One of the key findings from the 2021 Chartered Institute of Personnel and Development (CIPD’s) Resourcing and Talent Planning Survey (published in September) shows that only 46% of organisations have a workforce planning strategy based on a robust understanding of current and future workforce needs; and 43% tend to take an ad hoc approach to recruitment. This survey had over 1000 HR professionals as respondents.
What is Workforce Planning?
Workforce planning is a process of analysing the current workforce, determining future workforce needs, identifying the gap between the workforce you will have available and your future needs, and implementing solutions so that an organisation can accomplish its mission, goals, and strategic plan.
It’s all about the rights!
It’s about getting the right number of people, with the right skills employed at the right time, at the right cost, on the right contract to deliver the organisations short -and long-term objectives.
What’s the benefits of Workforce Planning?
Workforce planning can be one of the most effective activities an organisation can do to enable business growth. It can:
- Reduce staff costs in favour of workforce deployment and flexibility
- Identify and respond to changing customer requirements
- Identify strategies for talent development
- Target inefficiencies
- Improve employee retention
- Improve productivity and quality outputs
- Improve employees work-life balance
- Make recommendations to deliver strategic value through talent.
In turn, this will inform Human Resource practices such as:
- Organisational design and development
- Succession planning
- Work-life balance initiatives such as flexible working and well-being
- Recruitment and selection
- Retention planning
- Talent Management
- Job design
- Career planning
- Learning and development focus
- Reward and recognition
Workforce Planning does not need to be complicated. It can be as simple as speaking to managers about their teams in smaller organisations or in larger organisations they may choose to have an Organisation Design (OD) department with OD specialists or outsource to OD Consultancy firms.
At Purpose HR, an AAB Group Company, we work with start-ups and SMEs who are going through exciting periods of growth, launching, developing, and expanding their products and services with the help of major investment. It is crucial their CEOs, Founders or Managing Directors have talent management as a key priority and plan and act on current and future workforce requirements. This way they will retain their staff, remain change ready to meet their business objectives, be able to respond to the external environment and enable business growth.
How to implement effective Workforce Planning
Before going through the main stages of workforce planning, we recommend organisations understand their own organisational structure and objectives now and what these will likely be in the future. It is also important to understand the external operating environment. This can be achieved by carrying out a PESTLE analysis for example to identity the Political, Economic, Social, Technological, Legal and Environmental factors that are impacting on their business. It is also important to understand that the workforce planning process is not a linear one-off process but a continuous cycle.
The four main stages of workforce planning are:
- Analyse the current and potential workforce
Identify the knowledge, skills, abilities, demographics, talent profiles, attrition rates and other factors such as employees’ views on job security, personal development, satisfaction, and intention to leave. Take each role in turn to analyse and make observations. Also consider the labour market, geographical locations, and divisions to be flexible and resilient to change.
2. Determine future workforce needs
To close the gaps, select the critical ones first and then identify and prioritise potential action plans. Action plans should be adaptive and flexible, so the workforce is agile and change ready. Organisations can have some idea of the future skills required but they will never be 100% exact.
Ask questions to determine future workforce needs such as what are the ‘right’: skills and capabilities; number of people; costs (e.g., to hire, pay and train); locations and shape of the organisation (e.g., structures, type and levels of roles and demographics)? How difficult is it to recruit these skills? How long will the recruitment process take?
To address future uncertainty, consider scenario planning and how different futures may affect the sourcing of people to needs. This helps to form contingency plans to avoid any risks to achieving future goals.
3. Identify workforce gaps against future needs
Information on the current workforce and future requirements, help to identify any gaps in skills and knowledge which need addressed. This is known as ‘Gap Analysis’. Examples of gaps are staff shortages, surpluses, or skill mismatches.
Future roles are likely to need technological and digital awareness. If recruitment and/or retention are challenging, skills will need to be developed inhouse and a pipeline built through graduate schemes for example. Another option is to outsource. Purpose HR, an AAB Group Company, can put you in contact with our AAB specialists in Finance, Payroll, Tax, or Corporate Benefits for example.
4. Actions to address shortages or skill mismatches
Lastly, workforce planning should be monitored and evaluated. Organisations should ask themselves, have we done what we said we would do? Are our actions still relevant? Workforce planning should be regularly reviewed by management and HR specialists and subject to constant feedback and review.
If you or your organisation requires help with Organisational Design or Workforce Planning contact our AAB Purpose HR team on firstname.lastname@example.org and one or our HR consultants will be delighted to advise you.