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Workforce Planning: What It Is And How To Do It

Employees are the foundation upon which every successful company is built. 

Having the right talent, in the right place, at the right time is fundamental to organizational success.

But, as far as I'm aware, we can't simply clone new workers when demand arises. They have to be sourced either internally or from the market.

Workforce planning is practiced by many companies to align supply and demand and ensure workforce needs are met. In this article, I'll cover:

  1. What Is Workforce Planning
  2. Benefits Of Workforce Planning
  3. Examples Of Workforce Planning Documents
  4. Workforce Planning Process

Let's dive in.

What is workforce planning?

Workforce planning is the process of analyzing and strategizing for an organization's current and future workforce needs based on its goals and vision for the future.

It involves taking a strategic, holistic approach to maintaining your workforce so you aren’t blindsided by ongoing or unexpected changes. 

In many cases, you’ll need to conduct an analysis of how substantial your workforce must be to meet your organization’s goals. This includes identifying the quantity of employees needed as well as the knowledge, skills, and experience they should possess.

What Is the Goal Of Workforce Planning?

The goal of workforce planning is to build a company with stable staffing levels across every department. Another goal is hiring and retaining people who possess the skills to achieve successful results and a higher return on investment (ROI). This way, companies avoid understaffing, overstaffing, and scrambling when an employee unexpectedly quits or is fired.

With proper workforce planning, human resources and managers can recognize early warning signs concerning staffing issues and implement pre-existing action plans to address issues before they create a disruption.

Who is responsible for workforce planning?

Human resources is primarily responsible for designing and implementing a workforce planning strategy but they aren’t the only ones involved. 

Other essential players include:

  • Executive leadership
  • Finance
  • Line and functional managers

At its most basic, workforce planning includes hiring new employees and making sure staffing levels are met, but it also makes it easier to identify training needs and implement employee development initiatives. The right system reveals skill gaps in a company’s current workforce and increases both productivity and employee satisfaction.

Top benefits of workforce planning

According to Jeremy Eskenazi, Managing Principal of Riviera Advisors, a Talent Acquisition optimization consulting and training firm, based in Long Beach, California, USA:

Workforce planning is not just about hiring new people; it's [also] about the gaps between what you currently have and what you need." 

He goes on to explain:

“Proper workforce planning allows for effective planning in advance for your recruiting needs. If you know what the future may look like in terms of your talent needs, you can invest in the recruiting of that talent in advance before you have an actual vacancy to build a pipeline of potential candidates. This allows for a much faster time-to-hire, which is an added benefit of the process of workforce planning.”

By identifying all gaps and required workers, your company can stay a step ahead of your competitors and quickly address gaps.

Designing and implementing a strategic workforce plan provides your business with many benefits. Some of the most important include:

Addressing gaps in your current workforce

Analyzing the skills of your current employees helps you determine gaps that need to be filled, through either hiring or training and development. You know exactly what you need today and in the future to help your business achieve its goals and objectives.

Stay up-to-date on all things HR & leadership.

Improving KPIs

Success in business hinges on developing and improving key performance indicators (KPIs). The data that comes from your strategic workforce plan helps move your business forward and ensures that you are always improving on KPIs, whether it’s a lower turnover rate or lower cost per hire.

Preparing for the unanticipated

A successful strategic plan looks at your current business needs and your future requirements so your company can avoid potential and unexpected problems, saving time and money in the long run. This includes unexpected absences and resignations – the average time to fill an open position is 42 days. Workforce planning can help minimize this time and help you end up with a better outcome, like an employee with the right skills who remains employed in the long term.

List Of Strategic Workforce Planning Documents

Several documents can support your company’s workforce planning, including:

Onboarding Plan

Onboarding is training, but also so much more. It’s an opportunity to make a great first impression and has been shown to help employee retention. A great onboarding document is not just helpful for new employees but it’s also essential for the company as a whole.

HR and leadership expert Tim Reitsma recommends the following essential items that a manager should include in an onboarding plan:

  • Desk and IT set up (systems access). Its a terrible feeling for a new employee to waste time figuring out how to set up systems
  • List of who to go to for assistance
  • Clear expectations - What does a successful 1 week, 30 days, 60 and 90 days look like
  • Organize welcome lunch, email to team, coffee… whatever fits the culture
  • Training schedule all set and scheduled

Strategic Plan

Strategic plan documents should include:

  • An executive summary that presents strategic objectives and key programs for the upcoming year.
  • An internal analysis that assesses your company's competencies, capabilities, and overall satisfaction of employees.
  • An external analysis that analyzes your company's customers, product positioning, and competition.
  • A list of strategic objectives that includes your company's GAP analysis results, key success factors, KPIs, and high-level business objectives.
  • A list of goals, measures, targets, and initiatives that allows you to develop your balanced scorecard strategy map, brand scorecard, and your program deployment schedule.
  • Organizational succession planning that lays out a system for how things will work when change occurs.

As an example, Tim explained that in one company he worked for, the GM took time out for this strategic plan training. The GM would, once a month, sit down with a group of new hires and run through the history, present, and future of the company. 

How can you do something like this? Tim suggested making a OPP—one page plan. This can help you summarize your organization’s goals and focus on the bigger picture. 

Related read: What is Strategic Planning and How to Do it Right in 5 Key Steps

Employee Development Plan

This is a planning document that allows employees to see that an organization is actively invested in them personally and not as just another employee in a group of nameless, faceless employees.

The development plan could be linked to the goals of the organization and then cascaded down. It should also be aligned with the purpose, visions, and values of the company.

It can guide employees through the process of:

  • Reflecting on goals and accomplishments
  • Identifying their development areas
  • Planning for the upcoming year
  • Summing up their goals, values, strengths, and process for the chosen time period

Related read: How To Create A Professional Development Plan With Your Team Member

Leadership Assessment

The purpose of a leadership assessment document is to allow companies to discover how their leadership practices and beliefs have an impact on how people function within their organization. It should include quantitative and qualitative data collected for leadership competencies, skills, and behaviors.

When we asked Tanya Schecter, a leadership development expert from the HTI Institute, about the types of leadership assessments they use and how they use them, she explained that they generally use two types:

  1. Leadership Circle Profile: a more formal style that’s conducted by a certified consultant. 
  2. A test based on the HTI’s proprietary assessment model that utilizes the leader’s employees and managers as an assessor to identify how the leader’s current behaviours need to be adjusted in terms of either starting, stopping, or continuing. 

She explained that she’ll look at the following areas in a leadership assessment:

  • Values: do they model the company’s core values and adjust their behavior accordingly?
  • Stay: do they take responsibility and navigate situations calmly for positive outcomes?
  • Full responsibility: do they have a high degree of awareness, take action, and provide support where needed?
  • Relationships: do they process feedback well, develop others, and create strong relationships?
  • Communication: does their communication create trust, build a shared vision, and effect change?
  • Creative and resourceful: are they transparent, curious and adaptable, with a growth mindset?
  • Impact and results: do they create alignment, get buy-in, and set and deliver measurable goals? 

After using assessments to evaluate these areas of leadership, they’ll use a Relationship Map and related tools to address the deficiencies and develop the necessary skills and abilities. This is all conducted through an iterative process.    

Ready to put these different ideas and documents into action?

Related Read: 10 Best Workforce Planning Software for Executive Teams

8 Steps for the Perfect Workforce Planning Strategy

1. Establish a Workforce Planning Team

HR professionals need a supporting cast when it comes to workforce planning. It affects all departments and levels of an organization, so having input from each department and seniority level is crucial. Consider input from executives, department heads, and other colleagues in the HR department. Plan to meet once a week or so while developing the workforce strategy and after the plan is implemented, to make sure the plan is implemented as intended.  

2. Review Your Existing Workforce Planning Activities

What are you and your organization currently doing in terms of workforce planning? What’s working? What’s not? Dig into the nitty-gritty. Document every pain point and unexpected hiccup in your workforce. Include notes on how often the problem occurs, when it usually occurs, and steps you need to take to resolve it. This way, you’ll be able to ensure all angles are covered and that your organization’s day-to-day is not interrupted by issues large or small.

Gather and review any existing internal data or statistics from your human resources information system or employee management system on your workforce, their skills, qualifications, and routines, to flesh out a picture of your current workforce.

3. Review Your Existing Business Strategies

Your workforce plan will need to align with any other business strategies that you have in place, such as growth planning, change management, succession planning, total talent management, and more. Review these strategies to get a sense of what your organization’s goals are in the short and long term. Note the employees, skills, and qualifications that achieving these goals will require. A spreadsheet is useful here – you’ll want to compare goals for each strategy to find overlaps and gaps.

4. Identify Resource Gaps

It’s not uncommon for an employee not to have one skill or another everyone has different strengths. But is your organization lacking skills or resources overall? 

Analyze the skills and resources currently within your organization, in all departments, including sales, marketing, human resources, and others. 

When I asked Jeremy Eskenazi for more insight on this, he explained:

“The way for organizations to identify talent gaps is to simply develop a standardized questionnaire of themes to ask key hiring leaders: 

  • what skills and competencies will be required of talent in the future; 
  • what do we have today, and what will we need tomorrow; 
  • who on the team has the skills we will need today, and what do we need to do to provide the team the skills in the future (training or development); 
  • are people able to be trained or developed or do they need to exit and be replaced; 
  • what does the external marketplace look like and where are these skills and talent that we will need in the future? 

These questions need to be asked consistently and then tracked and analyzed for recurring themes to gain an understanding of the gaps.”

It’s also a good idea to review the seniority levels in your organization. Find the gaps – are you lacking any major skills or senior leadership? Maybe there’s too many employees with technical skills and not enough with soft skills. Maybe your leadership is not senior enough and needs an injection of experience. Then you’ll need to decide how to address these gaps, through training or new hires. Human capital management software options like Sage People are useful here.

5. Analyze Existing Work and Activities

Think of this part like a SWOT analysis – strengths, weaknesses, opportunities, and threats. The strengths are what you are already doing right – what’s working in your workforce planning and other business strategies. Carry these forward into the new workforce plan. The weaknesses are what’s not working – you’ll need to find other solutions to the disruptions to your workforce. Opportunities are those new solutions and the items that you can improve upon. Threats are items that have the potential to cause new problems or aggravate existing ones. These can be related to office environment, flaws within the strategy, or outside threats to your organization or your employees.

Combine the threat analysis with a risk assessment. Prioritize threats by how likely they are to happen and the damage that they can cause if they do occur. Create a plan for mitigating the threats, including how to prevent them and what to do if they occur.

6. Set Goals

Set some targets for your workforce planning, so that your strategy has direction. Make sure your goals align with your other business goals. For example, if you want to reach a certain revenue target, how many employees will you need and what skills do they need so your organization can reach that revenue target? Consider goals for growth, finances, marketing, and other targets.

Some specific goals you might consider include a lower your turnover rate, a lower new hire failure rate, lower revenue costs associated with unexpected absenteeism, a lower average time to fill a vacancy or a lower cost per hire.

7. Make an Action Plan

Define the steps you’ll need to take to achieve your goals. This will depend on the goals themselves, but in general, your workforce planning team should define all job roles and responsibilities you foresee a need for throughout your organization, both in the short and long term. Don’t forget to consider recruitment, onboarding, training, and other human resources responsibilities, and how they factor into your workforce planning.

Another thing to consider is strategic resource allocation for achieving your goals. This includes workflows, flexibility with team workloads, and allocating projects to find the right balance of utilizing skills sets to their full potential and maximizing training in new skills.

8. Put It All Together

Document your workforce plan, pulling together all your insights and goals from the previous steps. The final document should follow the strategic plan outline above – an executive summary or overview, goals or objectives, an analysis of your current workforce planning activities and other relevant insights from your other existing business plans, your action plan from the previous step, and the success measurements to ensure your workforce planning is achieving what you set out to achieve.

Do You Want to Know More about Workforce Planning?

If you want to learn more about HR workforce planning and how it can help your company, we can help.

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By Tim Reitsma

Tim is the co-founder and General Manager of People Managing People, an online publication focused on building a better world of work. He is experienced with people & culture, leadership, business strategy and operations with a focus on building great teams who are excited about their craft and their organization. With over 15 years of leadership experience, Tim has always been guided by his core values: faith, family, curiosity, and fun. He is a coach, mentor, speaker, advisor, and an active volunteer in his community. Tim loves spending time outdoors with his wife and two kids as well as mountain biking in the north shore mountains.

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