As the business landscape becomes more complex and competitive, organizations are realizing the importance of Strategic Workforce Planning.
According to Workday, 49% of leaders surveyed said an inability to link operational, people, and financial data to business outcomes impairs business agility.
This process involves analyzing the current and future state of the workforce, identifying gaps in skills and talent, and developing a plan to fill those gaps.
Strategic Workforce Planning is not a one-time event, but an ongoing process that requires continuous monitoring and adjustment.
Strategic Workforce Planning allows businesses to be proactive rather than reactive when it comes to their workforce needs.
By anticipating changes in the workforce, organizations can better prepare for them and minimize disruption.
The recent layoffs made by several tech companies already showed the benefits of having Strategic Workforce Planning.
If an organization does Strategic Workforce Planning well, then it should be able to forecast accurately the number of employees needed for the near and long term, and in this case, avoid making layoffs.
Take, for example, the tech company Carousell in Singapore. CEO of Carousell Siu Rui Quek mentioned he “was too optimistic” about the recovery from the COVID pandemic and even doubled down on recruitment and investment for its business.
Quite possibly, there might be a lack of ongoing Strategic Workforce Planning in Carousell that resulted in sudden massive job cuts.
Carousell is not alone in arguably not implementing proper Strategic Workforce Planning in its organization.
Tech giants such as Twitter, Google, and Amazon were not spared the blushes when they announced massive layoffs recently.
The benefits of strategic workforce planning are numerous.
It can lead to increased organizational agility, as businesses are better able to adapt to changes in the market or industry.
According to Harvard Business Review, Philips, a global health technology leader, was originally managing its global workforce planning primarily with disparate, legacy spreadsheet-based systems. Once it transited to a unified workforce planning platform, the company created a single source of truth, aligned processes, and gained better performance and accuracy for its headcount costs
It can also improve employee engagement, as employees feel valued and supported by an organization that is investing in their development.
Additionally, strategic workforce planning can enhance talent retention, as employees are more likely to stay with a company that offers opportunities for growth and advancement.
Finally, it can reduce costs and increase profitability, as businesses are able to optimize their workforce and avoid unnecessary expenditures.
For example, if a company knows that a certain skill set will be in high demand in the future, it can start training employees or recruiting new hires with those skills now, rather than scrambling to fill the gap when it becomes a critical need.
Of course, there are also challenges to strategic workforce planning.
One of the biggest is the difficulty in forecasting future workforce needs.
No one can predict with certainty what the workforce will look like five or ten years from now, and businesses must be prepared for a range of possibilities.
Additionally, managing workforce diversity and inclusion can be a challenge, as businesses strive to create a workforce that is representative of the communities they serve.
Balancing short-term and long-term workforce needs is also a challenge, as businesses must balance the need to meet immediate demands with the need to prepare for the future.
Finally, integrating workforce planning with business strategy can be a challenge, as businesses must ensure that their workforce plan aligns with their overall goals and objectives.
Despite these challenges, strategic workforce planning is essential for businesses that want to remain competitive and successful in today’s ever-changing landscape.
In the following sections, we will explore the steps involved in strategic workforce planning, the benefits and challenges of the process, and best practices for successful implementation.
Before we venture further into this article, we like to share who we are and what we do.
About 9cv9
9cv9 is a business tech startup based in Singapore with a strong presence all over the world.
With over six years of startup and business experience, and being highly involved in connecting with thousands of companies and startups, the 9cv9 team has listed some important learning points in this overview of Strategic Workforce Planning in organizations.
If your company needs recruitment and headhunting services, you can use 9cv9 headhunting and recruitment services to hire top talents and candidates. Find out more here, or send over an email to hello@9cv9.com.
Strategic Workforce Planning. What is it and How to implement it? (Updated in 2023)
- Definition of Strategic Workforce Planning
- Why is Strategic Workforce Planning important?
- Steps to implement Strategic Workforce Planning
Definition of Strategic Workforce Planning
Strategic workforce planning is a process of analyzing and forecasting an organization’s future workforce needs, and developing a plan to ensure that the organization has the right people with the right skills in the right place at the right time.
The goal of strategic workforce planning is to align the workforce with the organization’s goals and objectives and to anticipate and prepare for changes in the workforce such as shifting demographics, emerging skills, and new technologies.
The process involves identifying gaps in the current workforce, projecting future workforce needs, developing strategies to address those needs, and evaluating the effectiveness of those strategies.
Strategic workforce planning is a continuous process that requires ongoing monitoring and adjustment to ensure that the organization is prepared for any changes in the workforce.
Why is Strategic Workforce Planning important?
Strategic workforce planning is crucial for businesses for several reasons:
- Anticipation of future workforce needs: By forecasting future workforce needs, businesses can proactively identify potential skill gaps, talent shortages, or overstaffing. This allows them to take timely measures such as recruitment, upskilling, reskilling, or downsizing to ensure that they have the right workforce to meet their business goals.
- Cost Savings: By allocating resources strategically and streamlining hiring processes, businesses can create a more efficient cost plan. Planning recruitment efforts in advance, managing employee turnover, and retaining top talent can all contribute to greater productivity and reduced costs. By taking a proactive approach to workforce planning and talent management, businesses can position themselves for success in the long run.
- Alignment with business strategy: Strategic workforce planning helps businesses align their workforce with their overall business strategy. This ensures that the workforce has the skills and knowledge required to meet the organization’s goals and that they are focused on the right areas of the business.
- Improved employee engagement: Strategic workforce planning involves identifying employee development opportunities, which can lead to increased employee engagement and retention. Employees are more likely to stay with an organization that invests in their growth and development.
- Better decision-making: By having a clear understanding of the current and future workforce needs, businesses can make informed decisions about recruitment, succession planning, and workforce development. This can result in cost savings and increased profitability.
- Increased organizational agility: By anticipating and preparing for changes in the workforce, businesses can adapt more quickly to market or industry changes. This can help them stay ahead of the competition and respond to new opportunities or challenges more effectively.
Overall, strategic workforce planning is essential for businesses that want to remain competitive, agile, and adaptable in a rapidly changing business environment.
It helps them optimize their workforce, reduce costs, improve employee engagement, and align their workforce with their business strategy.
Steps to implement Strategic Workforce Planning
1. Define the Business Strategy
In order to define the organization’s business strategy, one has to identify the organization’s mission and values.
The mission statement defines the organization’s purpose, while the values statement outlines the guiding principles that inform the organization’s decisions and actions.
Thereafter, it is good to conduct a SWOT analysis, in which the analysis can help to identify the organization’s strengths, weaknesses, opportunities, and threats.
This analysis provides insights into the internal and external factors that can impact the organization’s ability to achieve its goals.
Next, it is crucial to identify the business goals and objectives.
Based on the insights gained from the SWOT analysis, the company can derive the organization’s goals and objectives.
These goals and objectives should be specific, measurable, achievable, relevant, and time-bound (“SMART”).
Once the goals and objectives have been identified, the next step is to determine the workforce implications of the business strategy.
This involves identifying the skills, knowledge, and experience required to achieve the goals and objectives, as well as any potential skill gaps or shortages.
Based on the workforce implications of the business strategy, the next step is to develop a workforce strategy.
This strategy should outline the strategies and actions needed to ensure that the organization has the right workforce with the right skills in the right place at the right time.
With that, we can start to analyze the current workforce.
2. Analyze the Current Workforce
To analyze the current workforce, we need to first collect data. Data is crucial for us to quantitatively evaluate on the strengths and weaknesses of the current workforce.
The first step is to collect data on the current workforce.
This data may include information on employee demographics, skills, experience, performance, and compensation.
Collecting data on the current workforce involves several methods.
- HRIS (“Human Resources Information System”): HRIS is a software system that manages employee data such as personal information, job titles, compensation, and performance. HRIS is an efficient way to collect and analyze workforce data. Some examples of HRIS are BambooHR, Workday, and others that we have written about them before in this article: Top 11 HRIS Apps or HR Software.
- Employee surveys are a valuable source of information for collecting data on employee attitudes, job satisfaction, and engagement. These surveys can be conducted anonymously to encourage honest and open feedback.
- Managers can provide insights into the strengths and weaknesses of individual employees and the team as a whole. Interviews can be conducted individually or in focus groups.
- Employee assessments can help to identify individual strengths, weaknesses, and areas for improvement. These assessments can be conducted by managers, third-party providers, or self-assessments completed by employees.
- Performance reviews are a formal evaluation of employee performance. These reviews can provide insights into the skills, knowledge, and experience of individual employees and identify any areas for improvement.
- Exit interviews can provide insights into why employees leave the organization, including issues related to job satisfaction, work-life balance, and compensation.
If time and resources are tight, companies can work with the 9cv9 HR team to implement strong data collection processes for better Strategic Workforce Planning.
In addition to collecting data, companies can also conduct a skills inventory.
A skills inventory helps to identify the skills and knowledge of the current workforce. This can be done through employee self-assessments, manager assessments, or assessments conducted by a third party.
Then organizations can identify skill gaps.
Based on the skills inventory, the next step is to identify any skill gaps or shortages within the current workforce.
This involves comparing the current skills and knowledge of the workforce to the skills and knowledge required to achieve the organization’s goals and objectives.
How about assessing employee engagement?
Employee engagement is a key factor in workforce planning.
Assessing employee engagement can provide insights into how satisfied and committed employees are to their work and the organization.
Turnover and retention rates provide insights into the stability of the current workforce.
High turnover rates can indicate issues with employee engagement, job satisfaction, or compensation.
Workforce costs, such as salaries, benefits, and training expenses, can have a significant impact on the organization’s bottom line.
Reviewing workforce costs can provide insights into where cost savings may be possible.
All in all, to implement Strategic Workforce Planning, the organization has to first analyze its current workforce and identify its current strengths and weaknesses before it can identify future workforce needs.
3. Identify Future Workforce Needs
Identifying future workforce needs involves several steps:
- Identify future business goals and objectives: The first step is to identify the organization’s future business goals and objectives. This can be done through a strategic planning process that involves analyzing market trends, customer needs, and competitive forces.
- Determine the workforce implications of future goals and objectives: Once the future business goals and objectives have been identified, the next step is to determine the workforce implications of these goals and objectives. This involves identifying the skills, knowledge, and experience required to achieve the goals and objectives and projecting the workforce needs accordingly.
- Conduct a gap analysis: Based on the workforce implications of the future goals and objectives, the next step is to conduct a gap analysis. This involves comparing the current workforce to the projected workforce needs and identifying any skill gaps or shortages.
- Develop a talent pipeline: Based on the gap analysis, the next step is to develop a talent pipeline. This involves identifying the strategies and actions needed to ensure that the organization has the right workforce with the right skills in the right place at the right time. This may include recruitment, training, and development programs.
- Monitor and adjust the workforce plan: Workforce planning is an ongoing process. It is important to monitor the workforce plan and adjust it as needed based on changes in the business environment, workforce trends, or other factors.
By following these steps, organizations can identify their future workforce needs and develop a workforce plan to ensure that they have the right workforce with the right skills to achieve their goals and objectives.
4. Develop a Workforce Plan
Based on the analysis of the current workforce and the forecast of future workforce needs, the next step is to develop a workforce plan.
This plan should outline the strategies and actions needed to ensure that the organization has the right workforce with the right skills in the right place at the right time.
Developing a workforce plan involves several steps:
- Define the workforce plan objectives: The first step is to define the objectives of the workforce plan. These objectives should align with the organization’s overall business strategy and goals.
- Analyze the current workforce: The next step is to analyze the current workforce using the methods we discussed earlier. This involves collecting and analyzing data on employee demographics, skills, performance, and compensation.
- Identify future workforce needs: Based on the analysis of the current workforce, the next step is to identify future workforce needs. This involves projecting the workforce needs based on the organization’s future goals and objectives and identifying any skill gaps or shortages.
- Develop strategies to address skill gaps: Based on the identification of skill gaps or shortages, the next step is to develop strategies to address these gaps. This may involve recruitment, training, or development programs.
- Develop an action plan: Based on the strategies developed in step four, the next step is to develop an action plan. This plan should outline the specific actions needed to achieve the workforce plan objectives.
- Implement the workforce plan: Once the action plan is developed, the next step is to implement the plan. This may involve communicating the plan to employees, training employees, and making any necessary organizational changes.
- Monitor and adjust the workforce plan: Workforce planning is an ongoing process. It is important to monitor the workforce plan and adjust it as needed based on changes in the business environment, workforce trends, or other factors.
By following these steps, organizations can develop a workforce plan that aligns with their business strategy and ensures that they have the right workforce with the right skills to achieve their goals and objectives.
What good is developing a workforce plan without executing it?
In the next section, we will pour over details on how to implement the workforce plan.
5. Implement the Workforce Plan
Implementing a workforce plan involves several steps:
- Communicate the workforce plan: The first step is to communicate the workforce plan to employees and stakeholders. This includes explaining the objectives of the plan, the strategies that will be used to achieve these objectives, and the expected outcomes.
- Develop an implementation plan: Once the workforce plan is communicated, the next step is to develop an implementation plan. This plan should outline the specific actions that will be taken to achieve the objectives of the workforce plan.
- Allocate resources: Implementing a workforce plan may require additional resources, such as funding for recruitment or training programs. It is important to allocate these resources in a way that supports the implementation of the workforce plan.
- Train employees: If the workforce plan involves developing new skills or knowledge, it is important to provide training to employees. This may involve internal training programs, external training providers, or on-the-job training.
- Monitor progress: It is important to monitor the progress of the workforce plan to ensure that it is achieving the desired outcomes. This may involve tracking key performance indicators, such as employee turnover or productivity.
- Adjust the workforce plan: Workforce planning is an ongoing process, and it is important to adjust the plan as needed based on changes in the business environment or other factors. This may involve revising the strategies or actions outlined in the implementation plan.
By following these steps, organizations can effectively implement a workforce plan that aligns with their business strategy and ensures that they have the right workforce with the right skills to achieve their goals and objectives.
6. Monitor and Evaluate the Workforce Plan
Monitoring and evaluating the workforce plan is an essential step in ensuring its success.
Here are some steps to effectively monitor and evaluate a workforce plan:
- Define key performance indicators (KPIs): The first step is to define KPIs that will measure the success of the workforce plan. These KPIs should align with the objectives of the plan and be specific, measurable, achievable, relevant, and time-bound (SMART).
- Collect data: Once KPIs have been defined, it is important to collect relevant data to track progress toward these indicators. This may involve collecting data on employee performance, turnover, productivity, or other relevant metrics.
- Analyze data: After data has been collected, it is important to analyze it to identify trends, areas for improvement, or successes. This analysis should be used to inform decision-making around the workforce plan.
- Review the workforce plan: It is important to review the workforce plan periodically to ensure that it is still relevant and aligned with the organization’s goals and objectives. This review may involve revising the plan based on changes in the business environment or other factors.
- Adjust the workforce plan: Based on the analysis of data and review of the workforce plan, adjustments may need to be made. This may involve revising the strategies or actions outlined in the plan, or adjusting resource allocation.
- Communicate progress: Communicating progress towards the KPIs and the overall workforce plan is important to ensure buy-in from stakeholders and maintain momentum toward achieving the plan’s objectives.
By effectively monitoring and evaluating the workforce plan, organizations can ensure that they are achieving their goals and objectives and have the right workforce with the right skills to succeed in the long term.
Conclusion
In conclusion, strategic workforce planning is a critical process for businesses seeking to align their workforce with their overall strategy and achieve long-term success.
By defining business strategy, analyzing the current workforce, identifying future workforce needs, developing a workforce plan, implementing the plan, and monitoring and evaluating progress, organizations can ensure that they have the right workforce with the right skills to meet their business objectives.
Effective workforce planning can help organizations address challenges such as employee turnover, skill shortages, and changing business environments.
It can also help them identify opportunities to leverage their workforce to gain a competitive advantage and achieve long-term success.
As the business landscape continues to evolve rapidly, strategic workforce planning will become increasingly important for organizations seeking to adapt and thrive.
By investing in this process and committing to ongoing workforce development, businesses can position themselves for success and achieve their goals and objectives in the years to come.
If you find this article useful, why not share it among your recruitment and talent acquisition counterparts, and also leave a nice comment below?
We at 9cv9 Research Team strive to bring the latest and most meaningful data, guide, and statistics to your doorstep.
