We’ll just come out and say it: It’s been a tough year for recruiters. There’s a reason why 2021 has been referred to as the “Great Resignation” and the “Talent Wars,” and it’s because we’re currently in the midst of an acute talent shortage.
Recruiters can no longer assume that there is ample talent waiting in the wings to be hired on whenever needed.
But there is hope—a strong workforce planning strategy can help your organization avoid getting caught in the war for talent.
As an HR leader, it’s your responsibility to drive your organization’s workforce planning strategy. If you’re new to this kind of planning, don’t worry; we’ve put together this guide to help you. In it, we’ll explain what strategic workforce planning entails and why your organization should embrace it as soon as possible.
Strategic workforce planning, often just called workforce planning, is the process organizations use to determine their current and future staffing needs. This process typically relies on data analysis and forecasting in order to determine whether existing employees can fill skill gaps, and if not, where new hires are needed.
Workforce management software and HR analytics tools are frequently used during strategic workforce planning to make predictions about future labor needs based on past and present data, industry trends, and organizational goals.
Visit our Workforce Management (WFM) Software Guide.
Workforce planning helps minimize the challenges associated with talent management by analyzing current and future talent needs. This allows HR professionals to focus on building talent pipelines and upskilling existing employees in order to meet the short- and long-term goals of their organization.
For example, if your organization has an aging workforce, you could be facing a talent shortage in the near future as many of your employees retire. With an effective workforce planning strategy, your organization can anticipate and plan around challenges like this one rather than scrambling to respond once the problem becomes apparent.
This is especially true for today’s HR teams that are facing fierce competition when it comes to filling roles. In a GetApp survey earlier this year, we asked employees with recruiting responsibilities which factors are currently hindering their recruiting efforts; the top answer (17%) was, "there aren’t enough qualified job seekers," followed by, "roles and responsibilities are changing too rapidly" (10%). (See our survey methodology at the end of this piece.)
Considering the pace at which skill needs evolve and the limited pool of qualified candidates, organizations need a strategy to determine who they need to hire and when in order to avoid ending up short on staff.
According to Gartner, 77% of HR leaders feel workforce planning is important for their own success, and planning for future talent needs is the number one concern for HR leaders when it comes to the future of work.
However, only half of HR leaders are confident in their HR functions’ capability to execute workforce planning at their organizations (full source available to Gartner clients).
If you’re one of those HR leaders who doesn’t feel confident in your workforce planning approach, use the five step-strategy below as a guide for redesigning your own.
1. Define short- and long-term business goals
The primary goal of workforce planning is to make sure that your employees are able to deliver on business objectives, so it makes sense to start by defining your organization’s short- and long-term goals. The more specific you can get with your organizational goals, the better, because it will help you measure the success of your plan after launching.
At this point in the process, it’s essential to involve partners outside of the HR department including line managers, department heads, and executive level leaders. These stakeholders will have a clear idea of individual business units’ goals and how they level up to larger organizational goals. Work together to define short-term goals (initiatives occurring over the next one to two years), as well as long-term goals (initiatives occurring over the next three to five years).
2. Evaluate your current workforce
Before you can determine who you’ll need to hire over the next few years and when, you need a thorough understanding of the people and skills you already have. So, the next step is to do a deep dive into your current workforce. This means analyzing the headcount, types of contracts, distribution of skills, development potential, and age demographics of your employees.
HR analytics software can be very helpful for this step. These tools collect employee data from other systems (such as your payroll platform or performance management software), process it, and analyze it for meaningful trends. Then, those trends can be turned into easily interpretable charts and graphs that you can share with stakeholders.
3. Conduct a skills gap analysis
Should you upskill your current employees or increase your headcount? It’s hard to answer this question without knowing which skills your organization needs to acquire. Conducting a skills gap analysis will help with this step, and this is also where labor market data is useful.
Being aware of talent supply forecasts and emerging trends in your industry will help you make better talent acquisition decisions. Free resources such as Indeed’s list of the most in-demand skills are a good place to start, but if you’re looking for more detailed reports, you’ll likely have to shell out for specialized artificial intelligence software.
You can hire an external expert to help with a skills gap analysis, or you can take on the process internally. With the latter, HR typically partners with department heads and leadership to determine the current and future skills needed to accomplish the goals defined in step one. For a more in-depth walkthrough of how to conduct a skills gap analysis, check out this guide from Workable.
Further reading: 5 Ways SMBs Can Bridge the Digital Skills Gap Post-COVID-19
4. Develop a plan of action
Now that you know the skills your organization needs, you can develop a plan to acquire them. Your plan may include increasing headcount for the next few years or starting an upskilling initiative within specific business units. It may also include reducing your headcount if you found during analysis of your current workforce that there are employees whose skills are limited or redundant.
If you’re planning on recruiting new talent, applicant tracking systems (ATS) can help you source and screen applicants for certain skill sets. Learning management systems (LMS) can assist with development initiatives, and some of these tools even come with a library of pre-built courses your employees can access at any time.
Check out "How To Grow Your Business Through Employee Development" for a step-by-step guide to upskilling your employees.
5. Continuously measure the success of your plan
Your workforce plan should be flexible; continue to measure its success every six months and make adjustments based on how it's going. Some metrics you can use to judge the impact of your strategic workforce plan include: employee headcount, attrition, turnover and retention rates, time-to-hire, average employee tenure, and internal mobility rate.
You probably already know what we’re going to say here, but analytics software makes tracking these metrics painless. You can use these tools to design custom dashboards that update with the information you most care about in real time, or build reports with key metrics to share with leadership.
To get started, check out our Category Leaders, a list of the top ranking HR analytics tools based on real user reviews from last year.
A strong workforce planning strategy can help you stay one step ahead of your competition. Use the steps above to help you get started drafting a plan, and check out these additional resources for extra guidance:
Business Case for Strategic Workforce Planning (available to Gartner clients)
The GetApp Recruiting Strategy Survey was conducted in July 2021. We collected 300 responses from workers with recruiting responsibilities at U.S. employers. The goal of this survey was to learn how much companies are struggling with recruiting and hiring, and what solutions they’ve considered to improve recruiting and hiring outcomes.
Note: The applications selected in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.
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