and regulations, and forecasting future workforce needs can prevent problems related to talent shortages or skill gaps.

Build strategic workforce planning framework

1. Define Your Long-Term Business Goals

Establishing clear, actionable goals will guide your hiring process, ensuring you bring on the right talent to meet these objectives. Focus your goals on the most critical business needs, setting a clear path for your company’s growth.

Many businesses use the S.M.A.R.T. framework for goal-setting:

• Specific: Each goal should target a specific area of your business to create a focused and meaningful objective.
• Measurable: Attach a tangible metric to each goal to track progress and demonstrate success.
• Attainable: Goals should be realistic and achievable within your organization’s capabilities and timeframe.
• Relevant: Align your goals with your company’s business model, needs, and objectives to maintain focus.
• Time-sensitive: Set deadlines to keep momentum and continue setting new objectives.

Utilize data analytics and trends in business growth to forecast future workforce needs, helping you set informed, effective goals.

2. Evaluate Your Current Workforce

An essential step in workforce planning is assessing your current team. Identify strengths and weaknesses, determining what’s working well and where there’s room for improvement.

Focus on three key workforce issues:

• Strategic Plan: Assess how well your workforce is meeting current goals and what steps are needed to achieve satisfaction.
• External Factors: Identify external influences, such as new competition, diversity initiatives, or remote work trends, that may impact your workforce.
• Workforce Maintenance: Strengthen your team with better training, a renewed focus on employee well-being, and initiatives to boost engagement before planning for growth.

Maintain a skills inventory to understand your workforce’s experience, skills, and qualifications. Identify key roles that drive value and analyze the skills needed for success, determining whether existing employees can be trained or if external hires are necessary.

3. Anticipate Future Needs and Challenges

An effective workforce plan requires anticipating future needs and potential obstacles. Planning ahead allows you to tackle these challenges proactively.

Consider your current position versus your future goals. How many staff members will be needed to complete projects or meet deadlines? If your business grows as expected, will you have enough employees in six months? If not, ensure you have the staffing to meet those future demands.

4. Conduct Market Analysis

In addition to evaluating your current workforce, analyze the market to inform your strategic workforce plan. Understanding labor trends and emerging market patterns will offer valuable insights into future staffing needs.

Keeping an eye on global trends, especially within your industry, helps you anticipate what your business needs and how to prepare. Research international markets to identify where hiring foreign employees could fill gaps and support scalable growth.

5. Address Workforce Gaps

Once you’ve assessed your current situation, future goals, and potential obstacles, you can identify gaps and finalize your workforce plan.

Filling these gaps allows you to hire people who will support your company’s growth. Build a talent pipeline of pre-qualified candidates to fill future roles as needed.

Additionally, consider whether your current roles need more employees or if new roles should be created altogether. For instance, if you’re directly managing all employees, you might need to hire managers to take on project oversight, allowing you to focus on other tasks.

6. Seek Expert Guidance

Creating an effective workforce plan may not be intuitive for every business leader. Collaborate with key stakeholders who can help implement your plan. Consider third-party organizations specializing in workforce optimization to help refine your business strategy as you grow.

Consulting with an agency can ensure you’re not only preparing for the future but also setting yourself up for success.

7. Implement and Adapt

Just as your workforce should be adaptable, so should your workforce plan? While your plan provides a roadmap for growth, adjustments may be necessary as you scale.

Unforeseen challenges may arise, requiring you to revisit and modify your hiring strategy. Stay flexible and be prepared to restructure your plan as needed.

References

Marc sokol and Beverly turuli (2024) 'Strategic workforce planning. Best practices and emerging directions', Oxford university press, pp 1-21

Foluso Aribisala (2021) Workforce planning Available at https://www.linkedin.com/pulse/7-rs-strategic-workforce-planning-foluso-aribisala accessed on 13/08/2024

Adam Rhodes (2024) The key thing banks have to get right workforce planning, Available at https://www.financederivative.com/the-key-thing-banks-have-to-get-right-workforce-planning/ , Accessed on 14/08/2024

Velocity global (2024) What is strategic workforce planning? Examples + best practices, Available at https://velocityglobal.com/resources/blog/strategic-workforce-planning/, Accessed on 14-08/2024