Strategic Workforce Planning
Workforce planning, also called strategic workforce planning, is about making sure that the right person is in the right job at the right moment. This means that there are not too many people available (over-staffing) nor too few (under-staffing). Many organizations are not sufficiently aware of the current or future workforce gaps that will limit execution of business strategy.
Workforce planning has two major facets: one is operational and the other is strategic.
- Operational workforce planning looks at the short-term–typically 1–2 years out–and helps the organization map existing skills, capabilities, and resources back to more near-term requirements.
- Strategic workforce planning addresses not only the number of people required to execute the business strategy, but looks at the skills and capabilities those individuals will need in the long-term.
To have an effective workforce strategy, you need to have a well-articulated business strategy. After all, if you don’t know where your company is going to be five years or more from now, how can you identify the skills you will need to get you there?
You’ve probably heard the phrase, ‘a prescription without diagnosis is gross malpractice’. When conducting a supply and demand analysis, it’s important to understand whether your existing capabilities align with the future aspiration of where your business wants to be. This needs to also be integrated with a deep understanding of skills and capabilities for the future, and organizations need to put in place interventions to bridge any gaps.
An example is a major European airline group. The SWP team in this organization estimates the number of pilots they need to attract by tracking a number of key metrics.
- Number of air-crafts purchased. These are long-term orders planned years in advance. These orders are placed after a meticulous analysis of future demand. The number of pilots needed in the organization depends on the number of airplanes
- Age distribution of the pilot workforce to calculate the retirement rate. Retired pilots need to be replaced.
Using this data, the airline company is able to predict the number of pilots that need to be hired (because of aircraft fleet expansion and retirement) up to 10 years in advance. This helps them to plan their recruitment activities. Getting pilots ready only takes around 2 years. This way the company is able to anticipate the increasing shortage in airline pilots by recruiting with very specific hiring targets which help in planning recruiting activities.
People Analytic is essential for effective workforce planning. With proper visualization we will get proper understanding of HR processes and needs . This insight is particularly crucial for organization operating in different geographical regions.
Strategic workforce planning is critical for filling the skill gaps of today and tomorrow, but many HR leaders lack capabilities and maturity to tackle this key activity.“When we asked HR leaders to evaluate their function’s ability to successfully execute workforce planning, only half felt at all confident,” said Emily Rose McRae, Director, Gartner.
