An Agile Strategic Workforce Planning

What is Workforce Planning?

Strategic Workforce Planning is a process to ensure that the supply of the right amount of skills and talent within an organization matches the demand generated from the business. To achieve your organization's goals, you want to recruit, develop and retain the best talent for the job. To do this well, you need insight into your current workforce, you want to know what your future needs are, and you want to keep track of the actions to be taken with associated financial consequences.

Strategic Workforce Planning is not a stand-alone process in an organization; it is connected to many other planning processes and other departments outside of HR. The CEO (the business) wants to know the impact of his workforce for developing new strategies and initiatives. HR wants to be able to align well with that need with its processes. Finance then wants to be able to measure, analyze and report on its trends, objectives and results. All have an interest in a well-run workforce planning process.

Challenges

A workforce is one of an organization's most valuable assets. Not only in cost, but more importantly in the value it adds to a company. Nevertheless, Workforce Planning is still one of the most dynamic and unpredictable planning processes in organizations. Not least because of the many variables that affect it, lack of an integrated approach and lack of proper supporting technology.

1. Good forecasting remains difficult

Many companies are struggling with their Recruitment Planning. Properly forecasting future skills needs has always been a challenge, but thanks to the effects of the pandemic, it is even more fickle and difficult to predict than before.

2. React rather than anticipate

In addition, there is often no focus on long-term workforce initiatives and one limits oneself primarily to the short term. As a result, one gets no further than reacting rather than proactively developing the workforce so that it best meets the needs of the future.

3. Silos that don't work well together

Another common challenge is the lack of coordination between different departments in the area of Workforce Planning. The familiar silos are also certainly intact in the area of Workforce Planning. Resulting in a mismatch in mutual expectations, inconsistent departmental plans and incorrect financial projections.

In 7 steps to agile strategic Workforce Planning

With the above challenges in mind, you can imagine that a well-functioning strategic Workforce Planning ensures connection between the various stakeholders from Business, Finance and HR, improving mutual cooperation and accountability. What 7 steps can you take to make this happen?

1. Determine critical capabilities

Look at your organization's long-term strategic goals and connect your strategic Workforce Planning to them. Sounds like an open door, yet very often we see that there is no good link between strategic Workforce Planning and the Business Strategy of the organization. Often because the critical capabilities (what do we really need to be successful in the future?) are insufficiently addressed.

2. Analyze the current workforce

Obviously look at things like age, type of contracts and demographic expectations. In addition, make a clear distinction between quality and quantity. How is the current workforce performing and is there room for improvement? Do you have a clear picture of the high potentials and do you offer them sufficient development? Do you know why these people perform so well and can you apply this more often? This can lead to a Development Strategy. Quantity, you might expect, is about the amount of employees needed, turnover and internal shifts.

3. Analyze the expected gap with your future workforce

Once you have analyzed your current workforce, you can also start looking to the future. For example, you can identify which people will retire based on their age and what expertise they will take with them. How do you plan to absorb this expertise? Will you further train or retrain current employees? Or will you opt for an external solution? The World Economic Forum outlines that 50% of workers will need retraining by 2025.

4. Always work on different scenarios

Many organizations were already thinking about the effects of new technological developments such as Robotization, for example, on their existing workforce. But who had included the current pandemic and the acceleration in digitalization in their scenarios? The world has changed at a faster pace and this will have an impact on various jobs. Economic consequences will also affect the job market. How nice is it if you have already incorporated such a scenario and thus know what to do in terms of recruiting, layoffs and retraining? Good anticipation may well prevent major rounds of layoffs.

5. Link your recruitment expectations to Finance

With the right technology, you as an HR department are able to actually link your recruitment expectations to Finance. This allows you to substantiate at once what it will cost to meet the business' expansion plans and what it will mean for cash flow if it actually increases or decreases.

6. Improve forecasting accuracy

Today, you can use statistical forecasting to predict staff turnover and its impact on the future workforce and ambitions. You are therefore able to initiate appropriate action at an earlier stage.

If you are also able to plan and calculate your personnel costs at a very detailed level, you can also calculate payroll, variable pay and other person-related costs much more accurately. This will significantly improve the accuracy of the forecast and you can also calculate changing impacts directly in all kinds of scenarios.

7. Implement, monitor and adjust

Once you have gone through the above steps, you are finally ready to start implementing the necessary actions. This should be a continuous process because the situation changes almost daily. As an organization, you will have to continuously adjust and adapt. You can only do that when you can continuously analyze your current process. Having a solid analysis solution is indispensable for that.

Data-driven Workforce Planning

In the area of strategic Workforce Planning, we see various tools being used. In addition to known point solutions, we are increasingly seeing platform solutions that address these challenges. This makes it easier to connect the various silos. Some come more from the Human Capital Management (HCM) angle, such as Workday, for example. Others are seen more as planning solutions, such as Anaplan and Pigment.

Strategic Workforce Planning, by deploying the right technology, changes from a labor-intensive process, with fragmented non-consistent data in different sources, to a data-driven process that connects departments and becomes a key driver for achieving strategic objectives. The process thus becomes more reliable, many times more effective and, above all, more agile. The need for this has been made clear over the past year by Covid-19.

Want to know more?

We see that you can solve many of the challenges with a planning solution like Anaplan or Pigment and that it is a powerful tool for agile Workforce Planning. Find out how you can use Anaplan or Pigment for your Workforce Planning and book a 30-minute Discovery Session with an expert. During this session there is room for answering all your questions and you can indicate which components you want to know more about. Among other things, we will show you what the challenges are in the planning process and how to ensure seamless collaboration between different business units.