What Is Strategic Workforce Planning, and Why Is It Important?

Strategic workforce planning is one of the crucial organizational processes that help organizations discover the talent that fits the company's future goals. It is one of the most important functions organizations use in their global expansion plans.

Because planning and an efficient talent management system is essential for an organization to reach its expansion goals, organizations are better suited to understanding what strategic workforce planning is and how essential it is for every organization.

What is strategic workforce planning?

Strategic workforce planning is the process of anticipating organizational needs and determining how many employees with specific skills are needed at certain times. It involves analyzing the current workforce and forecasting based on industry and HR trends to ensure a business has an adequate number of workers in place and access to skilled resources when necessary.

Strategic workforce planning models

While organizations understand the benefits of planning efficiently, some lack the models to deploy to manage and drive crucial organizational growth effectively. However, strategic workforce planners use these three common models.

• The supply-side model focuses on analyzing what is currently available in terms of employee skill sets and resources. It allows organizations to determine which areas need improvement or development in order to meet future needs. 
• The demand-side model focuses on anticipating future requirements based on organizational goals, projected growth and emerging technologies or trends that require new skill sets from employees. This model helps an organization stay ahead of the curve with its personnel strategy before external factors force them into reactive decision-making.
• A balanced approach incorporates supply-side analyses and demand-side evaluations; it considers current talent availability while determining the exact needs for upcoming projects/goals within a company's organizational framework.

Why strategic workforce planning is important

Workforce planning strategies are integral in anticipating potential staffing needs in any workplace setting, especially when dealing with international, remote teams and worker churn. With strategic workforce planning, organizations can understand and formulate strategies that help employees' growth. 

Other benefits of strategic workforce planning include

Developing future plans

Strategic workforce planning involves creating a pathway or a growth roadmap where the activities and plans help the organization with everything they require for the future. Creating strategic workforce planning enables the organization to set achievable goals. 

Achieve financial goals

While human resources are essential for an organization's growth and success, a key pursuit is to increase achieving the company's financial goals. Organizations will reach their financial objectives much easier with an efficient strategic workforce plan than without workforce planning.

Improve the organization's retention strength

An organization's employee retention strength improves the success chances of organizations. Efficient workforce planning ensures a clear path for employee productivity and satisfaction.

Improve employee productivity

Workforce planning clears out unnecessary work activities that drain employees' productivity and documents solutions that improve employee productivity.

Improve hiring processes

The data from your strategic workforce plan can help you identify the common traits of high-performing employees. You can use these traits to find employees who best suit your company's goals and culture.

Ultimately, this will help you to retain more employees, spend less time on your recruitment process, and save the money you'd have spent on employee replacements.

Basic Principles of Workforce Planning

The fundamental principles of workforce planning revolve around getting things right:

The Right People

The principle of having the right people involves evaluating your workforce's size, structure and composition.

It looks at where gaps exist and how best to fill them in order to meet current and future objectives. Optimizing team size is crucial; it ensures enough people are employed to progress organizational goals. This also includes analyzing employee remuneration packages and performance reviews. Potential diversity quotas can be considered for departments/teams to remain competitive across multiple industries/verticals while appeasing regulatory bodies.

The Right Skills

Securing the right skills ensures that your team has the competencies for their roles now and the learning opportunities needed for tomorrow's challenges or tasks.

This is done by assessing current workforce skills, identifying gaps between the current situation and future requirements of the organization, determining training needs, and incentivizing skill development through career development programs such as professional certifications or tuition reimbursement benefits. Ultimately this approach seeks to promote an environment where employees always look outwards towards innovation while maintaining a high standard of quality service delivery even at reduced costs!

The Right Place and Time

This principle focuses on deploying resources and how technology impacts today.

It includes looking at where people are located or should be located to maximize business operations, evaluating if work-from-home arrangements would yield measurable value-adds versus scaling up actual physical office space needlessly at a hefty price tag, and identifying which advancements in technologies can help reduce costs while maintaining agreed standards of quality along other axes (time/resource). Additionally, you must consider geographic location when entering international markets, as talent needs can vary drastically from country to country depending on local regulations and labor force laws.

The Right Cost

This principle is about aligning financial metrics with operational performance goals. Ideally, seek out areas where costs can be reduced while maintaining agreed standards of quality along other axes (time/resource).

Assess how resources are allocated and consider fixed costs such as wages, benefits, bonuses and other employee-related expenses. Weigh in inflation rates as well. This helps to optimize spending power while retaining the talent or recruiting new staff needed to meet the company's objectives. Additionally, accounting for additional overhead costs associated with having a physical office presence versus work-from-home arrangements can help determine cost efficiency without compromising output quality benchmarks.

Strategic workforce planning steps

Fortunately, while the process spans a wide breadth of considerations, the steps to workforce strategic planning are straightforward:

Analyze Objectives and Current Workforce

Gather and review relevant data to understand your workforce's strengths, weaknesses, and risks.

Forecast Future Needs

Estimate labor demand by considering company goals, trends in the industry, changes in regulations/standards etc. Take into account projected growth or other change scenarios. 

Identify Gaps and Targeted Solutions

Compare supply with demand to identify types of personnel needed now or likely required in the near-term future. Then, strategize ways (adaptation or training) to fill gaps identified between the inferred need for talent and available skill sets within the existing team(s).

Develop Action Plans and Budgets

Create initiatives (costs included) that will help attract/retain necessary staff. Include recruitment tactics highlighted previously, along with job re-balancing, development plans for hires/team members, etc.

Implement Interventions

Implement strategies via a unified planning system. Ensure continual monitoring/evaluation as measures applied directly impact all tactical actions going forward.

Review Results and Adjust Accordingly

Regularly update forecasted versus actual performance metrics at the organizational level. Benchmark individual employees' performances relative to peers, as well. Then, calculate the return on investment (ROI) realized from selected interventions.

Evaluate Progress and Successes

Revisit your original objectives to assess the amount of progress made. Analyze which problems/solutions were most effective and where weaknesses lie for future performance improvement.

Remote Workforce Planning With Skuad

Mapping strategic workforce plans are complex, especially for globally distributed teams. Skuad aims to make it simpler, more streamlined, and less stressful.

Organizations planning to expand into new markets can make the process easier by partnering with Skuad's global employment and payroll platform. 

Skuad simplifies hiring international talent, managing payroll for employees and contractors, and ensuring compliance with country-specific employment laws in over 160 countries across the globe without setting up a subsidiary or an entity. 

With Skuad, you will save time and money while enjoying the benefits of top-notch HR administration anywhere in the world. 

To know more about Skuad, book a demo today.

FAQs

What is workforce planning goal?

The goal of workforce planning is to determine the steps and processes an organization will take to actualize their current and future workforce requirements. It is a crucial process for large organizations.

Who is responsible for workforce planning?

The senior management team of an organization are usually responsible for workforce planning. The team consists of the CEO, human resources manager, finance managers and other leaders that contribute to the growth and development of the organization.

What is the most important part of workforce planning?

While every workforce planning parts are important, the planning phase before hiring employees ensures that the organization has the right team members to execute the workforce planning efficiently.

What factors affect successful workforce planning?

Some factors that affect successful workforce planning are

• The organization's financial power
• The availability of talent
• Employee diversity in the organization
• The organization's hiring strategy