If you’re thinking about hiring new employees now or later, then you’re probably wondering what strategic workforce planning is, and how you can develop a plan that meets your business’s needs.
Here’s a look at everything you need to know about the process, including a 7-step guide to effective workforce planning.
Strategic workforce planning is when businesses ensure that they have the right people to staff the right positions at opportune times for business growth. Business’s needs are always changing, and forecasting what roles you will need filled months in advance can help you avoid bottlenecks.
The goal is to ensure that you’re not facing overstaffing (too many people not driving enough value) or understaffing (running a business that requires more hands on deck). It’s thinking about what happened last week, today, and next month. Your current workforce can change at any moment.
Employees need to find jobs that meet their needs at the right time as well. As it turns out, employee needs and business needs are often out of sync with one another. For this reason, businesses need to have a plan for negotiating with potential employees, especially for talented people with hard-to-find skills.
For employees, this means planning ahead financially for costs such as recruitment bonuses, technology expenses, and other benefits. Other times, businesses and employees alike simply need to wait for the stars to align.
In general, HR (including Talent Management, Talent Acquisition, and People) are responsible for ensuring that each business unit has their staffing needs met in a timely manner. While finance and operations might determine what roles are necessary, HR is responsible for creating a pipeline of talent to fill open seats.
The HR department is a key player, but the CEO, COO, CFO, department heads, board members, and other stakeholders can also help with developing the strategy.
In an ideal world, businesses would post job openings, find the best candidate, give them a job offer, and begin onboarding them right away. In practice, the shortage of top talent and the crunch for resources means that companies need to plan for alternative hiring approaches.
To better understand the current economic climate and the business’s unique situation, HR teams use one or more of the following models:
Supply model (determine who is available to work)
Demand model (understand what is needed for staffing)
Gap analysis (understand the difference between supply and demand, including surpluses and shortages)
Solution analysis (create a plan that addresses gaps in current and future hiring needs through recruiting, training, contingent staff, third-party business partners, hiring abroad, and other strategies)
Every industry is different, so you will want to work with experts in your area to identify gaps and future needs, as well as stage a plan to evaluate your workforce’s performance. You need to consider your market(s), products, services, competition, and other factors. Workforce planning enables you to build a business that will last.
While many companies, especially startups, started embracing remote work before 2020, now it’s almost impossible to imagine a business world without it.
For companies looking to hire the best talent, requiring people to relocate is not just expensive. It’s also a major downside for many prospective employees and one of the most important factors new employees take into consideration while job hunting. It’s the future of work.
If you’re open to hiring employees remotely, on the other hand, you will have access to a wider range of talent. The main challenges will be ensuring that you onboard and pay them compliantly (especially if they are in another country) and ensuring that they have access to company technology, such as company-purchased work laptops.
You will need to identify current and future roles that are required to make your business a success. This might also mean phasing out roles that are no longer generating value for the company, or planning to build out your marketing function if you haven’t done so before.
The challenge is striking a balance between immediate needs and long-term staffing roadmaps, especially as employees find new jobs or retire. Hiring for quality, not just quantity, will lead to more long-term success.
Even businesses with a large staff work with consultants, freelancers, contractors, agencies, or other experts that can close the gap on crucial skills.
While the great resignation means that many employees have left their full-time jobs, the rise of the gig economy suggests that people are looking for new opportunities for career growth.
Are you looking to double revenue? Expand to a new country? Launch products in a new market? Do you need to set a specific goal for your industry? Strategic workforce planning means asking the right questions.
Determining your staffing needs depends on how quickly you want to scale up your organization. Some companies, like early stage startups, have venture capital money that means they don’t need to worry about being profitable right away. Other businesses, however, can’t afford to lose significant capital.
If you’re hiring new employees, you will want to make sure that you’re getting a solid return on your investment. Working with finance and operations, HR should invest in business analytics technology to better understand how the staff they are hiring can help them meet long-term goals. This means understanding your KPI benchmarks and learning how to measure them successfully.
You will also want to measure and analyze employee retention and turnover, revenue per employee, and budget by function.
Teaching your team new skills helps both the business and employees.
Some employees might have the right background, but lack a working knowledge of one or more elements of your tech stack. Finding ways to teach staffers new in-demand skills can benefit your business in the long run. And many employees are eager to learn skills and capabilities that will progress their careers, even members of the aging workforce.
Some organizations would simply fall apart if they lost just a handful of mission-critical employees. As you build out your strategic workforce plan, training and hiring people who can make the organization less dependent on individual people can keep your business running, even if key players leave.
Following these 7 principles of workforce planning can boost your hiring strategy. The advantages of building a workforce planning strategy are clear. Sure, it takes some upfront work. But in the long-term it can help to eliminate surprises, especially if your business experiences major changes, such as downsizing, mergers, acquisitions, and international expansion.
Companies from small startups to major enterprises want to hire employees abroad, but are unsure of how to take the next step or anticipate future problems. Via makes hiring international talent seamless. With our-easy-to-use platform, Via manages the local HR processes for employment such as work visas and permits, benefits, payroll solutions, background checks, and more. Our team of local labor lawyers and on-the-ground experts ensure that your company remains compliant while expanding abroad. As your employer-or-record/entity, Via assumes full responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team. Our customer support team is always available.
With Via’s transparent pricing, you can pay full-time employees or contractors across borders with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.
You create a strategic workforce plan by understanding your staffing needs, both current and future. You will need to evaluate their current skills, business goals, and data.
The 5 key elements of workforce planning include demand analysis, supply analysis, gap analysis, solution analysis, and executing on your plan.
Key features of a strategic workforce plan include having a data-backed approach to analyzing your staffing needs, building a strong pipeline of future candidates, and knowing when to partner with third-party partners.
Major objectives of strategic workforce planning include successfully forecasting your staffing needs in order to meet KPIs, usually related to revenue or business growth. You will need to research your business objectives before you can implement a business strategy.