By Staff Report
May. 17, 2022
Workforce planning is a systematic process that involves proactively analyzing current workforce gaps and forecasting future staffing needs to avoid potential shortages and surpluses of human capital.
It is based on the premise that a company can be staffed more efficiently if it takes initiative to regularly analyze and forecast its talent needs as well as the actual supply of talent that is or will be available.
Here are some of the benefits of workforce planning:
The primary reason for doing strategic workforce planning is economics. If done well, workforce planning will increase productivity, cut labor costs, and dramatically cut time-to-market because you’ll have the right number of people, with the right skills, in the right places, at the right time.
Workforce planning works because it forces everyone to begin looking toward the future, and prevents surprises. It requires managers to plan ahead and consider all eventualities.
While it is one of the most important issues that HR leaders and operations directors are talking about today, many have not gone beyond the talking stage as the task of actually implementing workforce planning is often seen as a daunting one. Don’t worry, we are here to break it down for you here so it’s not so intimidating.
While there is no standard “one size fits all” structure for the workforce planning process, below are some key elements of most plans, including some supplementary components that can and will work better for some companies than others.
The most common parts of a workforce planning model are:
If a company is more efficient, it can avoid the need for layoffs or panic hiring. By planning ahead, HR can provide managers with the right number of people, with the right skills, in the right place, and at the right time. Workforce planning might be more accurately called talent planning because it integrates the forecasting elements of each of the HR functions that relate to talent management–recruiting, retention, redeployment, and leadership and employee development.
Businesspeople who just wait and then attempt to react to current events will not thrive for very long. The new standard is to provide managers with warnings and action plans to combat full-blown problems before they become more than a blip on their radar.
The human resource management world is no different.
The rate of change in the talent market is dramatic. We now know how important talent is to the success of a business. It’s time to make the talent pipeline more efficient.
Many of the other overhead functions–like procurement, manufacturing, and even the mailroom–have developed effective “pipelines.” If human resources cannot develop effective pipelines, then the alternative option is to have its entire function outsourced to an external vendor.
HR professionals often face the painful boom-and-bust cycle of budget cuts, rapid growth, and more budget cuts. What they want is stability. Unfortunately, the way that some HR people act or fail to act compounds the pain of the boom or bust phases.
Everyone knows that the business cycle has ups and downs. There are phases of growth and phases of recession; each seems to happen every few years. The surprising thing is that HR, rather than preparing customized approaches for the different phases of the business cycle, tends to do things the same way no matter what the economic climate, operating independently of the business cycle.
The main reason that HR suffers through these phases is that it has no business strategy or plan to participate in its company’s business cycle. Rather than seeing the big picture and setting a strategic direction, HR departments sometimes tend to coddiwomple with temporary programs that only address crises in the moment.
HR should have two distinct reasons for planning ahead. The first reason is to lessen the impact of the boom-and-bust cycle on the management and operation of the HR department itself. The second–and perhaps more important–reason for planning ahead is that HR manages the new hire pipeline for the organization. It’s crucial to maintain both that pipeline and the talent inventory at the right levels.
This is where workforce planning strategy comes in.
To better prepare a company to handle current and future staffing needs, human resources should generally follow the four-step workforce planning process listed earlier in this article. Here is a closer look at what each of those steps entails:
This first step in workforce planning involves assessing both the current state of your company’s workforce as well as its ability to address future changes in staffing needs. Additionally, it is also important here to analyze the current external labor market, company revenues, expenses, and growth opportunities.
There are three primary areas of the Workforce Analysis:
From the workforce analysis, you should uncover a deeper understanding of your company’s current staffing situation, including its strengths, shortcomings, opportunities, and threats.
In this step, you take the information gathered from the workforce analysis and use it to pinpoint the talent gap between the company’s overall staffing needs and the identifiable supply of labor.
There are three parts to the staffing gap analysis:
This is where everything comes together. Once the workforce analysis is complete, gaps are determined, and a talent action plan is made, a solution is determined and then executed.
Deploying a workforce plan is not a once-and-done situation. It is an ongoing process built on agility and continuous improvement. Once current staffing gaps are filled and the overall workforce is strengthened, the deployment continues in the form of adjusting and adapting to changes in future needs.
Here are some of the main areas of solution deployment:
Finally, the last step of a workforce plan is performance assessment. Again, this is an ongoing process, alongside solution deployment, in which select members of your organization monitor predetermined workforce success metrics to make sure strategic objectives are being met. These metrics should speak to if the workforce plan is actually benefiting the organization at all, and should indicate if the plan was flawed to begin with or if it is not being executed properly.
Putting together an abstract workforce plan is one thing. Executing it across your entire workforce is another. Managers need the right tools and systems in place to monitor staffing levels, productivity, labor costs, and more.
While workforce planning has been around for a long time and has gone through many changes and multiple iterations, one thing is for certain: it is getting much easier.
Thanks to modern advances in workforce management software technology, workforce planning is becoming easier to visualize, deploy, and actively monitor.
In order to execute effective workforce planning and achieve your business goals, HR leaders need a whole host of software solutions at their disposal. Chief among these is obviously HR software for talent and performance management. But other solutions are also required, including workforce management and labor forecasting software, both of which are extremely important to workforce planning.
Here are some of the ways workforce management and labor forecasting can streamline your workforce planning:
Everything on a single system
Nearly all the workforce planning data you need is housed in workforce management software. From time clock and scheduling data to employee records like pay rate and ob titles, everything is held in a single, cloud-based system optimized for easy access.
More visibility into labor costs
By combining scheduling and time tracking into a single system, workforce management software allows managers to leverage real-time data on labor costs. They can view costs per team, individual, week, or location to better understand where and how they are spending money on talent. Moreover, managers can view potential wage costs on schedules, and compare scheduled costs with actual costs on timesheets to pinpoint overspending.
Increased user self-service
Onboarding and retaining employees is critical to workforce planning. With workforce management software, staff are treated to a user-friendly system to view schedules, request leave, pick up and swap shifts, clock in and out, and approve timesheets.
Easy insight into labor needs
The right labor forecasting software optimizes your workforce planning with AI and machine learning. It predicts demand and automatically matches labor ratios to that demand, making it easy to determine shortcomings in your supply of human capital. Clearly seeing where you lack the staff necessary to fulfill labor forecasts helps you hire more purposefully moving forward.
Comprehensive BI reporting
Managers can generate reports on historical wage costs, employee engagement, absenteeism, overtime, and more. These reports can be filtered by team, location, or job title, providing more clarity for managers when they are analyzing workforce trends.
Ensure labor compliance
Upon deploying a workforce plan, it is important to make sure your organization is complying with all necessary labor laws. It is particularly easy to misclassify contract workers, owe back pay, or violate various provisions of the Fair Labor Standards Act. Avoid all these issues when deploying your workforce plan with labor compliance software that schedules and pays employees accurately with the help of an extensive Wage & Hour Compliance library.
As a best-in-class workforce management platform, workforce planning is what we do. To learn more about how to streamline your business objectives with market-leading scheduling, compliance, and time tracking software, contact us today or sign up for a free trial.
We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.
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