Workforce planning is the process by which an organization determines future people requirements needed to achieve the strategic objectives of the organization. It requires an analysis of numerous internal and external factors including current staff, long and short-term needs, labor markets, and weaknesses in the talent pool. It also calls for a detailed understanding of the skills of the workforce and advanced decision support tools to help maximize the organization’s talent pool. Workforce planning includes activities such as staff planning, capacity planning, and forecasting and should include predictive analytics; its purview is the entire breadth and depth of an organization. Companies that maintain an effective workforce planning process understand the capabilities and trends in the marketplace and can use that knowledge to make effective decisions about the talent pool. Recent studies show that it makes a difference. A 2018 Conference Board study showed that organizations with more active HR analytics programs are:
Previous research by Mary Young at the Conference Board further emphasizes the benefits of strategic workforce planning, including:
But in reality, very few organizations have fully implemented workforce planning, much less reached the “Best Practice” level. Most struggle with foundations such as securing the right data, applying the right analytical techniques, finding the right skills to staff the function, and in some cases, making the investment required to make it effective. There are many reasons for this. Fundamentally, the skills associated with building a robust analytics program don’t exist in most HR organizations and they are scarce in the marketplace. In addition, the journey itself is complicated because of a number of factors:
There is no substitute for having resources available who have truly done this before – whether you buy or borrow them. As a number of companies have seen, building the talent from within has a low success rate without experienced talent on board to lead that development.
Those who have implemented it fully are seeing positive results and tangible business benefit, and there are a number of good models and case studies out there. Our clients have seen a number of real impacts including:
While effective analytics have been a significant benefit to those who have gotten them right, they are increasingly becoming a critical capability just to survive in today’s market. Many talent segments are just too dynamic, and the right talent is too scarce to be able to compete the old way. Organizations need to be ahead of the curve from a talent perspective, regardless of what the economy does. In the current economy, scarcity challenges many businesses and effective analytics are required to get ahead of the curve, keep rising costs down, and ensure that you have the supply to meet your growth needs. But as we have seen in previous downturns, effective analytics are just as important to keep your key talent, optimize cost without sacrificing capability, and identify talent opportunities in the market.
At a minimum, HR organizations today should have deep insight into a number of talent dynamics, including:
HR should be able to use this data to do basic forecasting of needs and to drive fundamental decisions on talent acquisition and talent development. In addition, your organization should be at the very least identifying the predictive analytics that will drive your business goals and moving toward putting those in place. If these foundations aren’t in place, your organization needs to look at stepping up its investment in analytics or it risks falling behind in its people strategy.
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