Businesses of all sizes rely on their talent base to help them work toward organizational goals and objectives. Of course, human resource (HR) professionals are often the ones business leaders turn to for assistance in recruiting, hiring, and onboarding the right talent to meet the company’s changing needs.
With this in mind, many HR professionals rely on a technique known as workforce planning. If you aspire to break into the HR field, understanding what workforce planning entails and how to use it could help you build a stronger talent base.
What Is Workforce Planning?
Workforce planning in HR is a strategy that involves carefully aligning a company’s talent/workforce with both short- and long-term organizational goals. It calls for:
- Detailed assessment of its current workforce
- Forecasting/predicting future needs
- A thorough gap analysis
- Proactive planning from HR teams
Why Workforce Planning Matters
Proper workforce planning can benefit businesses in a number of ways, affecting agility and talent management as much as it can influence long-term success and growth.
Aligns Talent Strategy With Business Goals
For starters, workforce planning can be used to ensure that a company’s overall talent strategy and recruiting/hiring are in alignment with business goals and objectives. This, in turn, may make it easier for businesses to achieve those objectives.
Identifies and Fills Skill Gaps
Workforce planning involves a detailed gap analysis, too, where the talent needs of a company are compared to the current state of the company’s workforce to identify areas of weakness. Once these gaps are found, HR teams can work toward filling them by providing teams with additional training or bringing on new employees.
Improves Budgeting and Cost Management
Another potential benefit of workforce planning is that it can reduce labor costs, resulting in enhanced budgeting for businesses over time. This is especially true when HR teams are able to leverage workforce planning to optimize and streamline a company’s talent base, thus eliminating unnecessary spending.
Reduces Risk and Improves Continuity
Workforce planning necessitates careful forecasting and modeling, which can help decision-makers anticipate potential risks and take proactive measures to mitigate them. This is also true from a succession planning standpoint; workforce planning can ease the transition when leaders and other essential employees move on from the company.
Enhances Talent Acquisition and Retention
Overall, workforce planning aims to improve talent management within an organization — ensuring not only that a company’s talent base aligns with long-term objectives but also that they have access to the right talent precisely when they need it.
Types of Workforce Planning
There are two main types of workforce planning of which HR professionals should be aware:
Strategic Workforce Planning
With strategic workforce planning, HR teams are more focused on looking to the future and building a talent management strategy that’s based on long-term goals and objectives. Using this strategy, HR teams tend to focus most about filling skill gaps and anticipating future talent acquisition needs.
Operational Workforce Planning
Operational workforce planning, on the other hand, instead emphasizes aligning talent based on immediate needs (like filling schedules and keeping daily operations running). The workforce management strategy that’s right for an organization will depend on various factors, including current staffing issues.
Workforce Planning Models
Aside from operational and strategic workforce planning, HR professionals may employ additional models to align talent with organizational objectives.
Scenario-Based Planning
With scenario-based planning, HR teams rely on theoretical scenarios and “what ifs” to prepare for potential workforce needs. Using scenario planning, it is possible to plan for any number of contingencies, allowing HR teams to work quickly and apply action plans as the need arises.
Zero-Based Workforce Planning
Another model HR professionals may use is zero-based planning, which involves the careful evaluation of a company’s staffing needs, starting with a clean slate. Under this model, every position within the company needs to be assessed and justified, which can enhance resource allocation and reduce overall talent management costs.
Competency-Based Planning
Competency-based planning is used when HR teams want to focus their talent management more on employees’ unique skills and competencies rather than their job titles alone. This method can be especially valuable in identifying skill gaps and designing training/development programs to close those gaps.
Components of a Workforce Planning Strategy
Now that we’ve established what workforce planning entails, you might wonder what it looks like in action. While no two strategies are exactly alike, the workforce planning process can typically be broken down into several key components.
Strategic Workforce Analysis
First, HR teams may sit down and focus not just on the company’s strategic goals, but how the current workforce’s performance and skills align (or don’t align) with those objectives.
Demand Forecasting
With a better grasp of where things stand, HR professionals may take the next step in predicting potential workforce needs with demand forecasting. This can be a great way to determine future workforce needs based on industry trends, market growth, and other factors.
Supply Analysis
In considering current and future workforce needs, HR teams may also conduct a supply analysis — which can help forecast the current and future availability of skilled talent, both internally and externally. Using supply analysis, professionals can be proactive about talent planning and maintaining staffing levels with business strategy in mind.
Gap Analysis
Along with a supply analysis, HR teams might conduct a gap analysis to identify discrepancies between the supply of talent in the workforce and current (or future) demand. This type of analysis can also help pinpoint gaps in skills within organizations and, in turn, enable HR teams to better focus their workforce plans and training plans accordingly.
Action Planning
With a clearer perspective on the current state of the workforce versus long-term goals and needs, HR professionals may be better equipped to create an action plan for moving forward. This plan will ideally include clear, actionable steps that HR teams and other decision-makers can take to address skill/supply gaps and more aptly align talent management with organizational objectives.
Best Practices for Effective Workforce Planning
Effective workforce planning involves plenty of practice as well as a bit of trial and error. However, HR professionals can keep in mind certain best practices as they develop their workforce planning skills.
Involve Leadership and Cross-Functional Stakeholders
Although workforce planning is largely an HR task, input from stakeholders, leadership, and team members can be invaluable. With this said, HR professionals are encouraged to take a collaborative approach, inviting feedback and input from cross-functional stakeholders at all stages of the process.
Use Workforce Data and Analytics
With access to more workforce data than ever, HR teams are encouraged to leverage data by utilizing specialized analytics tools in their workforce planning strategies. Specifically, data analytics can be used to identify supply gaps and skill gaps as well as monitor the success of workforce action plans.
Build Flexible, Adaptable Plans
As much as HR teams can forecast, model, and plan for different talent needs, the reality is that talent management can be highly unpredictable. While having an action plan in place can be helpful, plans created with flexibility built in help ensure that businesses can pivot and adapt as needed.
Integrate Planning With Broader HR Functions
Like most HR initiatives, workforce planning cannot exist in a bubble but rather should be considered in the context of other HR functions. This means that HR professionals can integrate their workforce planning strategies with other critical areas of HR, including:
- Training and development
- Performance management
- Recruiting and hiring
- Succession planning
Tools and Technology for Workforce Planning
Today, HR professionals also have a wide range of tools and technologies at their disposal to aid in workforce planning. Knowing how to use these to their advantage, HR teams can optimize their workforce planning strategies. Offered through platforms and providers like IBM, Workday, Tableau, ADP, Visier, and many more, types of tools to consider using include:
- Data analytics tools
- Artificial intelligence (AI) for candidate selection
- Workforce planning software
- Applicant tracking systems (ATS)
- Learning management systems (LMS)
Challenges in Workforce Planning
Even with the right tools and technologies to assist them, HR professionals may still run into some obstacles regarding workforce planning. This is especially the case when it comes to forecasting and predicting future needs based on current data, as data models are not always reflective of reality. In other cases, HR professionals may be limited by budgetary constraints, which may make it difficult or even impossible to align talent with organizational goals. For instance, the Society for Human Resource Management (SHRM) highlights data deficiencies, communication breakdown, and gaps in strategic integration as common pitfalls to avoid when implementing workforce planning frameworks.
Final Thoughts: Building a Future-Ready Workforce
Executed properly, workforce planning can be a highly effective strategy for keeping organizational talent in line with current and future goals. And when HR teams know how to use the best practices and methods to plan for future talent needs, it is possible to build a workforce that’s ready to take on the challenges and opportunities of tomorrow.
Learn More in an HR Management Degree Program
Workforce planning is just one of many tools that HR professionals use to ensure that an organization’s talent base aligns with long-term goals and strategies. If you’re interested in expanding your HR expertise and knowledge to include strategies like workforce planning, the Bachelor of Science in Business Administration – Human Resource Management through Johnson & Wales University Online may be right for you.
This career-focused degree program, offered entirely online for your convenience, covers foundational coursework in topics such as workforce planning and deployment, labor relations, business analytics, and more. Contact us today to learn more about this program, or take the next step by applying now!
For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].
