Every year, Strategic Workforce Planning is becoming a more important aspect of Human Resources. It focuses on four major criteria: the right size, the right shape, the right cost and the right agility. Let’s take a closer look at the relationship between strategic workforce planning and recruitment!
What is Strategic Workforce Planning?
Let’s start off with the definition of Strategic Workforce Planning:
Strategic Workforce Planning is putting the right people in the right job at the right moment. Planning ahead for things like demographic changes, talent management, cost reduction and flexibility, allows your organization to be prepared for the future.
With Demographic Changes, you have to look at the structure of the population of your workforce. Do you have an ageing workforce? Consider hiring younger employees so they can be onboarded before older employees retire, to prevent a gap in your workforce. With Talent Management, you look at your current workforce to determine who should replace senior management and executives when the time is right. Look for people with high potential and the right drive. Cost Reduction should always play a part in planning your workforce. A senior employee isn’t always more productive than a junior employee, but does cost your organization more money. This makes your organization less competitive in the long term. With Flexibility, we are saying that your organization needs to be able to adapt to new situations. New technologies change organizations around the world. Make sure your workforce is ready for the things to come!
How can I start with Strategic Workforce Planning in my Organization?
We have listed five easy to follow steps for you to start off with Strategic Workforce Planning. On each of the five steps we will get into detail later, but in summary the steps are:
- Understand internal- and external factors and set goals
- Conduct a profile analysis of your current workforce
- Balance current and future workforce requirements
- Gap analysis and development plan for strategic workforce planning
- Review and evaluate your strategic workforce planning
Understand internal- and external factors and set goals
What are the business goals?
Business goals should tell you what the outcome of the workforce planning process should be. This could be anything from creating a whole new legal entity with workers to reducing headcounts within low productive departments within the business.
Setting out business goals and outcomes is essential when you are looking at strategically planning the businesses workforce. Whether it is an aging workforce, overloading workloads or business expansion, understanding why changes need to be made within the business is fundamental to a business’s longevity.
Overall, any business goal is to increase profitability and provide sustainable business growth. However, there are other goals to think about and factor in when workforce planning could be related to the companies core values, employee productivity and performance, employee attraction and retention and staying ahead of the competition.
What are the internal and external factors that may impact on reaching these goals?
Everyone reacts to change differently and this includes your workers. Some workers will accept and thrive at the possibility of upskilling and acting up whilst others may see change as a negative and do not want to be moved or upskilled from the position they have held for many years. We are seeing more and more internally impacting factors that prevent businesses from reach their goals such as worker motivation then leading to high turnaround in retention.
Moving away from the conventional ways of working and allowing workers who are not accustom to change dictate the way in which the business is planning for the future can be a thing of the past by moving with the technological times and attracting the right people to fulfil the future way of working.
There are also the external factors such as pandemics which we have seen over the past year that no businesses would have foreseen when they sat down together to plan out the next 12 months.
What does this mean for the workforce?
These changes can have a major impact on your workforce. We have all seen the layoffs when the COVID-19 pandemic hit for instance. Nothing goes as planned, this is also very true for HR departments. But sticking to a solid Strategic Workforce Plan allows you to be prepared at so you can easily adapt to new situations.
Conduct a profile analysis of your current workforce
What is going to need to change to help meet the goals?
Knowing what is going to be changed in order to meet the business goals and forecasts is fundamental. You may know what the outcome of a goal should be and you may know why but how to get to that point is something which is required and sometimes overlooked within the planning phase. Knowing this could mean the business needs to resource current workers with the necessary skill set to the project or consider recruiting externally to fulfill the needs of the change requirements. In other words: Workforce forecasting is crucial in strategic workforce planning.
What types of information would be useful when considering the current workforce?
Businesses should always strive to look inhouse at the current workforce before considering external recruitment. Employee development and upskilling is a financially effective way to promote and motivate your current workforce. Look for employees within the business who want to take that next step in their career and use performance management to assist in that transition. FourVision offers a Performance Management solution for Dynamics 365 HR. With this solution, you can keep track of your employees progress in their Career Development Plan (CDP). In addition to this, you can also configure workflow requirements tailored to specific positions within your organization. These can be linked to (future) goals for individual employees.
Businesses should also look towards information such as demographics, project experience, performance and succession planning in order to come to better understand the current workforce and how they can adapt to meet the need for the business goals.
Balance current and future workforce requirements
Does the current workforce have all the skills, capability, and capacity to achieve the future plans, or will some changes be required?
As stated at the top of this blog, every business goal is to become bigger and better. In order to achieve this you must look at what you have and how you can develop what you have to become bigger and better. This is the same with a business workforce. It is much more cost effect to grow an employee and develop an employee internally then it is to look externally. Using the method of upskilling and promoting internally leaves space for fresh faced workers looking to step onto the career ladder for the first time. This gives them a real chance to shine, not mentioning how cost effective this would be.
Gap analysis and development plan for strategic workforce planning
What’s the difference between what we have and what is needed?
Knowing what skills you already have within the workforce is key. Too many times, businesses go on a huge recruitment drive, bringing in new workers when they have the abilities and skills within house. They just may be in the wrong job or overlooked. Using the Performance Management and Succession Web App you can easily view your workforce and their abilities. You can also view how they want their career path to go and set goals and targets for them to achieve that.
What are the skills, capabilities and competencies that will be required?
This all depends on the business goal itself. If a business is looking to scale up, then a cost effective way would be to upskill and promote from within. You can do so by using recruitment to backfill externally for the lower level positions this leaves behind. This should form part of step one in the process. Knowing what your business goals are and combining with step 2, how do you achieve this goal with what you currently have.
Review and evaluate your strategic workforce planning
Review the plan when there are significant changes, or at least once a year
You can plan, as a business, day and night but external and internal surprise factors and issues will always arise. Plans never go to plan! It is key that you refresh and re-evaluate the plan from time to time. For instance, when a key worker is no longer with the business or taking some family leave. It may be a pandemic which forces your key workforce to work from home and there may be changes that need to take place in order to meet your business goals remotely.
Use the lessons learnt to support future improvements in the planning process
Gathering lessons learnt from previous workforce planning projects is a key way to ensure that some of the internal or external factors you didn’t foresee can be factored in to future plans. Knowing what contingency needs to be in place assists with the business accuracy and can help from a budgeting perspective (no surprise costs due to no contingency).
We can help you out with your Strategic Workforce Planning
FourVision is the leading global implementation partner for Microsoft Dynamics 365 Human Resources. As Partner of the Year, we know how to enhance the lives of you workforce. We do so with Dynamics 365 HR and our own Web Apps that enhance the already strong solution by Microsoft. Click here to view our solutions or feel free to reach out to us.
Do you want to learn more about Strategic Workforce Planning? Read our other blogs:
- Let’s talk about Workforce Planning
- The link between Succession Planning and Workforce Planning
- Listen to Andrew’s episode on the podcast about People Strategy to get more insight