What is workforce planning? Unlocking Success: Mastering the Art of Workforce Planning for Optimal Business Growth
Performance Cultivation
Clean, Consume and Dominate the future by visualising your success through data.
Workforce planning is the process of analysing current employees and planning for future staffing needs by assessing talent gaps, developing employee management procedures, and establishing recruitment strategies.
Your company will always be staffed with the necessary talent, knowledge, and experience to produce positive business results if you use effective workforce planning.
Workforce planning necessitates the development of an appropriate and cost-effective strategy for retaining, recruiting, and training your workforce, as well as the continuous evaluation of employee performance.
According to a survey conducted by the American Productivity & Quality Centre (APQC), 89% of the 236 organisations surveyed integrated workforce planning into their business operations.
The workforce plan, what it will look like in the future, and how to strategize for specific goals are all unique to your company and depend on a variety of factors. Typical factors that influence workforce planning include:
Strategic workforce planning
Strategic workforce planning is a proactive approach to staffing needs that aligns HR processes with overall business goals. It directs future employee plans and decisions, ensuring that they are consistent with the company's long-term vision.
Strategic workforce planning typically occurs at the senior leadership level and focuses on long-term objectives such as:
Operational workforce planning
In contrast to strategic workforce planning, operational workforce planning focuses on the business’s immediate priorities. For example, which staff level can efficiently meet the current deadlines and objectives?
Primary workforce planning criteria
Consider the following criteria when planning your company's future workforce:
The goal of workforce planning
The primary goal of workforce planning is to develop a staffing strategy that ensures you can meet strategic objectives now and in the future.
To accomplish this, workforce planning necessitates a thorough understanding of your current workforce, employee skills, experience, load capability, and potential talent gaps.
You can get a bird's-eye view of your entire workforce and create actionable plans for the future by using performance tracking and employee evaluation.
Workforce planning enables businesses to effectively and efficiently understand and design their workforce with long-term goals in mind. It prevents problems from arising and enables management to identify problems early and devise solutions. Here are some examples:
How workforce planning affects HR processes
Recruitment and employee development
Workforce planning lays out your company's recruitment and employee development strategy.
With a clear understanding of your current workforce and future objectives, you can profile the skills, experience, and knowledge needed to meet your needs and develop hiring and training processes to match.
Companies are always competing for the same top-tier talent. With proper workforce planning, you can better identify future top employees for your company and develop talent acquisition strategies to attract them.
Furthermore, workforce planning analysis can assist businesses in developing proper training and employee development to fill talent gaps while also identifying individuals capable of excelling with the proper professional development in place.
Succession planning
This brings us to succession planning and ensuring that you maintain successful leadership throughout your organisation.
Companies can begin assessing existing employees for promotion or targeting outside hires with the right mix of skill and experience by recognising the leadership positions that are currently open or will be available soon.
Workforce planning, in conjunction with succession planning, ensures a smooth transition for critical roles in your organisation, allowing you to provide an uninterrupted, seamless service or product to your customers.
Performance management
A significant outcome of workforce planning is managing the performance of your employees to increase productivity and efficiency.
With workforce planning, you can understand and develop strategies that get the most out of your employees to increase output and get a higher return on investment from your staffing expenditure..
The benefits of workforce planning
1. Preparing for the future
With workforce planning, you have a roadmap for your future staffing requirements.
This could imply increasing the number of employees to match growth projections or pivoting to a different business model and recruiting the necessary personnel.
2. Discovering workforce gaps
Understanding your current workforce's gaps informs your future personnel strategy for recruitment, redeployment, and training.
3. Effective succession planning
You can effectively plan for staff leaving with minimal disruption by identifying and developing employees with the potential for future leadership roles.
Succession planning can also have a positive effect on employee engagement. Surveys show that:
领英推荐
4. Improved Retention strategies
A clear understanding of employee skills and where they can be most successful in the business is provided by effective workforce planning.
Instead of terminating employees, you can retain valuable employees through well-planned redeployment.
5. Flexibility
A well-defined workforce strategy, complete with recruitment and training structures, can help your company become more agile, allowing it to anticipate and respond to change more effectively.
You can cut your overall staffing costs by devising strategies to:
Labour expenses can account for up to 70% of total business expenses. Workforce planning enables you to map talent to value and ensure that you are getting the best results for the least amount of money.
The five core workforce planning steps
Implementing new workforce planning strategies successfully is a lengthy process. Businesses, on the other hand, can simplify the process by breaking down workforce planning into five core steps.
1. Deciding strategic direction and goals
Workforce planning is a top-down process that requires defined strategic goals and clear organisational direction to inform and guide future decisions.
These are critical questions to ask yourself before conducting a workforce analysis and implementing new employee management strategies.
It's also important to remember that every process in your company has an impact on another. As a result, workforce planning must be an enterprise-wide effort that includes effective communication between HR and other departments.
Your new workforce strategy must be developed collaboratively in order to achieve consensus among all stakeholders. You cannot reap the benefits of workforce planning unless there is organisational buy-in and a rationale for new strategies.
Consider this step to be the establishment of a "soft" workforce planning framework that will define the overall strategy for assessing future information rather than the specifics of the plan.
2. Analyze existing workforce
The next step is to properly assess your existing workforce.
Common strategies used in this step include:
These strategies help to answer the following questions:
What you have now serves as the foundation for future workforce plans. When you know what you have (step 2) and where you want to go (step 1), you can start developing workforce planning strategies.
A common pitfall of workforce planning is ensuring that it is based on high-quality information from both within and outside the organisation. Workforce planning that is defined by inaccurate forecasts and unattainable future goals will fail.
3. Develop your plan
This is where companies must take their overall goal, input the assessment of their existing workforce and produce a concrete plan for the future.
Businesses must plan their workforce to reflect the value and revenue it produces. A simple example of workforce planning in action could be:
A company is manufacturing two models of cars. Model A is the business’ flagship car, selling the most and bringing in the most revenue. However, model B is showing significant growth, and the income from model A is beginning to stagnate.
The car company can produce a simple revenue table based on 2021 figures and 2022’s forecasts.
Model A generates $250,000 in revenue per employee, while Model B generates $300,000 in revenue per employee.
Based on growth projections, staff working on model B will need to increase by 57 to meet increased demand. This procedure assumes that the forecasts are correct and that there are no expected changes in sales or production. Simultaneously, model A is expected to have a staff surplus in 2021 and will require an 8-person reduction.
You can develop plans to retain and redeploy staff from Model A to Model B in 2021 if you have workforce planning structures in place. This type of planning reduces disruptions and employee turnover.
Of course, this is just a forecast-based plan; it does not imply that you should immediately transfer eight employees from model A to model B and hire 49 more. Instead, the company should put redeployment, hiring and training plans in place to execute when key revenue indicators are met, and take a gradual approach that corresponds to the company's shift in focus.
4. Implement workforce planning
Successfully implementing workforce planning requires:
While the future HR plans for managing your workforce are specific to your business, they will involve some or all of the following:
Workforce planning does not transform your company overnight because there are many new processes to implement. Instead, it is a gradual process that optimises each procedure for the specific circumstances in order to bring your company closer to its long-term objectives.
5. Monitor results
It's critical to remember that workforce planning is an iterative process in which progress is tracked and measured against specific milestones and long-term objectives.
Following implementation, your workforce planning processes may need to be adjusted due to unexpected factors within your business or to meet new industry realities.