Strategic Workforce Planning: Your Complete Guide
Strategic workforce planning is critical in finding and retaining the right talent and skills to support an organization's short- and long-term goals. Read more to learn what it is and how to do it.
Your workforce is the backbone of your organization. But for the best results, you must look beyond the immediate hiring needs. Strategic workforce planning helps you find the right people, with the right skills, at the right time to ensure that you can seize opportunities and manage threats as they arise.
It can assist you through times of fast-paced change, recession, and more. You’ll be able to not only recruit, but also retain top talent with ease. Here’s everything you need to know about strategic workforce planning.
What is workforce planning?
Workforce planning is a process that involves analyzing and forecasting short- and long-term organizational needs, and mapping skills and talent management requirements to ensure that the company has the right people in the right places, when they’re needed.
Strategic workforce planning looks beyond the immediate needs in terms of skills and headcount. It takes into account long-term goals, the business strategy, and the evolution of the market, and tries to find those skills and capabilities you’ll need in the future. Workforce planning includes both external hiring and internal mobility to help you not only find the best talent but also retain it.
Strategic workforce planning benefits
Attracting and retaining top talent are two major benefits of strategic workforce planning. But those aren’t the only ways it can assist you.
The main benefits of strategic workforce planning include:
Finding and addressing skill gaps. Working towards your business goals requires certain skills from your employees. Strategic workforce planning helps you see what the current skills are in your company, discover what your future needs will be, and address the gaps.
Preparing for difficult-to-foresee scenarios. Strategic workforce planning looks beyond the current headcount. It takes into consideration business goals, the current market, the competition, and more. By doing that, you can create plans to address various risks and find ways to mitigate them.
Improved engagement. When people feel valued and know they have true opportunities for growth, they are more engaged and perform better. Strategic workforce planning doesn’t directly address engagement. But by having the right people in the right place and using their best skills, you can give them the opportunities they crave and help them become more productive.
Saving costs. The hiring process can be costly. And replacing an employee who has left can compound those costs even more. By knowing the skills you have in your current workforce and your future needs, you’re better equipped to make a decision about whether to backfill a role with a new hire or promote internally. You can also increase your offer acceptance rate and create a more effective onboarding process so that you can save costs long term.
Workforce planning and people analytics
Strategic workforce planning looks at everything from the organization's long-term goals to your current workforce, future skill gaps, and market conditions in an effort to identify those skills and competencies you’ll need.
People analytics transforms people data regarding the current workforce into insights on things like performance, productivity, engagement, and more.
By combining strategic workforce planning with people analytics, businesses can gain valuable insights into their workforce, identify talent gaps and opportunities, and develop talent strategies that are aligned with business goals.
5 steps for successful strategic workforce planning
Strategic workforce planning requires careful analysis of data to gain insights and make the best decisions for your business. Exactly how the plan will look could differ from business to business.
Factors like the size of your organization, the industry, and even your goals will all come into play. Here are a few guidelines to help you get started on your workforce planning journey.
1. Consider the long-term goals of the organization
Long-term goals are the backbone of strategic workforce planning. Look at what those goals are and see if you can slowly start identifying the skills you’ll need to reach them.
You might discover your goals are too generic and don’t help you take action. Be prepared to refine them and make them SMART—specific, measurable, attainable, relevant, and time-sensitive.
Each goal will ideally focus on one specific area in your business. Be sure you can measure the progress. There should be at least one to two metrics you can follow to see how close you are to reaching those goals.
Being ambitious is great, but you have to be realistic as well. If you set unattainable goals, you’ll constantly live with the feeling that you’re failing. Plus, it could drive your employees to dissatisfaction and even burnout.
Of course, your goals need to be in tune with the overall business model. Otherwise, they won’t help you make much progress. Finally, set a deadline for your goals. This will help you and your employees stay on track and have a clear timeline.
2. Analyze your current workforce
After you set your SMART goals, it’s time to look at your current workforce. You need to know the attributes of your current workforce before you can figure out what you’ll need in the future.
Look for what is working—and what isn’t. Are your employees helping the company work towards its goals? Is there something that’s not going well enough or some goals that aren’t being addressed? What is something you need to change or improve to address these issues?
Assess the current skills your employees have. Don’t look only at the skills they need for their current job. Consider the possibility of internal mobility, reskilling, a promotion, and moving to different departments.
Of course, quantity also needs to come into play. Do you currently have the headcount to reach all your goals? Is one department under-staffed or overstaffed?
If you don’t know where to start with this step, people analytics can help. Don’t be afraid to also use internal surveys, even anonymous ones, to get a good idea of what people are thinking.
3. Find future skills gaps
Your analysis of the current workforce should give you an idea of the current skill gaps. Looking at the goals you set earlier, you should be able to identify future skill gaps.
Conducting a skill gap analysis will provide valuable insights. For instance, you’ll need to consider if and when certain employees plan to retire. You can also consider internal promotions to fill specific skills gaps, and to keep higher performers motivated and loyal.
The vacancies these retiring employees leave behind will need filling. Instead of running around trying to find a replacement at the last minute, use skills data to help you find the right people quicker.
4. Prepare for different scenarios
Uncertainty is part of life, and you need to prepare for it. We all have an ideal plan and would love for things to go that way. But what if they don’t?
Analyze the market, the competition, and the industry's evolution. Try to anticipate roadblocks as much as possible and prepare for different scenarios.
You know where your organization is and where you want to be. What could happen on the journey between these two points? What are the risks and how can you respond to them?
5. Monitor and adapt
Once you have your plan, it’s time to put it in motion. Monitor the evolution, and see which goals are met, and which aren’t. No matter how much you plan and how many scenarios you create, the truth is, sometimes you might have unpredictable issues.
Tackle the issues that come up and adapt your plan accordingly. Don’t lose sight of the main goals, but also be flexible with them. Some might require a little more work than you initially planned for, while others might take less.
The bottom line
Strategic workforce planning helps you find the right people with the right skills at the right time. It looks at long-term goals, the business strategy, your current workforce, and possible evolutions to help you find the best talent for your needs.
With it, you can plan ahead, and identify risks and opportunities, skill gaps, and more. You can attract and retain top talent, and even boost engagement and satisfaction.
To be successful in your workforce planning, you’ll need to first analyze the current situation, set realistic goals, and prepare for as many scenarios as you can. Ultimately, the goal is to be flexible, adaptable, and respond to unforeseen situations quickly.
On the Outsmart blog, we write about workforce-related topics like what makes a good manager, how to reduce employee turnover, and reskilling employees. We also report on trending topics like ESG and EU CSRD requirements and preparing for a recession, and advise on HR best practices like how to create a strategic compensation strategy, metrics every CHRO should track, and connecting people data to business data. But if you really want to know the bread and butter of Visier, read our post about the benefits of people analytics