What Should I Know About Workforce Planning in 2022?

workforce planning

Workforce planning is the process of analyzing and understanding your current workforce, determining your skills gaps and future demands, and developing a plan to ensure that the right people are able to perform the right tasks at the right time. 

In this article we will walk you through the goals and purpose of workforce planning, plus the cyclical steps that make up a robust workforce planning process in any organization. Ready? Let’s go!

This article is part of our guide on workforce management.

This is part of a series of articles about Workforce Management.

What is workforce planning, and why do I need to implement it in my business?

Human capital (or let’s be real and just call them people, shall we?) are the lifeblood of any business. Without the right skills and talent, it doesn’t matter how great your product is, you can’t succeed. Workforce planning is the way you make sure that you have the specific people you need doing the right jobs when you need them there, and critically – it also ensures you aren’t wasting valuable resources where they aren’t providing value.

Workforce strategic planning is a smart process that helps HR to make the right choices about staffing according to budget, organizational goals, and data related to any variables that will impact the business (and specifically HR). Rather than work according to gut feeling or in an ad-hoc way as needs and requirements spring up, workforce planning offers a strategic alternative that allows you to be proactive rather than reactive about the people needs of the company. It gives managers a heads up to anticipate skills gaps and look for alternative workforce options.

You may already be using some form of workforce planning by leveraging some workforce tools . For example, you might be aware of how many of your employees are set to reach retirement age over the next five years, or perhaps you have employees who have given notice and you are currently looking for replacements. You could be working towards internal HR goals for diversity that will affect who you hire, and when. Workforce planning adds more structure and control over these elements of the business, making your business more adaptive to change, preventing skills gaps ahead of time, and saving money by acting proactively when you have time and choice on your side.

What are the steps of workforce planning?

Different businesses will have their own method and strategy for implementing workforce planning, but they all tend to follow a similar pattern. It starts with analysis of the current organization, followed by forecasting demand for future needs, identifying any gaps between the two, and then developing an implementation plan for filling those needs. As a cyclical process that’s not simply “one and done”, you’ll need to continually monitor, evaluate and revise your needs. Let’s go through the three main steps in more detail:

Analyze the workforce 

What people do you currently have, and what do you know about them? Here’s where workforce analytics tools can be really helpful, providing insight into engagement levels, retention trends, the impact of your recruitment efforts, and your training and development programs. At the moment, only 33% of HR leaders say that their organization is effective at using data in workforce planning, so leaning on third-party tools and technology can be of great help.

You should look for a mixture of quantitative data and qualitative data, the latter of which can be drawn from interviewing employees during review meetings or even with offboarding surveys. From this two-pronged analysis, you’ll be able to isolate information such as which employees are at risk of leaving the company, and whether you’re getting a good ROI for your talent acquisition processes.

Identify skills gaps

Now that you have a good understanding of your current workforce, it’s time to look ahead by creating a workforce forecast. What are your organization’s goals for the next 3-5 years? What people, characteristics and skills do you currently have available to you, and do they align with these goals?

On a granular level, if your business has a goal to move to the cloud within 24 months, do you have AWS or Azure architects or engineers on board? Zooming out on a more macro level, if you can identify how you are likely to be impacted by the Great Resignation, (and McKinsey research suggests 18% of the workforce are between “likely and almost certain” to quit before 2022 is out) then you can plan ahead to improve talent and acquisition processes ahead of time, to meet the shortfall in staff.

Develop an action plan 

Now that you understand what you need, and you know what gaps there are – how are you going to fill them? If there are full-time positions available, and you have the budget free, you might hire employees who have specific skills and experience. If you identify a temporary need, you could choose to enlist freelancers or agencies for a fixed project. Your third option is to put existing staff on a new project, even if that involves them upskilling or adding training to their professional toolbelt.

If for example the VP Marketing would like to revamp the website this year, they might decide to hire a freelance web designer and content writer to support the in-house team, plus ask your Head of Marketing to supervise and manage the project as part of their full-time role. The organization may offer the Marketing team the opportunity to enroll in a UX design course which will add value to their CVs, (a great talent retention strategy) while supporting them in contributing to this task.

What are the roles of HR and senior management in workforce planning?

While HR will likely take on the details of workforce planning, including deciding on the balance between freelance talent, new hires, and upskilling, you’ll definitely need executive support, too. This will be essential when it comes to identifying organizational goals as well as getting buy-in for data analysis or workforce management tools that can make workforce planning more accurate.

As workforce planning is a continuous activity, it can be helpful to get a specific member of the c-suite to champion the project, perhaps the CHRO, or if there isn’t one in your company – the CIO or COO can be a good fit, too. You’ll also want to designate someone from HR to be the point person for staying on top of strategic workforce planning with a quarterly report or meeting for key stakeholders. Here, you can evaluate change, align with current organizational goals, and make decisions on your future workforce needs.