Strategic Workforce Planning: Steps and Process

Last updated on Jul 11,2023 965 Views


To maintain a successful business, it is essential to have a strategic workforce plan in place. This plan will help ensure that you have the right employees in the correct positions. It is the tactical procedure of aligning an organisation’s workforce with its business goals. The workforce planning process encompasses forecasting future workforce needs and ensuring that the right people are assigned to the ideal job profile to bring results.

A key component of workforce planning is succession planning, which ensures a pipeline of talent ready to step into leadership roles as needed. It also includes workforce development activities time. Many steps are involved in it, which can be complex. This blog post will outline the steps and processes involved in strategic workforce planning, such as training and coaching that aim to improve employees’ skills and help them reach their full potential.

An effective workforce plan takes into account both the current and future workforce needs of an organisation. To develop a workforce plan, organisations first need to conduct a workforce assessment to identify gaps between their workforce and the workforce they will need in the future. Once gaps have been identified, organisations can develop strategies to address them.

There are many different approaches to workforce planning, but all effective plans share some common steps:

  • Assessing current and future workforce needs
  • Identifying gaps
  • Developing strategies to address gaps
  • Implementing the workforce plan
  • Evaluating the workforce plan

Organisations should review and update their workforce plans regularly to ensure that they continue to meet the ever-changing needs of the business.

What is Strategic Workforce Planning? What’s The Difference?

Strategic workforce planning is a comprehensive process that companies use to identify their workforce needs and align their workforce plans with their business goals. It aims to ensure that an organisation has the best people doing the right things.

The difference between workforce planning and strategic workforce planning is that workforce planning focuses on the present and near-term future, while strategic workforce planning takes a longer-term view. Workforce planning looks at an organisation’s current workforce and projects what will be needed to meet future demand. On the other hand, strategic workforce planning starts with an assessment of the company’s long-term goals and identifies the workforce needed to achieve those goals.

What Are The Goals of Strategic Workforce Planning?

The major goal of workforce planning is to ensure that an organisation has the right number and mix of people, with the right skills and knowledge, doing tasks suited and which will best enable the organisation to meet its business objectives.

To achieve this goal, it must address both the “supply” and the “demand” sides of workforce requirements. The supply side looks at the workforce currently available to the organisation, both internally and externally. The demand side looks at the workforce required to meet the organisation’s business objectives.

The purpose of it is to check the workforce on the supply side is matched as closely as possible to the workforce on the demand side. This match is not always possible, but it is the goal that workforce planners strive to achieve.

In a nutshell, the goals of strategic workforce planning:

  • To ensure that the workforce on the supply side is matched as closely as possible to the workforce on the demand side.
  • To minimise workforce shortages and surpluses.
  • To identify and develop workforce plans to meet future workforce needs.

Also Read: Evolution Of Human Resource Management: Past and Future

How Does Workforce Planning Influences HR Processes?

Workforce planning is a systematic process used by organisations to align their workforce with their strategic goals. The workforce planning process involves identifying workforce requirements, analysing workforce data, and developing plans to address gaps.

The workforce planning process can influence HR processes in several ways. For example, it can help identify workforce needs and trends, which can then inform HR strategy. It can also help to identify skills shortages and gaps in the workforce, which can be addressed through training and development initiatives.

It makes sure the organisation has the right mix of skills and competencies to meet its strategic goals. By aligning workforce plans with organisational strategy, organisations can ensure that their workforce can support and drive business success.

How does workforce planning influences HR Processes?

Benefits of Workforce Planning

There are many benefits to workforce planning. By planning for your workforce needs, you can avoid the costly mistakes that can come from hiring too many or too few employees.

Identifying Opportunities For Growth

One of the benefits of workforce planning is that it can help you identify opportunities for growth within your company. By closely examining the workforce, you can determine where you may need to add employees to keep up with demand.

Improving Employee Retention

Another benefit of workforce planning is that it can help improve employee retention. By understanding the workforce’s needs, you can create a work environment that will likely keep your employees happy and engaged. Reducing the turnover can save your company money in the long run.

Find Gaps in the Workforce

Workforce planning can also help you find gaps in your workforce. By looking at your workforce, you can identify areas where you may lack the skills or experience needed to meet your business goals. This information is ideal for making decisions about training or hiring new employees.

Efficient Planning For Future

Workforce planning can also help you plan more efficiently for the future. You can make better decisions about where to allocate your resources and how to grow your business. It will help save time and money in the long run.

Improved Flexibility

By understanding your workforce needs, you can make better decisions on the right way to utilise your resources. It can easily improve your workforce’s flexibility. For example, you can avoid overstaffing in slow periods and can quickly ramp up production when demand is high.

Also Read: Role Of Human Resource Management in an Organization

Steps of Workforce Planning: Explained In Detail

It is a systematic process for identifying the workforce requirements of an organisation in alignment with its business goals. The workforce planning process typically consists of four steps:

  • Setting Strategic Goals And Direction
  • Analysing the Existing Workforce
  • Developing an Action Plan
  • Implementing Workforce Plan
  • Monitoring & Evaluating Results

Let’s discuss the steps in detail.

Setting Strategic Goals And Direction

The first step of workforce planning is to develop a clear understanding of the organisation’s strategic goals and objectives. This will guide the workforce planning process and ensure that the workforce plan is aligned with the organisation’s overall business strategy.

It is the most crucial step that ensures workforce planning is successful. The organisation’s strategic goals will serve as a guide for it and help to ensure that the workforce plan is aligned with the organisation’s overall business strategy.

These decisions will impact the workforce planning process and the types of workforce requirements that need to be addressed. You must ask these questions before setting the strategic goals and direction:

  • What are the organisation’s goals and objectives?
  • What are the workforce requirements to achieve these goals?
  • How will the workforce be used to achieve these goals?
  • What workforce skills and knowledge are required to achieve these goals?
  • What is the expected time frame for achieving these goals?

Analysing The Existing Workforce

The second step of workforce planning is to analyse the existing workforce. This will provide insights into workforce trends and issues such as skills shortages. It will also help to identify any potential risks to the business if there are not enough skilled people in the workforce.

Workforce analytics can be used to identify trends and issues in the workforce. This step will involve looking at data such as employee turnover rates, absenteeism, and workforce demographics. It will help in making decisions about workforce planning.

There are some strategies used to analyse the current workforce:

Internal Supply

This is a workforce analysis that looks at the skills and experience of the current workforce. It can help to identify any training or development needs. With this information, it will make sure the supply of the right talents.

Workforce Analytics

Workforce analytics can help with workforce planning by providing insights into the workforce. With workforce analytics, data is gathered about the workforce. This data can be used to identify workforce trends and issues.

Demand Planning

It helps in determining the future workforce needs of an organisation. It is done by looking at the demand for products or services and then forecasting the workforce requirements.

Gap Analysis

A gap analysis helps in identifying any workforce shortages. It is done by comparing the current workforce to the future workforce’s needs. Analysing the existing workforce will provide insights into any workforce trends and issues.

Developing an Action Plan

It is time to formulate an action plan that will take things forward. This will involve creating goals and objectives that are specific, measurable, achievable, relevant, and time-bound (SMART). After setting the SMART goals, you must create a plan of action to achieve them.

This will involve looking at your current workforce and determining what changes need to be made to meet your goals. This could include hiring new employees, training existing employees, or restructuring your workforce.

For example, let’s say one of your goals is to increase productivity by 15% within the following year. To achieve this, you may need to hire additional staff, provide training on new software or processes, or change how work is currently being done.

There are a few key things to keep in mind when developing your workforce objectives and action plan:

  • Objectives should be SMART: Specific, Measurable, Achievable, Realistic, and Time-bound.
  • Make sure to keep the key stakeholders in the loop of the workforce planning process so that they buy into the objectives and action plan.
  • Don’t forget to account for workforce risks and contingencies in your planning.

With a well-thought-out workforce objective and action plan in place, you will be on your way to achieving your workforce goals.

Implementing The Plan

Once the workforce plan is complete, it’s time to implement it. This will require buy-in and support from senior leadership and buy-in and engagement from employees. Here are a few tips for successfully implementing your workforce plan:

Implement your workforce plan

  • Communicate, communicate, communicate: Employees need to understand the workforce plan and how it will impact them.
  • Be flexible: The workforce plan should be a living document that can be adjusted as needed.
  • Get input from employees: Asking for employee feedback will help ensure that the workforce plan is realistic and achievable.
  • Hold everyone accountable: It is not a one-time exercise; it should be an ongoing process. Employees, managers, and senior leaders should all be held accountable for workforce planning and execution.

Monitoring and Evaluating Results

The workforce planning process should be monitored and evaluated regularly to ensure that it achieves its desired results. Track the progress of workforce initiatives against specific metrics. It identifies areas where the workforce planning process needs to be improved.

Another way to monitor and evaluate the workforce planning process is to review the workforce plan itself periodically. Monitoring and assessing the workforce planning process is essential to ensure that it is effective and achieves its desired results. 

By tracking progress against specific metrics and periodically reviewing the workforce plan, it is possible to identify areas where the workforce planning process can be improved. This can help ensure that the workforce is effectively managed and organisational goals are achieved.
Benefits of Workforce Planning
Benefits of Workforce Planning

Analyse Workforce Discrepancies

There are many benefits to conducting a workforce analysis, but one of the most important is that it can help you identify areas where your workforce is not meeting your needs. This information can change your recruiting, training, and development programs to align your workforce with your business goals.

Another benefit of conducting a workforce analysis is that it can help you identify potential skills shortages within your organisation. By understanding where these shortages exist, you can take steps to address them before they become a problem. It may involve developing training programs to ensure that your employees have the skills they need to be successful in their roles or working with external organisations to source new talent.

Ultimately, conducting a workforce analysis is integral to any organisation’s efforts to build a strong and effective workforce. By taking the time to understand where your workforce stands today and where you want it to be in the future, you can develop strategies to close any gaps and ensure that your business possesses the talent it needs to succeed.

Planning For The Future 

When it comes to workforce planning, one of the biggest benefits is the ability to plan for the future. By considering current staff levels, skillsets, and workloads, you can start to map out what your organisation will need in terms of staffing in the future. It allows you to make proactive decisions about hiring and training rather than waiting until a vacancy arises.

Workforce planning also gives you better understanding of your current staff and their potential. By assessing skills gaps and succession planning needs, you can identify areas where you may need to invest in additional training or development. This information can then create targeted development plans for individual employees.

Workforce planning aims to ensure that your organisation has the right mix of staff with the right skillsets at the right time. By taking a proactive approach to planning, you can avoid many of the pitfalls that can come with reactive decision-making.

Enhance Recruitment Process

Workforce planning is a process that can help organisations to enhance their recruitment process as a benefit. By looking at the data and trends related to their workforce, employers can more accurately identify the skills and experience needed to meet their business goals. This information can then be used to target their recruitment efforts towards those individuals who are most likely to be ideal for the organisation.

As any HR or recruiting professional knows, one of the key challenges in finding great candidates is understanding what skills and experience are required for the role. Workforce planning can provide valuable insights into this area, allowing employers to focus their recruitment efforts on those most likely to be successful in the role. In addition, by understanding the organisation’s future needs, employers can plan ahead for upcoming vacancies and ensure that they have a pipeline of qualified candidates ready to fill those roles.

In summary, workforce planning can help organizations improve their recruitment process by providing them with better data and insights into their needed skills and experience. By using this information, employers can target their recruiting efforts more effectively and ensure that they have a pool of qualified candidates ready to fill future vacancies.

Align HR Processes

Human resources processes can be aligned with workforce planning to create organisational efficiencies and benefits. Workforce planning helps to identify the optimal mix of employees needed to achieve business goals, and HR processes can be used to attract, hire, and retain those employees. By aligning HR processes with workforce planning, organisations can ensure that they have the right employees in place to achieve their goals.

Organisations that align their HR processes with workforce planning are able to:

Save time and money: By knowing exactly what type of employee is needed for each role, organizations can avoid spending time and money on recruiting and training employees who are not a good fit.

Improve retention: When employees are hired into roles that match their skills and interests, they are more likely to remain with the organisation longer. This reduces turnover costs and helps the organisation keep its best talent.

Increase engagement: Employees engaged in their work are more productive and contribute more to the organisation. Aligning HR processes with workforce planning can help employees be placed in roles where they will be engaged and motivated.

Find Talent Gaps

As your business grows, it’s essential to regularly assess your workforce to identify talent gaps. It will help you ascertain if you need to invest in training for your existing employees or hire new talent.

Workforce planning is a process that can help you identify these gaps and plan for the future of your workforce. It involves analyzing your current workforce, identifying skills gaps, and forecasting future needs. This process can help you ensure that you have the ideal mix of skills and experience on your team to meet your business goals.

Now is the time to begin if you don’t have a formal workforce planning process. Taking a proactive approach to workforce planning can avoid having too few or too many employees with the wrong skills for the job.

Implement Retention Strategy

As the workforce planning process unfolds, it will be essential to implementing a retention strategy as one of the benefits. This is especially true if your company is downsizing or otherwise reducing staff. Having a solid plan in place for keeping your best employees can help limit the damage of these reductions.

There are several ways to approach employee retention. Some companies opt for financial incentives, such as bonuses or raises. Others focus on non-monetary perks, like flexible schedules or telecommuting options. Still, others create a unique blend of both financial and non-financial incentives. The key is to look for what works best for your company and your employees.

Once you have a retention strategy in place, it is important to monitor it constantly and make adjustments as needed. The needs of your employees can change over time, so it is important to be flexible in your approach. Being proactive about employee retention can help ensure that your company remains staffed with the best talent available.

Improve KPIs

As businesses strive to improve their performance and compete in today’s global marketplace, they increasingly turn to workforce planning to achieve these objectives. When done correctly, workforce planning can help organisations optimise their human capital, improving key performance indicators (KPIs).

Organisations that adopt a comprehensive workforce planning strategy often see improvements in several areas, including:

comprehensive workforce planning strategy

Improved financial performance: One of the most important benefits of workforce planning is its impact on an organisation’s bottom line. Organisations can increase revenue and decrease costs by aligning the workforce with business goals.

Improved employee engagement and retention: A well-designed workforce plan considers employees’ needs and strives to match them with roles that fit their skill sets and career aspirations. This can lead to increased engagement and motivation, which in turn can result in reduced turnover.

Increased customer satisfaction: Customers benefit from improved service and satisfaction levels when employees are engaged and performing at their best. This can result in increased repeat business and higher profits for the company.

The Bottom Line

A strategic workforce helps organisations align their workforce with their business goals. By considering factors like current and future workforce needs, workforce availability, and workforce skills and experience, organisations can develop a plan to ensure they have the right people in place to achieve their business goals.

While workforce planning can be complex, it doesn’t have to be. By following a few simple steps and involving the right people in the process, organisations can develop a workforce plan that will help them achieve their business goals.

Taking a post-graduate course in HR management will give you a superior edge in your career. We have formulated Post Graduate Certificate in Human Resource Management which is ideal for learning the ins and outs of HR management. 

 

More Information: 

Key Objectives of Human Resource Management

What is Strategic Human Resource Management? Definition and Examples

Better employee relations can lead to a rapid business expansion: Know 11 Tips

What is Process Improvement? Why is it important?

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Strategic Workforce Planning: Steps and Process

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