WORKFORCE PLANNING

Understanding workforce planning and its impact on businesses

Businesses often struggle with costly turnover rates or unexpected talent gaps. Predicting future workforce needs can be difficult and negatively impact business. Business conditions are rapidly changing, sometimes from one day to the next.

When companies engage in workforce planning, it’s easier for organisations to align their talent strategies with their business objectives. Workforce planning takes the guesswork out of ensuring organisations have the right talent when needed.

We’re looking at various types of workforce planning strategies, their benefits and some practical implementation approaches.

Table of Contents

What is workforce planning in today’s terms?

The meaning of “workforce planning” is fairly simple: it’s the process of analysing, forecasting and planning an organisation’s talent supply and demand.

This doesn’t necessarily mean always having employees waiting in the wings, ready to jump in as needed. Instead, the organisation always has the necessary workforce to handle all daily operations, regardless of any surprise needs.

Long-term workforce planning is a strategic process that contributes to a company’s growth or other objectives. Short-term workforce planning is more operational, ensuring operational needs are met. By combining long-term workforce planning strategies and shorter-term operational practices, businesses can proactively meet all current and future staffing needs.

However, for strategic workforce planning to succeed, a few essential components must be addressed. This also applies to a business’s short-term operational goals. A comprehensive workforce planning strategy uses a needs assessment and gap analysis to create an action plan. The same data is instrumental in implementing the strategy and monitoring its success.

Workforce planning strategies at Telstra have impacted its bottom line: “We have reduced costs by $2.7 billion and reached high-performing employee engagement levels, with more than 17,000 people in the organisation now using an agile approach and more than 90% at level 3 agile maturity, all supported by Workday.”

Strategic vs. operational workforce planning

Strategic planning addresses an organisation’s long-term goals, while operational workforce planning focuses on what a company needs right now. Retailers may need to increase their sales force during peak sales season and scale back during slower periods.

Using strategic workforce planning, organisations are ready to meet seasonal demands and reduce staff when sales slow down. The savings on operational costs can be extensive, and the company is always prepared to meet any unexpected demands.

So, what are the timeline horizons for the various workforce planning strategies? After all, enterprises don’t want to be caught understaffed. They also don’t want to pay for more team members than their organisation needs.

Operational planning generally takes up to 18 months. Remember, this short-term strategy ensures you aren’t left with staffing gaps. A good example of this is a retail store preparing for the festive season or a special event.

The same principle applies to long-term workforce strategies. The goal is to be ready for any jumps in business operations. Since the business is working towards a long-term goal, don’t be surprised if it takes anywhere from two to more than five years to get the strategy just right.

For example, if a healthcare organisation plans to open a specialised surgical centre in two years, planning is needed to find, hire and train specialised medical technicians, nurses and doctors.

Both approaches can help create a comprehensive workforce strategy by addressing short- and long-term workforce goals. A strategic approach helps ensure that an organisation is ready when demand kicks up. Combining it with an operational strategy ensures that it’s meeting its daily business needs without anything potentially falling through the cracks.

How workforce planning methods include both quantitative and qualitative techniques

Effective workforce planning methods use a combination of quantitative and qualitative methods. Some effective quantitative techniques include workforce analytics, predictive modelling and scenario planning.

Don’t forget about qualitative methods to help ensure organisations don’t leave talent gaps. This typically includes conducting regular talent reviews, eliciting expert input and planning for succession. Even long-term team members eventually leave for one reason or another, and a workforce planning strategy should cover this eventual scenario.

Workforce planning involves forecasting an organisation’s future talent requirements to ensure operational efficiency. Management seeks guidance on selecting appropriate workforce planning methodologies based on situational context. Temporary absences, such as employee vacations, typically require short-term tactical solutions rather than comprehensive strategic planning.

Conversely, addressing permanent staffing changes due to retirement necessitates a more thorough, long-term approach to talent acquisition and development.

Workforce planning benefits help increase agility

The advantages of workforce planning can be surprising. When the right people are in the right place, organisations can experience a surge of productivity towards their goals. Businesses can watch excessive hiring and overtime costs go down. Contractor expenses also drop since the need for costly temporary help has been eliminated.

Industry compliance is crucial regardless of your business. Workforce planning helps to eliminate this potential issue by mitigating employee risks. Your staff are trained in your organisation’s best practices. You’re also helping to eradicate critical skills gaps within your team. Streamlining employee recruiting, development and retention helps improve overall talent management.

By implementing sophisticated automated and self-service processes, Macquarie University was able to eliminate 23 different forms and consolidate 3 different timesheet solutions.

Since workforce planning allows businesses to respond faster to changing market conditions, companies have a competitive advantage simply by optimising their talent.

Strong workforce planning helps anticipate growth

A workforce planning framework doesn’t need to be complicated. However, if you want to know how to incorporate workforce planning, it’s a good idea to take a structured approach. Using an Excel workforce planning template can make it easier to create an approach that benefits your organisation.

The steps you should plan on including in your workforce planning model include:

Business strategy alignment and demand analysis
Current workforce capability assessment (supply analysis)
Gap analysis and future workforce modelling
Action plan development to address gaps
Implementation and change management
Measurement, evaluation and refinement

To create an effective workforce planning framework for different organisation types, begin by aligning the core planning steps.

The organisation’s specific strategic objectives, operational tempo and industry dynamics ensure that the framework’s complexity and time horizon match the organisation’s size and maturity.

Then, implement customised measurement metrics and evaluation processes that reflect the unique key performance indicators of each organisation type, whether it’s a rapidly scaling start-up, established enterprise, public sector agency or non-profit entity.

Practical workforce planning implementation

Implementing a workforce planning strategy starts by assembling the right team. This usually includes executives, operations managers, finance and HR.

After collecting the data necessary for an effective workforce planning strategy, HR starts developing a model based on existing and missing talent skills. You’ll know what you have and what’s potentially missing from your organisation.

Overcoming everyday challenges can be daunting. You may run into problems accurately forecasting workforce planning needs. Addressing skills gaps can be another challenge, especially if data collection is manual and not automated. However, most challenges can be addressed during the initial planning by encouraging open communication among stakeholders.

Some of the best practices for sustainable workforce planning include prioritising employee well-being, developing skills to adapt to changing workplace environments, and ensuring your workforce planning is aligned with your long-term business goals.

Taking advantage of workforce planning tools and technology

Organisations don’t need to create a workforce planning template on their own. They can take advantage of workforce planning software options such as Excel. For smaller organisations, Excel workforce planning templates are easy and convenient to use. Simply use the spreadsheet to list essential planning and implementation steps. Excel is also great at managing data.

While Excel is a great option, organisations probably don’t want to use a standard spreadsheet. They can find free templates through Excel’s service provider (Microsoft) or branch out to a third-party vendor.

A workforce planning dashboard is another option. You have plenty of flexibility in visualising and monitoring your workforce planning strategy. Larger organisations may want to use something more robust, such as advanced workforce analytics platforms. The advanced capabilities make tracking large amounts of data across multiple departments or geographical locations easier.

If workplace planning functionality and smooth integration are key, Workday workforce planning offers this and more. With a Workday workforce planning template, all stakeholders are linked in and invested in ensuring all operational tasks are covered even when demand is up.

Choosing the right technology based on an organisation’s needs is the best way to create and implement an effective workforce planning solution.

KPIs and metrics of workforce planning success

Businesses need to pay attention to workforce management KPIs – it’s how they track the effectiveness of their workforce planning strategy. Some of the metrics they should watch include measuring their talent gap retention. This metric gives them a good idea of how long employees stay and if your workforce planning strategy should address your staff’s overall well-being.

Your cost-related metrics are just as important. These metrics let you know how long, on average, it takes to fill an empty position; your staff turnover costs; and what you’re spending for each new hire. Without these KPIs, it’s challenging to create an effective workforce planning strategy or even determine if operational goals, such as staffing costs, are being met.

The impact of workforce planning on your business is something organisations should be tracking. From productivity to revenue generated per employee, these KPIs let them know if their strategy benefits their organisation or leads to higher operating costs.

Something all businesses, regardless of size, should plan on including is a workforce planning dashboard, which displays all workforce planning metrics for executive visibility.

Strategic workforce planning is future-ready

Some of the emerging trends in dynamic workforce planning are ensuring that the strategy is ready to help businesses meet the future. AI and predictive analytics are a part of workforce forecasting. Skills-based planning is taking the lead over more traditional role-based approaches.

Instead of focusing solely on what’s typically included in an employee’s role, the future of workforce planning is expanding beyond a simple job title. Gig workers also aren’t being left out of strategic workforce planning. The future is calling for more flexible workforce considerations.

Are you ready to optimise your workforce and address any talent gaps? Take a structured approach to assess your next steps in workforce planning.