By Alexandra Zatarain
Strategic workforce planning answers the question—“What are our business goals over the next several years and what kind of workforce will we need to reach those goals?” Once you know where you want to go, you can identify the type and amount of talent you need to get there.
Understanding the present and upcoming talent needs and bridging the gap between today and tomorrow can make a big difference in the ability to execute strategy effectively, and will definitely impact an organization’s productivity.
Strategic workforce planning is “a systematic process that includes forecasting both short- and long-term organizational human capital requirements, measuring current workforce capabilities and competency gaps, formulating strategies to close gaps for both current and future workforce needs, and measuring the effectiveness of those actions”.
According to hrmguide.com, SWP helps:
- control employee costs
- assess talent needs
- make informed business decisions such as whether it’s more cost effective to outsource an activity or add full-time employees
- assess human-capital needs and risks
The objective ultimately is to ensure that an organization has the right number of people at the right place with the right skills at the right time to fulfill the agency’s strategic plan. “Acquiring and retaining the best qualified, best fit, highest-performing talent for the best price is paramount for any organization” (Giehll & Moss, 2009)
Strategic workforce planning can pay dividends by helping agencies to create a stronger, more highly skilled workforce. According to a September 2009 report by the U.S. Merit Systems Protection Board, previous psychological study has concluded that “a superior skilled worker produces 32% more output than an average worker, and a superior manager or professional produces 48% more output.”
The plan
A Strategic Workforce Plan must first put into consideration the total workforce: permanent and flexible staff. “Strategic workforce planning is the data-driven approach to determining exactly which skills a company needs at any given time in the future, the location where the talent is needed and the most cost-effective resource type” (full time, temp, contractor). (Giehll & Moss, 2009). This assessment will justify the size and cost of the workforce by providing the data essential in a strategic planning. With this data, human capital demand fluctuations can be detected and acted upon.
A SWP is different for each organization, based on factors such as company culture, skill set availability, objectives, etc. For a company in the services sector, retention will be a priority since they rely on their talent’s abilities, while for a retailer relying on unskilled labor, workforce plan will reflect the need to anticipate turnover and bring in low-cost talent quickly.
Top management and SWP
28% of Best-in-Class organizations are holding the CEO or Board of Directors primarily accountable for workforce planning
C-level commitment and support for creating and managing a SWP is essential for its success. A SWP will require both Procurement and HR departments to synchronize their activities, thus the need for C-level management support of the plan.
The need for a plan
A study from The Conference Board reported the aging workforce and an emerging retirement wave among ‘baby boomers’ as they main reasons that are driving more businesses toward ‘strategic workforce planning‘.
The present multi-generation workforce is pushing the implementation of a strong workforce planning program, mainly for reasons such as:
- The turnover increase as retirements rise over the next decade.
- The replacements will come from Gen X and Net Generation workers. Experts expect lower-to-mid level turnover to rise.
- Some older employees may extend their careers or be willing to stay under more flexible working arrangements.
- Current employees will be promoted to fill the gaps left from the increased turnover, which will bring a height in advancement opportunities.
- More replacement hiring will come from private industry companies.
- The need for mentoring will increase, which will signify a change in managers’ work schedules.
- Leaders will need to adopt and embrace different practices in order to retain their workforce.
- The need for resources required to recruit, train and retain will rise.
Carrying out a thorough assessment of the current human capital will help discover and address critical issues, understand patterns and trends, identify top performers, customize management approach, among other benefits. Every company must consider a SWP as essential in human capital management.
“While no organization claims to have achieved it yet, many believe that the ultimate payoff from strategic workforce planning will be a vibrant, internal job market that transcends the boundaries between business units and geographies,” concluded Young. “The company will be able to mine employee data to locate talent anywhere in the organization, woo passive job candidates, and find the best use for each employee.”
References
Giehll, T., & Moss, S. 2009. Human Capital Supply Chains. Mill City Press. United States
