Strategic Workforce Planning 101: Framework & Process

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10 min
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Jul 3, 2024

Your organization's success depends on having the right team in place. More than 70% of companies see keeping their best people as a big challenge. This is where strategic workforce planning (SWP) comes in. It's about spotting any skills or knowledge gaps and making a plan to fill them. This ensures your team has everything they need to meet the company's goals now and in the future.

SWP isn't just about the number of people you have. It uses data to understand the people who work for you. This includes what skills they have and how well they perform. By looking at past trends and future needs, SWP helps you prepare. It gets everyone, from the HR team to top management, working together. This way, you can prevent losing key team members and keep everyone working their best.

Being ready to change is a big part of SWP. Think about Amazon's plan to teach 100,000 workers new skills. This kind of effort can make people want to stay and be ready for new jobs. A special "7 Rs" plan says you need the right team at the right time. And you need to make sure they're the right fit for the job and cost. By planning for three to five years ahead and really checking all the details, SWP makes your team stronger. It cuts costs, lowers risks, and helps you keep up in a fast-moving world.

Key Takeaways

  • Strategic workforce planning is a continual process of aligning talent with business objectives
  • Over 70% of businesses consider retention a critical issue in workforce planning
  • SWP leverages HRIS data and analytics to gain insights and forecast future needs
  • Stakeholder alignment across HR, business units, and senior management is crucial
  • Agility in SWP helps organizations adapt to changes in the business landscape and talent market
  • The "7 Rs" framework ensures the right talent is in place at the right time and cost
  • A 3-5 year planning horizon and thorough internal/external analysis are key components of effective SWP

What is strategic workforce planning?

Strategic workforce planning aligns a company's staff with its goals. It ensures that the right employees have the right skills for their jobs when needed. This method involves studying current staff, predicting needs, and filling any skill gaps. By looking ahead, companies can make sure their talent fits their future plans well, giving them an edge in their field.

This strategy focuses on the "7 Rs" framework, covering:

  • Right people
  • Right skills
  • Right shape
  • Right size
  • Right time
  • Right place
  • Right cost

Focusing on these aspects helps managers match workforce plans with targets. This approach allows businesses to spot where they need more skills, plan future hires, and set up training. This way, their team is always ready for the changing needs of business.

Workforce planning is about shaping the workforce to ensure that it is capable of delivering organizational objectives now and in the future.

Good workforce planning needs HR and business leaders working together. They use data and plans to understand their workforce today and predict tomorrow. This helps in smart talent decisions, from finding new hires to growing the skills of current employees. It's a way for organizations to keep their people strategy top-notch, no matter what market shifts come their way.

Workforce Planning Comparison

Traditional Workforce Planning

Strategic Workforce Planning

Reactive approach

Proactive approach

Focus on short-term needs

Alignment with long-term business strategy

Limited data analysis

Data-driven insights and scenario planning

Siloed decision-making

Collaboration between HR and business leaders

To sum it up, strategic workforce planning is key to make sure a company's people and plans work together well. With a forward-looking, data-informed strategy, companies ensure their teams are up to the tasks ahead. This is how they succeed in a constantly changing business world.

Benefits of strategic workforce planning

Strategic workforce planning brings lots of benefits to businesses. It helps them manage their employees better, which is their most valued asset. By creating a solid plan for their staff, companies can make sure their people are working towards the same goals. This leads to better performance and helps the business compete more effectively.

It's also key for dealing with changes, like an older workforce. This ensures the company has the skills needed to thrive in the future.

This kind of planning also cuts costs. It means companies won't have too many staff or the wrong kind of employees. This way, they spend less on hiring and keep their business running smoothly. Studies show that when workers are not engaged, they cost companies a lot of money in lost productivity. With the right planning, businesses can have the best people in the right jobs. This increases engagement and helps everyone work better.

"Strategic workforce planning is not just about predicting the future; it's about creating the future you want for your organization." - John Boudreau, Professor of Management and Organization at the University of Southern California

Understanding and managing talent is another big plus of strategic workforce planning. It helps spot where there are skill gaps. Then, companies can offer training so their staff improves. This doesn't just make employees better; it makes them want to stay with the company. Businesses can also get ready for the future job market and technology changes this way.

Strategic Workforce Planning Benefits

Strategic Workforce Planning Advantages

Impact on Organizations

Alignment with business objectives

Makes sure the workforce is ready to help with where the business is going

Increased organizational agility

Helps the business to see and adapt to changes quickly, making it more flexible

Risk mitigation

Aids in avoiding risks tied to the workforce, like not having enough staff or money

Improved diversity and inclusion

Uses data to spot diversity gaps and beat them, making the workplace varied and skill-rich

Strategic workforce planning also makes a business more flexible. By keeping an eye on skills and the age of the workforce, companies can adjust. They can make smart choices about hiring, training, and keeping their people. In today's fast-changing world, being able to adapt is key to staying ahead.

This kind of planning helps avoid many risks, from not having enough staff to breaking your budget. By tackling these issues ahead of time, companies can make sure their goals are met. They can also keep up with the law. With a competitive job market, this kind of preparation is even more important.

In the end, strategic workforce planning is about more than just numbers. It connects a company's workforce to its big goals. This leads to better performance, a stronger position in the market, and lasting success. As John Boudreau says, it's not just about foreseeing the future; it's about building the one you want.

Strategic workforce planning framework

A strategic workforce planning framework helps businesses connect their people plans with their big goals. This approach makes sure the right staff, with the right skills, are in the right spots when needed. It looks ahead for three to five years, helping firms get ready for what's next and stay flexible.

This planning framework focuses on finding, growing, and supporting talent. It uses data and future scenarios to make smart HR choices. By doing this, companies can spend better on their staff, keep them happy, and make the business run more smoothly.

Strategic workforce planning models

There are several models to help with workforce planning. They check who we have now, what's coming, and how to bridge the gaps. The HCI and OPM's models are two that many organizations find useful.

The HCI model

The HCI model guides businesses through eight steps. This process helps pick the perfect talent to push business success.

  1. Understand business strategy
  2. Analyze current workforce
  3. Forecast future needs
  4. Identify gaps
  5. Develop strategies
  6. Implement initiatives
  7. Monitor progress
  8. Refine and adapt

Following these steps, firms link their people strategy with their business aims. They make sure they have the best staff to reach their goals.

OPM's Workforce Planning Model

The OPM offers a five-step model for planning our workforce. It shows how to set a plan, look at our staff now, and keep improving our strategy.

  1. Set strategic direction
  2. Analyze workforce, identify skill gaps, and conduct workforce analysis
  3. Develop action plan
  4. Implement action plan
  5. Monitor, evaluate, and revise

This model tells us to have a clear goal, check our staff, and always be flexible. This way, our plan stays on track and keeps helping our business grow.

Workforce Planning Models

Model

Key Steps

HCI Model

1. Understand business strategy

2. Analyze current workforce

3. Forecast future needs

4. Identify gaps

5. Develop strategies

6. Implement initiatives

7. Monitor progress

8. Refine and adapt

OPM's Workforce Planning Model

1. Set strategic direction

2. Analyze workforce, identify skill gaps, and conduct workforce analysis

3. Develop action plan

4. Implement action plan

5. Monitor, evaluate, and revise

By using these models, organizations can stay one step ahead. They can make sure their workforce and their goals are always in sync. This helps them thrive even in a changing business world.

Strategic workforce planning process

The strategic workforce planning process aligns an organization's people with its goals. It helps companies look at their staff now, plan for the future, and fill any skills gaps. This ensures the right people are in the right jobs when needed.

60% of businesses need to get better at this, says the Aberdeen Group. This makes a good strategic workforce planning process essential. It involves checking who you have, who you will need, and how to get the right people in place.

1. Analyze the Current Formation of the Workforce

The first thing to do is see who you have now, skill-wise. There's a catch, though. Mercer found many HR leaders don't know all their team's skills. Not knowing can hurt how well you plan for the future.

To really see what skills your team has, you should:

  • Conduct skills assessments
  • Review job descriptions and competency frameworks
  • Analyze employee performance data
  • Identify key roles and critical positions

2. Anticipate the Future: Leverage Scenario Analysis to Plot Potential Futures

Looking ahead is the next step. Use scenario analysis to imagine what you might need. This way, you can plan to meet those future needs, often three to five years out.

When looking to the future, consider:

  • Business strategy and objectives
  • Industry trends and disruptions
  • Technological advancements
  • Demographic shifts
  • Regulatory changes

Over 25% of organizations expect automation to lead to the creation of new roles in their enterprise. - World Economic Forum

3. Analyze the Future Formation of the Workforce

After figuring out what you'll need, compare that to what you have now. This step shows where you have too much, not enough, or the wrong skills. It's about matching your team’s future with what the company will need.

Imagine a company with three product lines. They can figure out needed staff increases by looking at product line revenues. Thinking ahead like this lets orgs train up staff from fading departments to grow parts of the business.

This approach, these workforce planning steps, help companies get their teams and their plans in sync. That leads to hitting goals and doing well.

Strategic workforce planning tools

Creating a smart workforce plan needs many tools and methods. They help look at the workforce now and what it might need later. These tools let businesses use facts to make choices. They manage their human resources better. With the right software and tools, companies can plan ahead well. This means they can make sure they have the best people for their goals.

The 9 box grid is a famous method for planning who might lead next. It looks at how well people are doing now and what they could do in the future. This helps companies focus on growing and keeping their best employees. Another tool, HR dashboarding, shows workforce data clearly. It helps with quick decisions by giving up-to-date details about how well the workforce is doing.

HR dashboarding

HR dashboards keep track of key numbers about the workforce, like how many workers there are and how happy they are. They pull data from many places and show it in easy-to-read charts. This lets companies see how things are going right away. They can spot trends and find things to improve. Seeing their data clearly helps them make the best decisions to reach their goals.

Compensation & benefit analysis

Understanding pay and benefits compared to what the market offers is crucial. It helps companies keep and attract top talent. They’re able to pay well but also manage costs. Using tools like surveys and reports, they get a good look at how their pay stacks up. This way, they can adjust to be more competitive.

Scenario planning

Planning for the future can make a big difference. By imagining different possibilities, companies can be ready for anything. They make backup plans and tweak their strategies as needed. Tools that help with this can model various what-ifs. This way, they can see potential impacts clearly. They look at how things like the number of employees and costs might change.

There are also all-in-one software tools for making workforce plans. They come with many useful functions. For instance, they can forecast future needs, point out skill gaps and suggest how to optimize the workforce. These tools cut down on manual work and mistakes. This lets companies be smarter about how they invest in their people.

Strategic workforce planning best practices

Organizations can make their workforce planning successful by matching it with their main business goals. They should pay special attention to key roles and functions. Using the 80/20 Pareto principle helps. It means focusing resources where they'll make the biggest difference.

To plan for the long term, it's important to have key people from the whole company involved. They can offer important views and support on planning for future staff needs. Also, using data analysis is key. It helps in making smart choices and finding skills gaps that could appear as the company expands.

Companies should keep an eye on their plans always, adjusting as needed. Taking this approach helps in handling problems before they get too big. Following these tips helps organizations be more efficient. They can distribute work better and ensure they have the right people for the job.

FAQ

What is strategic workforce planning?

Strategic workforce planning (SWP) is about spotting gaps in the workforce. It then moves on to making a plan that covers these gaps. The goal is to have the right people with the right skills and knowledge to meet business goals. This process looks ahead while dealing with unexpected changes.

What are the benefits of implementing a strategic workforce planning model?

Using a strategic workforce planning model has several upsides. It helps deal with changes like an aging workforce and cuts down costs by smart hiring. It's good for managing talent and getting ready for the future. Plus, it makes your company more flexible and less risky, e.g., avoiding over or understaffing. It also lines up your workforce goals with the whole business's strategy.

What are the "7 Rs" of strategic workforce planning?

The "7 Rs" in strategic workforce planning sum up what's important. They are the right people, skills, shape, size, time, place, and cost. Another version shifts a bit. It becomes about fitting the right capability to needs.

What is a strategic workforce planning framework?

A framework for strategic workforce planning lays out how to plan systematically. It shows where this planning fits with the big picture of a business strategy. This framework links the activities of planning to the broader business vision.

What are some popular strategic workforce planning models?

The HCI and OPM models are quite known. The HCI model is based on eight key steps that every company can adjust to fit their needs. OPM's model is simpler with only five steps. It's a great starting point to understand workforce planning.

What are the main steps in the strategic workforce planning process?

The steps in strategic workforce planning include looking at your current workforce. Then, you predict the future by imagining different scenarios. After that, you look at what you need for the future workforce.

What tools can be used to support strategic workforce planning?

Many tools can help with strategic workforce planning. For spotting high-potential employees, there's the 9 box grid. Hr dashboarding shows workforce data clearly. There's also benefit analysis and scenario planning to consider different future situations.

What are some best practices for strategic workforce planning?

Good practices include making sure that workforce planning matches your business strategy. Focus on the critical roles that drive the most results. Make decisions with the long term in mind. Involve key people from all parts of your business. Use data for decisions. And keep adjusting your plan as things change.

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