HR Glossary | What is quality of hire?
Workforce planning involves figuring out how many workers your organization needs to support growth and ensure profitability.
What is workforce planning?
Workforce planning is the strategic consideration of whether current employees can meet the strategic goals of the organization and what additional talent might be needed. It’s a process of considering supply and demand, identifying gaps, and using talent acquisition to fill those gaps. This means HR leaders are required to:
Hire people who align with the company’s culture (the right people)
Utilize each employee’s individual skill sets to their highest potential (the right job)
Maintain a sufficient level of staffing in order to deliver on their business model (the right time)
To determine how to align and sustain these three objectives, HR uses some form of workforce planning. This involves both strategic and operational considerations.
Difference between strategic workforce planning and operational workforce planning
Strategic workforce planning takes a longer-term look at potential organizational needs considering how both the internal and external environments might change. We need only consider the impacts of the COVID pandemic to illustrate the uncertainty that exists when it comes to preparing for the unknown.
On the other hand, operational considerations for workforce planning tend to address near-term considerations and matches current skills, capabilities, and resources to current challenges.
The benefits of workforce planning
Effective workforce planning is based on a solid understanding of the current workforce as well as existing skills gaps and current workforce needs. This ensures that the workforce can successfully and efficiently achieve corporate strategies and objectives and minimizes talent shortages.
At the most successful organizations, the planning process is so effective—and well-communicated—that talent acquisition teams don’t need to wait for requisitions to know they need to hire. That’s because headcount targets in the workforce plan already take into account turnover assumptions like resignations and retirements, allowing recruiting teams to predict future hiring needs and budget requirements more accurately.
For instance, NCI Information Systems, a government contractor wanted to project future talent gaps driven by retirements during the life of planned projects. By analyzing their internal data they were able to develop an operating business case and pricing strategy which resulted in faster and improved planning to get ahead of hiring and redeployment needs throughout the year to support multi-year projects.
The challenges of workforce planning
Effective workforce planning requires collaboration between the key business functions of HR, Finance, and Talent Acquisition. HR needs to understand Finance’s budget forecast so they can plan accurately and work with Talent Acquisition to allocate that budget across the organization as new roles emerge or positions need to be replaced. These teams need to interact and collaborate with each other continuously to ensure alignment around current and future workforce needs.
How workforce planning works with people analytics
Continuous planning can be enabled and optimized through people analytics and a shared strategic workforce planning tool. Cloud-based, analytics-driven workforce planning tools create a more agile, collaborative, and fact-based process to create true alignment between finance and people initiatives.
5 steps of data-driven workforce planning:
Using data to drive workforce planning can help organizations cut costs and gain efficiencies. Here are five key steps for using analytics to inform workforce plans:
Start with the business and a thorough understanding of organization goals and where workforce plans can have the most bottom line impact.
Ask the right questions to gather stakeholder requirements across the organization to prevent information gaps.
Leverage analytics that span the entire employee lifecycle to support talent management and hiring.
Use scenario modeling to build contingencies.
Monitor data continuously to plan proactively and stay on top of any changes before they happen.
Effective workforce planning, based on reliable data and strategic analysis can help organizations be nimble, efficient, and effective while helping to control staffing costs and increasing ROI.
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