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

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

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Introduction

Workforce planning is one of the most effective tools that an organization can use to stand out from the competition. Unfortunately, many organizations need more tools for its implementation. They miss out on revenue goals because of their disorganized hiring procedures.

However, this is changing as companies realize that workforce strategic planning brings many benefits to their daily operations. If you do not have a strategic workforce plan, you should create one immediately. Even if you have one, there is always room for improvement.

Getting the right employees for your business can be a hassle. This article will examine strategic workforce planning and how it can help you.

What Is Workforce Planning?

Workforce planning means ensuring that individuals with the right skills are where they need to be at the right time to meet your organization's current and future needs.

You can achieve this by utilizing business analytics and input from the finance, HR, and procurement departments. Therefore, workforce planning requires contributions from all departments for it to be effective.

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Why Is Workforce Planning Important?

Some of the benefits of implementing an effective workforce plan include the following:

Achieve Financial Goals

In business planning, finances and human resources complement each other. The workforce brings revenue to the company. Using the data from your workforce plan, you can identify what each employee brings to the table.

In addition, you will only hire and retain valuable employees in your company. Wastage of resources will be reduced, enabling your company to realize its financial goals.

Prepare for the Future

Since a strategic workforce plan looks at your current and future business needs, you can recognize the talent you need. Consequently, you can prepare to acquire and retain employees with skills relevant to your company's needs.

Promote Collaboration

Workforce planning encourages all members of an organization to contribute to its growth. Collaboration can happen at the micro level, whereby teams meet and engage in quick, real-time exchanges and instant messaging. It can also occur at the macro level, where the teams or departments collaborate over long periods through connections created over time.

A study conducted at Stanford found that people who collaborated were 64% more likely to focus and stick to a task than those who were working alone. They were also likely to feel more engaged and less tired while completing their activities.

Identify Gaps in the Workforce

Identifying gaps is essential for any business to thrive. Here, you analyze your employees' skills to find out if there are any gaps between those skills and the goals of your business. These gaps will inform your future hiring criteria, as you will choose employees who can fill them.

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.

The Basic Principles of Workforce Planning

Right Workforce

Hiring new employees enhances the ability of your company to achieve its financial goals. Thus, you should continue hiring new employees who can handle their obligations.

However, hiring more employees than required can lead to inefficiency in the organization. You need to determine the correct number of employees depending on your needs.

Thanks to globalization, you can hire remote employees from around the world. You have many hiring options, increasing your chances of getting the best available talent.

Right Place

Employees should be placed in their areas of specialization to boost their productivity and output. Also, you should only hire employees with skills that coincide with the company's needs.

Right Time

Hire employees with the skills and expertise your organization needs at that given time. Unneeded employees are a waste of resources and can lead to poor performance for a company.

Right Cost

Companies need to take into consideration the costs they will incur when hiring. These include costs for job advertisements, interviews, employee salaries, and benefits. Spending too much could lead to sluggish growth, lackluster profits, and even bankruptcy.

Effective Steps to Strategic Workforce Planning Process

Use these steps to build an effective workforce plan:

1. Assess Objectives

The primary purpose of strategic workforce planning is to help you achieve your business goals. Thus, assessing your objectives is the first step to building a strategic workforce plan.

For this to be effective, the right people need to be involved. These include business partners, HR professionals, line managers, financial services representatives, HR technology experts, and business executives.

2. Analyze Your Workforce

Gather information about the number of employees you have, the positions they are occupying, and the importance of each role. Take inventory of the knowledge, skills, and experience they have.

Also, review the performance of your employees based on qualities such as teamwork and leadership. Analyze whether your employees have any specialized expertise or qualifications.

Workforce analysis enables you to identify the skill gaps you have in your organization, learn why you have been losing your staff, or find the reason you are constantly facing understaffing issues.

3. Identify Skills Gaps

A skill gap is a difference between the skills your company needs and what your current workforce offers. Identifying these variations will provide valuable workforce data for the future.

A skill gap analysis can help you predict skills gaps before they occur so you can have adequate time to prepare. That way, you can fill a gap before it brings any adverse effects to your company.

4. Analyze Future Workforce Formation

Preparing for the future gives companies a competitive edge in their industry.

You need to develop a workforce strategy that predicts future issues and comes up with actionable steps to address them. Have a clear idea of what your future workforce will look like, what skills you need, and how you will get those skills.

5. Develop an Action Plan

Next, develop a plan that addresses your staffing issues. It should include strategies for recruiting and maintaining talent, enhancing technologies, and restructuring the organization.

6. Implement the Action Plan

Ensure that you have adequate resources to implement your plan. You should have specific deadlines and plans to take advantage of them. You should also collaborate with the finance department to confirm your realistic budget.

7. Test and Monitor the Plan

Creating a strategic workforce plan is a fluid, ongoing process. Changes in staffing needs, the company’s management, or the economy may occur. Besides, developing new products may cause your employee requirements to change. For these reasons, you should adjust your plan regularly to accommodate growth and change.

Remote Workforce Planning

Strategic workforce planning prepares companies for unpredictable circumstances such as the COVID-19 pandemic. It helps them to remain invincible in times of crisis.

When the pandemic began, many businesses had to shift to working from home to ensure the safety of their employees. Remote work turned out to be quite efficient, as employees worked more productively, helping companies to meet their goals.

Today, remote work is the new normal. Employees worldwide are more conscious of the benefits of good work-life balance. Top companies also use remote work to attract and retain the best talent. If you want to remain on top, consider assembling a winning team of remote talent.

Here are some ways to make remote workforce planning successful:

  • Use a global employment provider like Skuad to manage your remote workers globally
  • Put in place clear rules and regulations. These should outline the responsibilities of your employees, their required performance, and the company’s goals and objectives.
  • Communicate effectively to make remote workforce planning a lot easier.
  • Prepare adequately to respond to any issues that may arise.
  • Have clear goals and expectations, and continually monitor and test the action plan.

With the marketplace becoming more competitive by the day, it is now more important than ever to differentiate your business and remain ahead of your competition. Developing an effective strategic workforce plan for your in-office and remote team is essential to putting your organization on its path to success.

Make Workforce Planning Easier With Skuad

Having the right talent is key to the success of your organization. Workforce planning allows for proper utilization of your employees' skills. It also helps in analyzing performance metrics, forecasting market trends, and planning for the company's future changes.

Skuad is committed to making hiring and managing a global team easier and more efficient. Through our unified platform, you can hire and onboard new employees from across the world in minutes, securely run global payroll, manage benefits, and maintain compliance.  

Book a demo with a Skuad to learn how to implement your killer workforce strategy.

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