What is workforce planning?
Workforce planning is the process of coordinating an organisation’s human resources with its operational and strategic objectives. It involves a detailed evaluation of the current workforce, projected future needs and any discrepancies that may negatively impact the company.
For example, a healthcare organisation experiencing increased demand for telehealth services might use workforce planning to anticipate the need for more professionals skilled in digital health technologies. By identifying these needs early on, the company can take steps to recruit, train or redeploy employees to meet its new goals.
The key to effective workforce planning is its focus on ensuring that the right number of employees with the appropriate skills are in the most suitable roles and that this is ensured in the long term as well. Taking this approach is especially necessary in times when more and more industries are facing rapid changes due to economic trends, evolving workforce demographics and technological advancements such as generative AI.
Why is workforce planning important?
Workforce planning plays an essential role in ensuring that businesses stay sustainable and competitive. Specifically, it allows organisations to anticipate workforce needs, minimise disruptions and make better-informed decisions.
Preparing for change
Some industries are currently faced with challenges such as skill shortages and an ageing workforce. Workforce planning can provide the foundation for addressing these issues by helping businesses more accurately forecast future needs and adapt their strategies accordingly.
The healthcare sector, for instance, is facing increased demand for skilled professionals as Australia’s population. This is where workforce planning comes in to help healthcare providers develop new training programs, recruit staff with specialised skills and introduce perks like flexible working arrangements to retain experienced employees.
Enhancing efficiency
Workforce planning also allows companies to operate more efficiently, as it ensures that resources are allocated more effectively. By understanding workforce trends and tailoring recruitment strategies to evolving business objectives, organisations can reduce their employee turnover rates, optimise staffing levels and, ultimately, become more productive.
Gaining a competitive edge
In a competitive market, businesses that invest in workforce planning are generally better positioned to adapt to industry shifts and seize new opportunities. After all, this approach mitigates risks and increases an organisation’s ability to innovate and grow.
Related: Tomorrow’s Skills Today: Navigating the Future Workforce
Types of workforce planning
Workforce planning can be broadly divided into two categories: operational workforce planning and strategic workforce planning. Each type serves a distinct purpose, but both work together to support the overarching organisational goals.
Operational workforce planning
Operational workforce planning focuses on the short-term needs of a company. It ensures businesses have sufficient staff to meet immediate demands, such as seasonal peaks or upcoming project deadlines.
For example, a retail business might use operational workforce planning to manage staffing levels during the busy holiday season. By analysing historical sales data and forecasting customer demand, the business can schedule employees more effectively and avoid costly understaffing or overstaffing.
Strategic workforce planning
Strategic workforce planning, on the other hand, takes a long-term view. It integrates workforce strategies with the organisation’s broader goals, such as expanding into new markets or adopting emerging technologies.
An Australian technology firm, for instance, might use strategic workforce planning to prepare for the increasing growth in AI applications. This approach could include collaborating with universities to design tailored training programs or establishing internal development pathways to nurture leadership within the organisation and drive future expansion.
Both operational and strategic workforce planning are integral to good human resource management. While operational planning addresses immediate needs, strategic planning provides the vision and broader framework for lasting success.
Related: How to Hire Employees with Indeed for Employers
How to get started with workforce planning
Creating and implementing a comprehensive workforce plan requires a structured and methodical approach. The following steps outline the main components of the process:
Assessing current workforce capabilities
The first step in workforce planning is to evaluate the organisation’s current human resources situation. This includes analysing employee skills, performance, demographics and staff turnover rates. By understanding these factors, organisations can identify their strengths and areas for improvement.
For example, an analysis might reveal that a company has a strong pool of technical talent but lacks employees with leadership skills. This insight can then inform better strategies for succession planning or leadership development going forward.
Forecasting future workforce needs
The next step is to anticipate the organisation’s future workforce requirements. This can involve analysing industry trends and technological advancements as well as specific business goals to determine the exact skills and roles needed to meet these needs.
As an example, a construction business planning to adopt sustainable building practices may forecast a need for workers with expertise in green technologies. By identifying these needs early on, the company can invest in targeted training programs or recruitment initiatives.
Identifying staff shortcomings
Once future needs have been defined, organisations need to identify gaps between their current capabilities and projected requirements. Such gaps could include skill shortages or insufficient opportunities for employee development, for example.
By identifying these gaps, businesses can prioritise their efforts and focus on the most critical areas for improvement.
Related: Writing Skills-Based Job Descriptions: A Guide for Employers
Deploying actionable strategies
After identifying workforce shortcomings, organisations can create tailored strategies to address them. Some typical approaches may include:
- Retraining employees to broaden their skill sets
- Recruiting new talent to fill critical roles
- Developing leadership programs to prepare employees for future positions
For example, an IT company might collaborate with universities to create internship programs that provide students with hands-on experience in emerging technologies. This ensures a steady flow of skilled professionals into the industry that will help to meet the organisation’s future needs.
Reviewing and updating the workforce plan
It is important to keep in mind that workforce planning is an ongoing process that requires regular reviews and adjustments as needed. Monitoring the progress and analysing workforce data can help organisations identify areas for improvement and ensure their plans are still relevant.
For example, workforce analytics tools can track employee performance, retention rates and recruitment outcomes. These insights then enable businesses to make informed decisions and update their strategies as needed.
Related: 10 Employee Retention Strategies to Keep Employees Happy and Motivated
Workforce planning examples by sector
Workforce planning can be tailored to meet the specific needs of different industries and organisations. Here are some examples:
Healthcare
In the healthcare sector, workforce planning can address challenges such as increasing demand for services and a shortage of skilled professionals. Strategies may include implementing new telehealth initiatives or collaborating with educational institutions to develop tailored training programs to meet emerging needs.
Retail
Retail businesses often use workforce planning to manage staffing during seasonal peak periods. This involves analysing historical sales data, forecasting customer demand and optimising employee schedules to ensure efficient operations and resource allocation.
Technology
In the technology sector, workforce planning typically focuses on cultivating a pool of qualified professionals to drive innovation. This can include implementing training initiatives in collaboration with external providers or establishing structured in-house employee development programs.
Related: Ways to integrate technology and wellbeing in the workplace
Whether focusing on short-term operational requirements or long-term strategic goals, workforce planning ensures that businesses have access to the right talent and resources they need to perform well. This makes workforce planning a key tool that enables organisations to manage and respond effectively to changing business conditions.
