A famous quote reads, “He who fails to plan is planning to fail.” True for life, true for business.

Let’s say you have the most competent workforce and all the necessary equipment for optimal productivity and a seamless cash flow. Is that all you need? The answer: No.

Workforce management has another key aspect — workforce management strategy. What is it? How does it work? How can you build a strategy suitable for your specific needs? You’ve landed in the right spot for all the answers.

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What This Article Covers:

• What Is Workforce Planning?
• Advantages
• Barriers
• Trends
• Steps
• Popular Workforce Management Strategies
• Next Steps

What Is Workforce Planning?

Workforce planning is the systematic process of building an effective workforce management strategy. In simpler terms, it identifies, analyzes and addresses the current gaps in the workforce and the projected human capital requirements.

Why is it important? Workforce planning is critical to ensuring your business has the right staff to meet future demands. What do we mean by “just the right staff”?

• Qualitative: Workforce planning helps highlight the skill set expected to cater to the business in the future.
• Quantitative: Workforce planning ensures you’re well-prepared — neither understaffed nor overstaffed.

Your business and workforce must bear the excess workload if you’re understaffed. If overstaffed, you have to go over your budget unnecessarily. The solution: Plan and build workforce strategies unique to your business and market demands.

Advantages

Let’s explore the numerous advantages that a well-crafted workforce management strategy can bring to organizations:

• Better Preparation: Effective workforce planning highlights current concerns and analyzes future risks. It helps HR and managers anticipate the workforce requirements and plan the company budget accordingly.
• Reduced Hiring Costs: Workforce management strategy offers a comprehensive analysis of your entire workforce, its productivity levels and the various factors associated with it — employee morale, engagement and revenue. This analysis helps make smarter decisions to reduce recruitment costs and smoothen daily operations.
• Improved Recruitment: Workforce planning avoids both overstaffing and understaffing. Beyond that, a deeper analysis of your current workforce’s skill set and productivity also highlights what to look for in your recruits.
• Quality Employee Experience: A well-researched workforce management strategy has ripple effects. How? By ensuring just the right amount of staffing, workforce planning reduces the chances of employee burnout, thus, keeping employee productivity and morale high and supporting a quality employee experience.
• Reduced Employee Turnover: Some workforce management tools also automate raises, bonuses and promotions. Predictive analytics also help identify top performers and those at risk of leaving before it’s too late.

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Barriers

An effective workforce management strategy seems like a win for all, but is it a cakewalk? No, every great thing comes with its own struggles, and workforce planning is no different.

Let’s look at some common barriers you might face when diving into the workforce planning process:

• Poor Data Quality: Efficient workforce planning largely depends on accurate data, analytics and forecasts. Without this information, your workforce management strategy has the risk of being unrealistic and ineffective.
• Lack of a Structured Process: Strategic workforce planning requires a proactive and well-structured approach. With it, your plan will likely stay strong soon after implementation. Even if it does seem functional for a while, it will only be able to deliver the desired long-term results.
• HR Regime: We’re not trying to stir up a controversy, but a significant barrier to effective workforce planning comes from the incapabilities of the HR administrators. With the pressures of manual paperwork due to system inadequacies, HR administrators find it tedious to have a qualitative discussion with a business-driven mindset.
• Time and Expenses: Strategic workforce planning is fruitful but requires valuable time and resources. This is a common challenge to workforce planning, especially for newer and smaller companies.

Trends

As with most business processes, workforce planning has evolved. Companies have come up with ways to improve their workforce management strategy. Here are some highlights:

• Strategic workforce planning is a collaborative effort with the business development and finance departments.
• A deeper understanding of your workforce’s skills and internal talent mobility is key to a good plan.
• An extensive external labor market data analysis goes a long way in building your workforce management strategy.
• AI-driven solutions to manage and optimize workforce scheduling.
• Focus on breaking jobs down into tasks. Look out for overlapping tasks, which activities are future-critical, and which will become obsolete.

If you found these trends intriguing, read our take on workforce trends to understand what to expect going forward.

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Building A Strategy

Building an effective workforce management strategy is a top-down process. It requires clear-cut organizational direction, well-defined jobs and responsibilities and strategic goals to plan for the future.

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Here are the five core steps to build an effective workforce management strategy that’s specific to the needs of your organization:

1. Defining Strategic Direction and Goals

For starters, sit with your organization’s HR and other main departments, and ask yourself the following key questions:

• Where do you see your business in the next five to 10 years?
• What are you looking to gain from workforce planning?
• What is the long-term vision of your company?
• What changes are your employees looking for in your current workforce plan?

This step is about setting the workforce strategy framework. The aim is to introspect and assess future expectations before getting into the plan’s specific details.

2. Current Workforce Analysis

Like the previous step, you also ask some questions at this stage. However, the focus of these questions shifts and narrows down to your present workforce. Let’s look at some of these questions:

• What is the current size of your workforce? Is it optimal to meet the expected demands of the future?
• What are the current skills of your workforce? Does the workforce need any additional training for its skill gaps?
• Are the roles and responsibilities of your current workforce aptly defined?
• How can you improve the overall performance of your workforce?
• What is your current employee turnover rate? How can it be reduced?

Consider the first two steps as the starting point for your workforce management strategy.

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3. Plan Development

In this step, we take the previous information and create an efficient workforce management plan. What does that entail?

• Assessing the cost of hiring new employees.
• Assessing the cost of training your current workforce.
• Finalizing a timeline for the recruitment and training process.

Pro Tip: Create a weekly plan to inform the stakeholders of the plan’s progress. Also, create a backup plan to prepare for unforeseen situations.

4. Implementation

Once your plan is in place, it’s time to implement it. Here’s what you should focus on to achieve the best results.

• Make sure all the employees clearly understand their updated roles and responsibilities.
• Build effective communication channels between different departments to support the plan.
• Create an efficient workflow that tracks the progress of the implementation.
• Set measurement and evaluation standards to assess the plan’s success.

Pro Tip: Understand that implementing a new workforce management strategy is a gradual process — it won’t transform your company overnight — that optimizes your company’s processes over time.

5. Monitor Results and Make Adjustments

Like everything in life, your workforce management strategy usually has room for improvement. How can you keep track of this room for improvement in your strategy? The answer: Analytics.

Post implementation, it’s essential to keep an eye out for any adjustments using analytics for plan improvement and to cater to the evolving requirements of your industry more efficiently.

Popular Workforce Management Strategies

Now that you have a comprehensive understanding of what goes into building an efficient workforce management strategy, you’re probably wondering about some popular workforce strategies that have produced results previously.

• Right Employee, Right Responsibility and Right Time: Assign the right responsibility to the right employee at the right time. How? Understand the needs, strengths and weaknesses of your employees, the requirements and goals of your business, and integrate them seamlessly.
• Predefine Standards and Metrics: What are the driving metrics for your organization? Some examples include productivity, sales or footfall. Train your employees and optimize their schedules to deliver the best value on that predefined metric.
• Smarter Forecasting: Use analytics to identify the right staffing based on historic industry trends and customer demand. An accurate forecast will help create efficient schedules in anticipation of peak demand.
• Better Scheduling: Create efficient schedules to reduce labor costs, enhance customer satisfaction and increase sales. With better schedules, you can also improve staff planning to enhance employee experience and work-life balance.

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Next Steps

Creating and implementing a suitable workforce management strategy is an uphill battle. With so many factors to consider — long-term goals, new hires, upskilling, evolving industry and many others — your best bet is planning ahead.

Some software help can also simplify workforce planning. Analytics can help with accurate forecasting. Automation streamlines workforce management processes. Reporting and dashboards can help track the plan progress in a detailed manner. The list goes on.

Our free requirements template is a good place to kickstart your software search if you’re considering a workforce management solution to get the most out of your workforce management strategy.

Which workforce management strategy has made a difference for your company? Let us know in the comments.