5 Steps to Making Your Workforce Planning Strategic

HR leaders are often perceived by line managers and senior executives to deliver the most value when they are firefighting (a.k.a. dowsing “talent fires”).

Quick HR fixes, like filling a vacancy with a pricey new hire or instantly meeting demands for pay raises, may lead to near-term wins. But costly ad hoc solutions can have a negative long-term impact if they are applied to roles that end up being less valuable to the business.

Consider that more than half of business executives believe at least 20% of the roles in their organization will cease to exist by 2022 (according to the Mercer 2018 Global Talent Trends study). Organizations and roles are changing so rapidly that skills requirements are continually in flux.

Today’s pressing talent storm may subside tomorrow. Conversely, a “nice-to-have” skillset now may become a business-critical talent requirement a year in the future. But with strategic workforce planning, it is possible to plan ahead — and not just react — in this rapidly changing business environment.

Operational and strategic planning

Ask 100 people to define workforce planning, and you may get 100 different definitions. In a nutshell, though, workforce planning is the process of ensuring the organization has the right number of people with the right skills, in the right place, at the right time to deliver on business goals. I’d also argue that it’s having the capacity and discipline to think well ahead, so that you can react more quickly and effectively in the moment.

Workforce planning has two major facets: one is operational and the other is strategic.

  • Operational workforce planning looks at the short-term – typically 1-2 years out – and helps the organization map existing skills, capabilities, and resources back to more near-term requirements.
  • Strategic workforce planning addresses not only the number of people required to execute the business strategy, but looks at the skills and capabilities those individuals will need in the long-term.

It also lets leaders model different cost scenarios so they can understand what impact changes could have on the business. For example, one large multinational manufacturer used our people strategy platform to analyze its workforce by location – against dimensions of revenue generation, cost, and risk – to answer strategic questions such as: “Are we in the right regions in terms of cost and productivity of labor?”

Another one of our customers (a 50,000-employee financial services company) uses a monthly planning process to capture workforce demand for the different groups within the organization. After analyzing the Total Cost of Workforce (TCOW), planners compare scenarios for future states of the workforce and see how the cost of contractors or full-time employees would compare over time. This lets the business manage costs while adapting to meet growing customer demands.

Ultimately, strategic workforce planning is a continuous, dynamic process that helps leaders ensure talent decisions are aligned with where the business needs to go in the future. It does not replace operational planning.

Instead, it complements operational planning to help businesses make good data-driven talent decisions that balance both immediate and long-term needs.

How to go from reactive to strategic

Many leaders recognize the need for strategic workforce planning, but only have the capabilities to plan at an operational level. According to a 2010 Bersin by Deloitte analysis, more than half of organizations were at level one on the workforce planning maturity scale, which means they are focused on headcount data collection for basic forecasting.

At level three, the focus becomes more strategic, with capabilities such as skills gaps resolution and scenario development. Only 11% of organizations are at this level or above – but our recent experience has been that many are turning their attention to developing more muscle at this level.

If you want to get the ball rolling on the adoption of strategic workforce planning practices, moving up the maturity curve is no small feat. It requires buy-in from several stakeholders including finance, operations, HR, and line managers. But with a little patience and a focus on what matters most to the business, you can get there. Here are five practical tips:

#1. Get actionable — People start to get excited when you deliver actionable information. It’s really important to understand the business strategy and start there when building the adoption model. If your goal is to drive sales in a new region, for example, you may need to plan for a different talent pool. With strategic workforce planning, you can model out the cost of that investment, identify time to fill roles, and map out other crucial considerations.

#2. Build relationships– When organizations begin rolling out workforce planning, leaders often view it as just another task on their to-do list. That’s why it is critical to build relationships with leaders who are key to its success and review the benefits of the process. One of our most successful clients has had an easier, faster path to success with workforce planning through engaging a strong coalition of sponsors across HR, finance, and their central corporate planning function.

#3. Create a sense of urgency — Emphasize to leaders why an up-to-date plan is critical for each area of the organization. Facilities, for instance, needs to know how many new staff could be joining and what departments they’ll be in – and well ahead of time, so they can make the right real estate investments and other workplace preparations. Likewise, IT needs to know how many new people will need computers. Book plan review meetings in advance so that planners are motivated to finish their plans on time.

#4. Streamline the planning team — At least one person should be dedicated to workforce planning; the “Master Planner,” as we like to call it. They will need to configure the plan, do plan cleanup each month, and collaborate with contributors. At larger organizations, other employees such as HR business partners act as part-time capacity leads.

Each capacity lead can support several VP-level leaders by providing data, translating demand into people numbers, and fitting that demand to plan–it’s a natural fit for HR business partners to play this role. The capacity leads can also run regular staffing governance meetings with the leaders, facilitate planning discussions, and make sure plans–and outcomes–are progressing as intended.

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#5. Get ahead of the talent acquisition curve — At the most effective organizations, the planning process is so efficient and well-communicated that talent acquisition teams don’t need to wait for requisitions to know they need to hire. That’s because headcount targets in the workforce plan already take into account turnover assumptions like resignations and retirements, allowing recruiting teams to predict future hiring needs and budget requirements more accurately.

Planning for unpredictability

21st-century business environments are unpredictable. To have a responsive workforce, the process that supports this (workforce planning) needs to be adaptable itself. It needs to support everyday operational planning, but also has the agile capability to do rapid scenario planning in key situations and specific contexts.

The goal is not to follow the plan to the letter, but to plan continuously so you can adapt quickly when change does happen or when the probability of a specific development occurring becomes high.

With continuous, cost-driven, strategic planning practices, the focus turns towards driving sustainable high performance — and away from HR firefighting.

This article originally published on the Visier blog.

Jennifer Kelley

Jennifer leads the customer value team at Visier that helps organizations implement, use, adopt and get value from analytics and workforce planning solutions. Her team has successfully guided Fortune 1000 companies to connect their workforce strategy to the use of analytics to make an impact on the business. Prior to Visier, Jennifer led a workforce reporting and analytics team at an insurance organization in Vancouver, and she has held organizational change management and project management roles at SAP and Shell. Outside of work, she’s kept busy by two energetic sons and enjoys travelling and the outdoors.