What is strategic workforce planning ?
Strategic workforce planning aims to provide a company and its leadership team with a clear view of the company's workforce needs, opportunities, and challenges over the next five, ten, and even 50 years. It is not about filling jobs for the next two years; it is about thinking long term and being able to adjust the company's workforce strategy accordingly.
Process of Strategic Workforce Planning and Why It's So Important
What is the strategic workforce planning process?
Workforce planning can be described as the process to analyze the current staff levels and anticipate future hiring requirements to ensure you are staffing properly and not creating a skills gap during the hiring process.
Strategic workforce planning is also needed to identify your employees' training needs and ensure that you align recruitment strategy with the business' strategic goals. This workforce planning process is focused on broader issues to align workforce with overall objectives and long term goals.
The planning process involves preparing for long term goals and the workforce plan includes evaluating the current workforce, anticipating future talent acquisition, estimating potential issues in hiring and developing and opting for current workforce analysis strategy.
The process to implement strategic workforce plan involved the following seven steps-
- Assess objectives- The first step in strategic workforce planning is to include the right human resources to assess the short and long term objectives and to make sure your business goals are achievable.
- Analyze workforce- The next step in the workforce planning process is to assess the quantity and quality of the current workforce.
- Identify skills gaps- The third step to is to conduct a skills gap analysis which will deliver valuable workforce data like when an employee plans to retire. This provides sufficient time to human resources to get a future plan ready.
- Anticipate future issues- The fourth step requires developing a strategic workforce strategy that anticipates future business issues and provides steps to address them.
- Action plan- The next step of a workforce plan is to create an action plan which includes strategies for recruitment and retaining talent, reshaping the organization and embracing better technologies.
- Implement the plan- Once the action plan is ready, it is time to make sure that the necessary resources are in place and roles are defined to execute the plan.
- Test the plan- The last step is regular review of the workforce planning strategy to identify progress, problems areas and required adjustments to address potential issues.
Why is strategic workforce planning important?
Workforce planning not only shapes the employee experience but also helps a business form teams that will work together for long term goals to improve relations with investors and better talent management strategies.
Workforce planning is important for companies as it helps-
- Achieve financial objectives- Strategic workforce planning requires collaboration between finance and human resources as the workforce is a major source of revenue and costs. The finance department performs people analytics to calculate workforce contribution to the business. Using the insights, human resources can hire the right people to allocate resources and create an optimal workforce.
- Improve employee experience- Effective workforce planning has the people at its core and can help your business gain agility through efforts of employees and their talents. Workforce analysis also helps determine how to have better productivity and profitability. A business also ensures that hiring plan is in line with the overall business strategy.
- Promote collaboration- Strategic workforce planning encourages participation. If the business has to recognize connections between departments and understand the effects of specific actions, it requires cross-functional insights that can be delivered through collaboration.
Goals of Strategic Workforce Planning:
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What are the basic principles of strategic workforce planning?
After looking at how important strategic workforce planning process is to a business, let us now focus in the basic principles that guide strategic workforce planning-
- The right people- Workforce planning relies on the right people in the right job to achieve the long term business goals. In the new normal, there is no limitation to implement a talent strategy as new talent can be hired without geographical limitations. Talent management should consider factors that affect staffing needs and productivity.
- Right skills- A workforce plan should have the strategy mapped to know which competencies should the employees require to meet future challenges and fill skills gaps effectively. While planning workforce hiring, it is must to identify the experience levels that will support the organization's strategic workforce competencies. A workforce plan should list out the key skills needed and the impact they will have on business strategy and model.
- Right place and time- If your business has to grow and succeed, then the strategic workforce planning should ensure that right people at placed in the right positions at the right time. There is a need for optimal allocation of human resources and establishing clear business goals to ensure hiring the right people who can meet the company objectives. The plan for optimal performance management must have right balance between talent allocation and company needs and adjusting the hiring strategy to meet business goals.
- Right cost- A workforce planning process should plan for costs that you will incur when hiring which includes money spent on job ads, hours spent on interviews and cost to hire new employee like salaries and benefits. The budget management for hiring should focus on talent acquisition strategy which will optimize hiring costs, plan for hiring related expenses and budgeting for only the talent your organization needs.
What are the benefits of strategic workforce planning?
As discussed, workforce planning process forecasts, analyses and organizes workforce supply and demand. Hence, using a workforce planning software will help a business perform this process effectively and in less time. A software solution for strategic workforce planning takes a data driven approach to staffing, budgeting and scheduling. The strategic workforce software enables a business to automate the functions required to manage your workforce. Opting for an app like ZipSchedules will help you with Workforce Management as it automate workforce functions such work rules, leave management, scheduling and attendance, overtime and reports and analytics. After discussing the use of software to optimize strategic workforce planning process, let us now look at the benefits of opting for a workforce plan to streamline business operations-
Workforce planning tools: Workforce planning tools help you analyze your current workforce capabilities and provide accurate data to identify gaps. Some common strategic workforce planning tools are-
1. Build a Highly Motivated, Engaged Workforce
A workforce plan should emphasize nurturing motivation in the current workforce so that employees work hard and stay with the business for the long term. Motivated employees are more productive and efficient and complete their work faster and with greater levels of collaboration and commitment.
Here are some tips on how you can use a workforce plan to build a highly motivated and engaged workforce-
- Set clear goals- A workforce plan must list explicitly what is expected from the employees. The workforce will be better motivated and engaged when employees are given clear goals and open communication on how their efforts will contribute to the business goals. The planning process should have clear guidelines on how to communicate performance and goals. Frequent communication about progress towards business goals is a huge step toward creating an effective performance management program.
- Talk about career development- Strategic workforce planning should coach managers to talk to employees about career development in alignment with business goals. Performance management plan focused on career development is very effective for motivating the workforce. This can have huge impact on employee experience as workers feel motivated to get to the next level in their career.
- Provide regular feedback- A workforce plan should have a schedule for provision of regular feedback to employees so that they know how the expectations from them help their career goals. Managers need to be careful about evaluating the feedback they receive and select the points most relevant to the employee and what they want to hear.
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2. Increase Productivity and Earn More Profit
A strategic workforce system ensures that an organization gets maximum profitability from the current workforce and resources. Productivity takes into account the amount of input needed to produce an output and profitability is the revenue left over after all expenses and taxes have been paid. One way to increase productivity and earn more profit is to produce more products while paying less for the resources.
Here is how a successful workforce planning can increase productivity and earn more profits-
- Monitor productivity for profit- Good strategic workforce planning should monitor productivity regularly and take measure of the daily operation efficiency. Talk about the productivity targets and how to measure them to motivate employees. Ensure that the targets are defined carefully so that increase in production doesn't affect the quality of the products.
- KPIs to measure productivity- Using key performance indicators to measure productivity is part of strategic planning. The KPIs should be aligned with business goals, measurable and allow for corrective action.
- Business comparison- A workforce plan should have a strategy for benchmarking to understand how competitors deal with the same issues. Benchmarking can be on a basic level or for more detailed insights such as sharing data with competitors you trust.
3. Establish a Culture of Collaboration and Teamwork
We have already seen how collaboration is must for implementation of successful strategic workforce planning. Though the exact process may differ based on our business goals, here are steps you can take to strengthen your collaboration capacity-
- Establish a vision- The first step of a workforce plan for collaboration is to establish a clear vision. The vision should have details about why the need for collaboration, how it will help your organization and the steps needed to develop employees' ability to collaborate.
- Find collaborative leaders- The planning process should focus in recruiting new leaders who have experience in building collaborative cultures that can help your organization realize its goals for teamwork more easily.
- Assess current workforce processes- The workforce plan should also focus on assessing the current processes used to meet targets. If there are any individual-oriented processes, replace them with opportunities for collaboration. Understanding the drawbacks can help you implement better strategies.
- Build opportunities- It is important that a strategic workforce system should have opportunities for collaboration. Let employee experience situations where they need to use teamwork. Help the team bond, practice skills and build supportive relationships by implementing activities like team building, professional development practices, recreational workplace events and more.
- Offer incentives- In the planning process for building collaboration, it is important to reward teamwork. Celebrate collaborative efforts by offering bonuses or other incentives, like time off or happy hours.
- Feedback systems- The collaboration planning process should also build feedback systems to keep track of organizational shifts. Monitor your employees' collaborations and step in if there is a potential gap. Plan feedback schedules which can help your employees communicate about and better the collaboration processes.
- Adopt technology- Use of right communication tools like messaging applications, cloud-based productivity services and more can enable employee collaboration. Use of right technological tools can improve productivity, communication and workflow.
4. Stay Organized and Streamline Processes
Effective workforce planning requires organization and streamlined daily operations. The easiest way to streamline daily process is to opt for software to help in strategic workforce planning which can help identify time wastage and find opportunities to improve workflow.
Here are some ways to help in planning strategic system to streamline and develop efficient workflow-
- Analysis- A good workforce plan will analyze the current workforce and process by listing and analyzing every process of the business operations. The goal is to identify issues in current work flow.
- Identify focus areas- The next step in the planning process is to identify opportunities to improve. Track down factors that can affect effectiveness of existing workforce process. Create a new workflow that fills the gaps and make sure that there are no loopholes.
- Process breakdown- A way to streamline the Workforce Management process is to break the workflow process into smaller, manageable tasks. Keeping the workflow process simple by breaking it into manageable steps helps achieve the outcome easily.
- Rank by importance- The next step in planning process for efficient workforce is to rank each process on its importance. This helps streamline the workflow and also achieve the best outcome for each process.
- Document everything- An important step in strategic workforce system plan is documentation. A business needs to record every step of the current workforce process that gets work done.
- Automate the work process- Opt for a software to automate the workforce planning process which can help a business streamline the workflows. The software offers advanced features and capabilities that eases the complex business process.
- Test new workflow and adjust- Don't let the new process just be a workforce plan, test it. The testing will help you evaluate how it responds to workplace. Be ready to make improvements based on testings.
- Implement workflow process- Communicate with the employees and implement the workforce plan to streamline the daily workflow. Monitor the new process and adjust and refine as needed.
5. Reduce Employee Turnover
Strategic workforce system is putting the right people in the right place at the right time. If your business has high turnover, here is how you can reduce the turnover-
- Hire right people- To reduce the current workforce turnover, you need to hire the right people who have the skills that match the open position. Hire people who fit the work culture by asking behavioral questions during interviews.
- Competitive pay- Workforce planning process is not just about hiring the right people. You have to compensate the employees well. Survey the current workforce wages in the market to see what paychecks and benefits are being offered.
- Praise- Workforce planning is about long term retention of employees. Offer encouragement and recognition when employees perform well. The goal to create a positive work environment.
- Career path- It is easier to retain current workforce if a business offers them opportunities to grow. Showing the employees a projected career path gives them a sense of direction and purpose.
- Flexible work schedules- Allowing flexi schedules lets employees adjust their time and create a work-life balance. When employees have a balance, they will be more satisfied and less distracted.