Good planning is the secret behind any successful business. To achieve it, you should have a clear direction and establish both your short-term and long-term goals. But how can you ensure you’re on the right track?
Implementing workforce management software can help you assess and forecast your workforce needs, and develop strategies to address them, so you’re well-prepared to tackle any future challenges.
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But what exactly is workforce planning, and why should you implement it into your business practices? This article will answer all of these questions and more. Let’s get into it!
- What Is Workforce Planning?
- Goals
- Core Steps
- Benefits
- Challenges
- Tools
- Implementation Best Practices
- Next Steps
What Is Workforce Planning?
Workforce planning is the process of aligning an organization’s human resource capabilities with its long-term goals and objectives. In a time when skills shortages are rising, it prepares businesses for current and future staffing requirements by helping assess talent gaps and forecast labor needs.
Look at it this way: to succeed in business, forward-thinking workforce planning is essential. It’s like a game of chess: you either plan your moves strategically and win, or you wing it and make reactionary moves. Clearly, the former method offers a better chance of success.
The same principle applies to business, including the Chief Human Resources Officer role.
Workforce planning also involves regular analysis of how productive the business’s employees are, both as a whole and individually. If your employees are underperforming, you may consider adding a learning management strategy and improving feedback mechanisms to increase productivity.
Workforce planning also includes succession planning, which ensures a plan is in place to quickly fill essential management roles (typically with employees who already have the most important skills).
The Role of Workforce Management Software
Workforce planning involves many moving pieces, so actively evaluating and updating your plans can be helpful in simplifying the process.
While all of that might seem like a heavy workload, it can easily be automated by implementing workforce management software with features to track and analyze data for you — making your planning easy as pie. It aids many aspects of workforce management, including scheduling, time/attendance and other administrative tasks.
But possibly its biggest benefit is how it combines talent acquisition and employee skill development. This combination streamlines your workforce planning efforts so that you can track your past and current employees’ data with your future employment needs.
Here are some ways the software can streamline your planning processes:
- You can use the software to collect and analyze data related to employee demographics, skills, performance and attendance, and use it to forecast future workforce needs, identify trends and anticipate potential skill gaps.
- The solution helps create and manage employee schedules, taking into account factors such as demand patterns, labor regulations and individual preferences. You can use this information to ensure that the right number of employees with the necessary skills are available at the right times.
- Many systems offer performance management tools that help identify high-potential employees, track skill development initiatives and support succession planning.
- The software provides compliance with labor laws, regulations and industry standards to mitigate risks associated with workforce changes.
- Third-party integrations with HRIS and payroll systems ensure uninterrupted information exchange to facilitate data-based and informed decision-making for effective planning.
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Goals
Workforce planning can accomplish a variety of things. It helps you identify where your organization would benefit from expanding teams and areas where your employees would benefit from additional training.
Here are other key goals you can accomplish with active workforce planning.
- Problem Prevention: Thoroughly assess the skills each department requires and whether the employees in those departments possess those skills. With this assessment, you’ll be able to recognize skill gaps and correct those issues in time.
- Succession Planning: Develop strategies to ensure a pipeline of qualified internal candidates for key roles and leadership positions within the organization to mitigate risks associated with talent shortages and turnover.
- Successful Leadership: Recognize current and potential open leadership positions. With that knowledge, begin assessing which employees would be successful in those newly open positions. You can also plan their training to fill the role, making for a smooth transition.
- Increase Productivity and Efficiency: Access specific details of how your plan affects the business. Include quantitative and qualitative metrics to measure progress and set your business on the path to long-term success. With a clear overview of your organization’s performance metrics, you can also set realistic goals for the future.
- Support Diversity and Inclusion: Create an all-inclusive plan to ensure that your talent pool reflects a variety of backgrounds, experiences and perspectives.
It may sound like a large workload to meet these goals. In reality, undertaking only a handful of core tasks is enough to benefit from workforce planning.
However, if you’re new to workforce planning or just incredibly busy, workforce management software can help streamline these tasks to simplify the entire process.
Core Steps
No matter at what level you’ll be assessing your business, here are the basic steps to successful workforce planning.
Consider Future Objectives and Goals
Assess your business’s performance metrics, and review your future business plans and organizational goals. Estimate your requirements to reach those goals — that might mean additional staffing or readjusting workloads.
A system that can generate data reports will show you the specific details of how your business is doing. This information helps calculate realistic goals based on past performance. A workforce management app helps you collect and analyze business data at this step.
You’ll also want to be aware of the needs that your team won’t be able to meet. For example, if you plan to implement new software, you’ll need to be sure that your employees can learn the ins and outs of the new system and then teach others how to use it.
Assess Your Team’s Strengths
The first step in workforce planning is team assessment. Evaluate your team’s strengths and how those skills contribute to your organization’s goals. Also, consider employees Evaluate your team’s strengths and how those skills contribute to your organization’s goals. Also, consider employees nearing retirement to be aware of potential open positions you’ll need to fill.
Consider conducting an external assessment to know more about the talent pool outside your organization. Knowing what talent is available, how hard it is to acquire, and its cost will be vital to planning for the future.
Identify Missing Skills
Now that you’ve assessed your team and understand what you need to meet your goals, you’ll likely notice some gaps to fill. Implementing new software can be concerning, especially if your employees don’t have prior integration experience. Identifying these gaps will ensure you do not get caught off guard in the future — planning lets you know what to expect and prepares you to address any issues.
Problem Solve
Now that you have a clear vision of your goals, how to accomplish them and what you still need to accomplish them, it’s time to address those needs.
You’ll want to consider various solutions to determine which meets your needs and fills the skill gaps in your workforce.
Since better training is a potential solution, you may use online tools like learning management systems to upskill and reskill your employees, a top strategy for 71% of organizations to address the skills gap.
However, if you require a different skill set entirely, you’ll want to consider hiring externally. Remember that external talent assessment we talked about earlier? Here’s where all that research will be useful.
Regardless of the solution you choose, plan for how to move forward. Consider scheduling additional employee training or preparing for integrating new team members or entire new departments.
Primary Benefits
Your business can benefit in many ways by creating and implementing efficient workforce planning. Some prominent ones are listed below:
Schedule the Right People
At a basic level, short-term workforce planning can ensure that you’re scheduling the right people with the right skills at the right times by identifying the scheduling gaps.
Plan for Retirements
Workforce planning helps plan for retirement. When an important team member is stepping out of their role, effective workforce planning can help make the transition smooth.
By planning ahead, you’ll be able to train a replacement and have them ready to step into the role seamlessly.
Support Diversity and Inclusion
Diversity, Equity and Inclusion (DEI), a top focus area for L&D programs in 2023, has been a driving force behind creating a more inclusive and equitable workplace for all members of the organization.
By including it in your workforce planning initiatives, you can reduce bias in hiring processes, expand outreach to underrepresented groups and create a more inclusive workplace.
Prepare for New Projects
Effective planning is an excellent tool for new projects. If you have an upcoming project that requires a new skill set, workforce planning helps determine how best to tackle this project.
Perhaps you’ll be able to divide tasks and reallocate staff, or you might find that you need to hire additional employees to do the job. Whatever the case, workforce planning will help you plan and prepare ahead of time to avoid surprises.
Forecast Business Performance
One of the big-picture benefits of workforce planning is that companies will have an accurate high-level view of how the business is performing. It means your business can avoid situations where you need to hire en masse. If you’re not meeting goals, you can quickly assess performance, see where additional training or support is needed and implement a solution.
Workforce planning offers numerous benefits to organizations across various industries. Some of the key benefits include:
Cut Costs
Effective workforce planning can lead to cost savings by avoiding overstaffing or understaffing, optimizing labor expenses and reducing the need for reactive hiring or layoffs due to unexpected talent shortages or surpluses.
Improve Employee Engagement and Retention
Disengaged employees have both a financial and cultural impact on their organizations. Only 23% of the global workforce is engaged, and replacing an employee costs organizations as much as twice their annual salary. This makes it important for companies to actively invest in their employees’ career growth and find new ways to keep them happy at their jobs.
Anticipating and addressing talent gaps proactively can significantly help enhance employee engagement. It helps you commit to your employees’ talent and career development, motivating them to continue working for your company in return for better job opportunities and recognition.
Challenges
Workforce planning sounds pretty good, doesn’t it? Recognizing your strengths and weaknesses and using that knowledge to plan for the future. So, why doesn’t everyone have a regular planning system? There are a few barriers that prevent widespread workforce planning practices.
Determining Time Frames
Many managers don’t think far enough ahead when it comes to workforce planning. Typically, they focus heavily on yearly business goals. However, workforce planning works best when it addresses long-term needs. It doesn’t always show immediate results.
However, if you implement a workforce management system to assist in your planning, you can collect, track and analyze data to get a larger picture of how your plan is or isn’t working.
Lack of Attention to Detail
A major part of workforce planning is distinguishing various jobs from each other. The problem here lies in determining how specific this distinguishment needs to be.
Managers can distinguish between jobs based on various factors, as broadly as by department or as narrowly as by individual jobs. Deciding whether these distinctions are broad or narrow can hold managers back from effective planning.
The best practice for distinguishing job types is to focus on high-level job categories and narrow distinctions from there, if necessary.
Insufficient Data Accession
Traditional forecasting methods are insufficient for providing useful data for workforce planning.
Forecasting tools can’t successfully predict which departments will likely experience high turnover, much less which individuals are at high risk. Because of this incapability, planning long-term for which positions must be filled and at what level becomes extremely difficult.
The best option for managers is to implement advanced predictive analytic technology to provide detailed data about employee risk and demand.
Tools
Workforce planning is a lot of work. Fortunately, you don’t have to do it all alone — many tools are at your disposal.
While WFM software is one of the most effective ways you can build a future-proof strategy for your workforce, here are some more tools that can help you put together a solid plan:
Nine-Box Grid
The Nine-box Grid is a popular talent management tool used for assessing and visually plotting employees based on their performance and potential. It’s a 3×3 matrix that places employees into one of nine boxes based on their performance and potential for future success within the organization. The vertical axis usually represents performance, while the horizontal axis represents potential.
This tool helps organizations identify high-potential employees, succession planning and talent development strategies.
HR Dashboard
An HR Dashboard is a visual representation of key HR metrics and workforce data. It provides a snapshot of critical workforce indicators such as employee turnover, recruitment metrics, training and development initiatives, DE&I statistics and other relevant HR KPIs.
HR professionals and leaders can monitor workforce trends, identify areas for improvement and make data-driven decisions to support strategic workforce planning and management.
Compensation and Benefits Analysis
It involves evaluating and comparing the total rewards offered to employees within an organization against industry benchmarks and competitors. The analysis provides insights into the competitiveness of an organization’s compensation packages, including base salary, bonuses and incentives, and benefits such as healthcare and retirement plans.
This helps organizations ensure that their compensation and benefits strategies are aligned with industry standards, and support their ability to attract, retain and motivate top talent.
Strategic Workforce Planning Map
It’s a visual representation of an organization’s current and future workforce needs aligned with its strategic objectives. The map may include elements such as projected staff demographics, skill requirements, talent pipelines and potential risks related to workforce availability.
It helps organizations assess their current workforce capabilities, identify skill gaps and plan for future talent requirements.
Implementation Best Practices
Best practices for workforce planning are essential for organizations to effectively manage their human capital and align their workforce with strategic business objectives. Here are some of the key best practices for workforce planning:
- Base decisions on reliable and comprehensive workforce data, including historical trends, current workforce demographics, performance metrics and future business projections.
- Continuously monitor the effectiveness of workforce planning initiatives and make adjustments as needed based on evolving business needs, market dynamics and internal feedback.
- Foster collaboration between HR professionals and business leaders to ensure that decisions are informed by the needs and strategies of each department or functional area.
- Communicate the workforce plan and its implications to employees, fostering transparency and understanding of the organization’s talent strategies and objectives.
- Build flexibility into workforce plans to adapt to changing market conditions, technological advancements and internal restructuring, ensuring that employees can respond to unforeseen challenges.
Next Steps
While successful workforce planning can seem like a daunting task, many software options can help you streamline the process with the help of easy-to-use automation tools and interactive features.
Check out our free WFM software requirements template to determine your requirements from the system and ensure its suitability in helping with the important planning tasks you’ll need to complete.
So, have you tried any workforce planning strategies? How did they work for your organization? Let us know in the comments!