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Your Ultimate Guide To Strategic Workforce Planning

Feb 15, 2023
Your Ultimate Guide To Strategic Workforce Planning
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If you run a business, you know that your workforce is a valuable resource. Planning your workforce effectively can turn your business into a well-oiled machine. Each employee will know what they need to do and when. And they can carry out their tasks confidently because they have the necessary skill sets. 

As with every aspect of business, you must take a strategic approach to plan your workforce. This is your ultimate guide to strategic workforce planning.

 

What Is Strategic Workforce Planning?

Strategic workforce planning ensures you have the staff and resources you need exactly when you need them. It helps to eliminate the pitfalls of being under or overstaffed. By planning your workforce in advance, you can avoid recruitment challenges down the line. 

Strategic workforce planning involves analyzing productivity, budget, skills, and workload. You will identify and fill any skill gaps within the business. These factors combined can help you predict your company's current and future workforce needs. 

Strategic workforce planning enables you to optimize your costs and resources. The image below illustrates the components of a successful workforce plan: 

Your Ultimate Guide To Strategic Workforce Planning

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A strategic workforce planning process can ensure you meet your business goals and continue to grow. It helps you maintain employees with the right skill sets to maximize productivity while minimizing unnecessary expenditure. 

5 Key Steps To Strategic Workforce Planning 

So how exactly does strategic workforce planning work? Here are five key steps to take for effective strategic workforce planning:

1. Define The Business Strategy

First and foremost, you need to define your business strategy. Leaders within your business should work together to hone in on the strategic objectives of the company. 

Consider taking a SMART approach to goal planning. That is:

 

Your Ultimate Guide To Strategic Workforce Planning

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Each department will have unique insight into your company’s current state of affairs. Therefore, it makes sense to request input from leaders from all departments when defining your business strategy. Include HR managers, leaders of your finance team, your tech experts, and other employees within your company that will play a key part in reaching your business goals. 

Your business strategy should be closely integrated with your strategic workforce plan and your business activities. Consider how your workforce will help you meet your long-term and short-term goals. 

Meeting strategic goals may mean hiring new employees to fill workforce gaps. Alternatively, it may be necessary to retrain existing ones. You may even wish to outsource some tasks to individuals or companies that offer particular services.

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For instance, working with a marketing agency to develop and implement your eCommerce or SaaS marketing strategy could make more sense to your business strategy than hiring your own marketing team. 

2. Analyze The Current Workforce

Your next step is to analyze your current workforce. Use workforce analytics and data to identify strengths and weaknesses within your team. 

During a survey, Gartner discovered that 67% of employees did not think their organization used data effectively for workforce planning. Therefore, learning how to harness your company’s data to optimize workforce plans could give you a significant edge over your competitors.  

Your Ultimate Guide To Strategic Workforce Planning

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Look at things such as:

  • Age demographics - you may have a number of key employees near retirement age, for example. In this case, you need to plan how to fill these gaps. Additionally, your young employees could be trained for more skillful jobs within the company. Providing employees with chances to progress could boost employee retention. This will save you money in the long run. 

  • High performers vs low performers - your low performers may either benefit from extra training, or you may need to replace them. High performers may appreciate the challenge of further training. Providing more training can help them perform even better and generate more revenue. 

  • Number of workers - ensure there are enough workers with the right critical skills in each department. For example, some of your talent may be of better use somewhere else within the company. Could any gaps be filled by assigning employees to different roles or departments? 

  • Employee turnover - Zippia claims that it costs an average of $4,700 to find and hire a new employee. And it takes 12 weeks for a new employee to become a fully productive member of the team. Therefore, retaining your best workers should be a top priority. Weigh up the cost and time benefits of letting someone go versus providing training and promoting them. 

  • Training costs - analyze the costs involved in training employees to their current skill level. Compare this with the benefits doing so has brought the company. If you have spent the same amount of money on training a low performer as you have a high performer, training the low performer may not have been a great investment. Identify anything you could have done differently or how you can avoid this in the future. 

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Your current workforce will be the foundation of your future workforce needs. It’s about weeding out aspects that are not serving your company while harnessing and propelling aspects that do. Once you have a clear idea of where you are, you can set the stage to meet future hiring needs. 

3. Forecast Future Workforce Needs

Forecasting future workforce needs will ensure you are well-prepared for all contingencies. Use your analysis of your current workforce and business goals to determine what you will need in the future. This will help to ensure future success.

You can use various systems and software to assist with workforce forecasting. Below, you will see the results of a study conducted by Call Center Helper. They found that 40% of call centers solely use Excel for their workforce forecasting. 

 

Your Ultimate Guide To Strategic Workforce Planning

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Let’s pretend that next year’s goal is to sell 20% more products than the previous year. How will your current workforce help you achieve this and meet future demand? Perhaps further training will suffice. Or, perhaps you need to bring employees with more experience and specific skills on board. If that is the case, what will happen to existing employees?

If it takes 12 weeks for new employees to fall comfortably into their new work tasks, knowing when to hire new employees will assist in avoiding lapses in productivity. Likewise, upskilling some current employees might mean you need to let others go. 

Another important consideration for future goals is how your company may advance technologically. There is a lot of fantastic software and hardware available that can make life considerably easier for the workforce. HR technology to help businesses manage onboarding processes is one example. 

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4. Develop A Plan

With all your information and business objectives in place, work with your team leaders and business leaders to develop a plan of action. Your workforce plan will differ from your business strategy in that it will be specific to your workforce. 

Your strategic workforce plan will include your goals and what resources you will use to meet them. If you don’t currently have the resources you need, determine how you will obtain them. Your plan will ensure your resources, workforce, and budget all align. 

Develop workforce strategies, such as hiring, training, outsourcing, and implementing new technologies, to meet your goals. 

The table below is a good example of a workforce planning template. It illustrates what the company needs from a new hire. It includes essential details such as budget, training requirements, and education level. 

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Let’s look at a specific example of a plan:

Pretend you are a paraquat lawyer with a specific short-term goal to obtain more clients. Once you hit a short-term target, your budget will allow you to invest in technology, such as productivity software, that will save you money over time. This technology will be a key driver toward your long-term goals. 

To reach that initial target though, you might need to train employees to learn social media marketing, for example. You will purchase appropriate training materials to teach employees how to use social media to market your business effectively. 

However, your budget will only allow you to train a few employees. Therefore, you must carefully select the best employees from your current list of high performers. 

All of these aspects combined will form part of your plan. 

Another aspect of developing your plan is preparing for unexpected situations. This could be things completely beyond your control, such as global financial difficulties. 

5. Implement And Monitor The Plan

Part of implementing your strategic workforce plan is ensuring everyone is up to date with your new arrangements. Hold a meeting where business leaders not only explain any changes to employees but also give them a chance to ask questions. 

Each department should have its own mini-plan developed from the overall plan. For example, an IT department will have different tasks than a Human Resource department. 

The image below highlights the lack of plan monitoring amongst businesses. Without monitoring, you cannot measure the success of your plan.

Image source 

Monitor your plan to identify strengths and weaknesses. When the time comes to develop a new plan, you will have key information with which you can maximize your plan’s effectiveness. 

Although a plan is important, you must also be prepared to adjust it when necessary. Monitor the overall plan and individual plans. Use data to analyze successes and see if you can improve them. 

The steps you have put in place to scale employee collaboration, for instance, may not be as effective as you thought. Therefore, your business may benefit from a different approach. In short, be flexible. 

In Closing

Strategic workforce planning requires you to be detail-oriented. It also requires you to look at each area of your business with a critical eye.  Your data will be incredibly useful for developing your workforce planning strategies.

Start by defining your business strategy and analyzing your current workforce. Then forecast your future workforce needs and create an appropriate plan. Finally, implement your plan and monitor it closely. Don’t be afraid to adjust the plan based on new data.

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Author Bio:

Jacquelyn Dameron worked at Real Media for an year before applying for a Juris Doctor, so she'll be spending another couple of years at college before qualifying as a lawyer.

She is starting out at the moment to begin contributing articles.

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