What is strategic workforce planning?
Strategic workforce planning is the process of analysing all facets of the workforce and determining if and how it will meet the business’s future operational requirements and goals. While the types of employees, such as their occupations, and headcount are analysed, strategic workforce planning goes beyond these measures. For example, the skills held by personnel, budgets and succession plans are all considered as part of this process.
Strategic workforce planning is usually undertaken once a business’s strategic plan is in place. When you know what you want your business to achieve long term, you can start planning the workforce requirements to work towards those goals. It is a process that you may decide to assign solely to your human resources team, or you may want to bring senior leaders from other departments into the planning process.
The difference between strategic and general workforce planning
Many employers will plan their workforce to meet imminent future needs but strategic planning places a more tactical and forward-thinking lens to this process. The differences may seem nuanced but general and strategic workforce planning are not the same.
General workforce planning
This may consider the budget and the workload for the coming year and any need to adjust the headcount accordingly. It may also consider immediate and emerging needs, such as if the business suddenly gains a new contract or an employee resigns.
Strategic workforce planning
This will consider the same types of measures as general workforce planning but will develop them in concert with where the business wants to be in three or five years, or the period for which your strategic plan covers.
Strategic workforce planning may consider the budget and workload but cast forward to when more or fewer staff will be required. For example, strategic workforce planning may identify workload peaks and troughs, so you may decide to hire temporary staff to get your operations through the busy times rather than hiring full-time staff.
Strategic workforce planning may also examine the skills gap by analysing a timeline or deadline by which staff will need to be well-equipped in these skills and implementing a training program to ensure they have them by this time. This may allow training programs to be completed during quiet periods or for staff to be trained department-by-department rather than having all personnel upskill at the same time.
When it comes to recruitment and succession planning, your workforce planning strategy may consider whether the same workers are hired or if another type of worker may be better suited to meet business needs. For example, a mechanical workshop may determine that hiring a diesel mechanic or automotive electrician is more beneficial than hiring a motor mechanic because of the changing types of vehicles that drivers will buy in future. It may also involve introducing intern or apprenticeship programs to ensure a steady flow of recruits into the business for years to come.
What to consider when developing a workforce planning strategy?
Following the 7 Rs of strategic workforce planning can help you to ensure you cover all the required facets:
Right people
This may include examining whether employees share and appreciate your company values but might also add something new that will positively contribute to your culture.
Right shape
The shape of the workforce is its configuration and competency, and it may entail the proportion of entry-level, mid-level and senior staff. It may be the configuration of departments established within your business, such as whether your business needs separate sales and marketing departments or one department that combines the two areas. It may also consider whether existing employees can be promoted or can mentor junior employees.
Right size
This involves the number of employees. It may also consider the employment arrangement, such as the mix of full-time and part-time employees.
Right skills
The right skills involve workers’ ability to do their jobs efficiently and productively. This may also determine whether existing employees can be upskilled in those skills, or whether additional talent will need to be sourced to fill new roles.
Right cost
This does not necessarily mean that the workforce is employed at the lowest cost to the business. The budget will be considered, but other costs beyond remuneration may also be considered.
For example, it may look at whether an employee benefits program may be attractive to workers and what costs that will entail. It may determine that an experienced leader is brought into the business at a higher cost than a regular employee to help mentor staff, which may lead to a more skilled workforce over time.
Right time
The timing of increasing or decreasing the workforce or bringing in new skilled workers can be important, as too few employees may prevent the workload from being completed, and too many may lead to excessive costs.
Right place
This may identify where employees will work. For some businesses, this will be locations for expansion, such as an additional office. For others, it may be creating a remote workforce.
The benefits of strategic workforce planning
Strategic workforce planning may require extra time and work by yourself or your senior leaders, but there are benefits to it. These include:
Overcome skill shortages
By not thinking strategically, employers risk not being able to find skilled staff when they are required. For example, to avoid a skills gap, you may implement training programs or recruit junior staff now who can develop the skills and experience over time.
Keep up with industry trends
Employers may not consider industry trends in their day-to-day roles, so strategic workforce planning provides time to analyse the new and emerging trends and how they may affect the business. For example, flexible working arrangements have become more common in workplaces, so you may want to find ways to offer these to your employees.
Give employees certainty
While a strategic workforce plan will need to be audited at regular periods to ensure it still meets business goals, setting the framework will enable employees to focus and develop programs to meet its goals. For example, HR leaders may work on developing partnerships with vocational colleges and universities to help you secure the brightest new workers, if hiring graduates is your workforce planning strategy.
Increase resilience
Having a workforce planning strategy still means your business can operate fluidly if the need arises. It ensures the business does not grow too quickly, for example, as recruitment plans can be postponed until the workload meets business goals. Meanwhile, if employees need to have certain skills sooner than expected, they may already be trained or have obtained some of the skills they require.
Strategic workforce planning requires employers to have a business strategy in place, as well as to take the time to analyse what this strategy means in terms of their workforce. Once this is completed, a workforce planning strategy can set businesses on the path to success by ensuring they have the right workers when they need them.
