Workforce planning allows you to anticipate your future staffing needs and align them with business goals. It’s a strategy to ensure sustained success and growth.
But it’s not just about filling gaps. It’s about strategically shaping the workforce to meet future challenges and maximise opportunities.
A skills-based approach to workforce planning helps build a dynamic and resilient organisation. By focusing on the specific skills needed for success in your organisation, you can become more agile and make better hiring decisions.
This toolkit is your guide for harnessing the full potential of your workforce with a data-driven approach focusing on human capabilities.
Key Takeaways
- View workforce planning as a continuous, iterative process
- Take a holistic overview of work skills and employee capabilities
- Understand the steps and best practices involved with skills-based workforce planning
- Be ready to uncover the hidden skills and potential capability of your own workforce
Read the document below or download the white paper
Section 1: Why Workforce Plan?
Why does workforce planning matter? What’s the point?
If you want to jump straight to the framework, head over to Section 4.
The Business Case for Workforce Planning
A common cause of stagnated growth for large businesses is over- or under-resourced teams. Both effects are detrimental:
Overstaffing increases operational costs and reduces opportunities for career progression. When there are fewer opportunities for growth and collaboration, staff become demotivated and bored, also known as ‘bore-out’. There may not be enough work to fill everyone’s time, which leads to further disengagement.
Understaffing leads to burnt-out, disgruntled employees and ultimately affects your downstream clients. It can lead to overtime wages, increased sick leave, missed market opportunities, and low staff retention.
The Solution
Workforce planning allows you to proactively manage your future talent needs. It takes a systematic approach to forecasting future workforce needs by analysing current talent trends and implementing strategies to bridge any gaps.
Done correctly, workforce planning enables you to proactively adjust to changing market dynamics and evolving customer demands. It’s a method of de-risking your business by future-proofing your workforce.
Benefits of Workforce Planning
Agility
Organisations that engage in effective workforce planning are better positioned to adapt to changes in their operating environment.
(Skills-based) workforce planning has two foundational components: defining what skills are required within different aspects of a business environment (e.g. jobs, teams, projects, initiatives); how much of the skill(s) is required and when and understanding the workforce’s overall capability to perform them. With this in place, comparison of supply to demand will highlight employees’ versatile, and often hidden, talents, which better prepares an organisation to adjust its staffing structures quickly when facing new business challenges and opportunities, as well as gaps requiring address. This type of Agile transformation prioritises collaboration, customer centricity and feedback.
A survey by McKinsey found that companies that successfully adopted Agile transformation were:
- Better performing
- More profitable
- More innovative
- More efficient
- Had more engaged employees
- Had more satisfied customers
The benefits of Agile and workforce planning, therefore, go both ways.
Talent Utilisation
Workforce planning helps identify hidden talent within the organisation, so you can redeploy underutilised resources to more valuable areas. This better utilises talent and can lead to significant cost savings.
A report by Deloitte highlights the following cost savings achieved by some of their global clients after conducting workforce planning:
- $6 million per 100 employees saved on staffing costs
- $13.5 million saved on annual hiring costs
- $7.3 million saved by retaining 94 critical employees
Leveraging such cost savings through identifying hidden talent is only possible if an organisation knows what skills its employees have and where to make the best utilisation of those talents.
Talent Acquisition
Forecasting future talent needs allows you to adopt a more strategic approach to recruitment. It acts as a strategy for targeting candidates with the skills and capabilities required for long-term success, scheduling recruitment activities so new hires start at the ideal time, and planning onboarding and training to accelerate time to productivity.
According to a report by LinkedIn, 69% of HR professionals believe that skills-based workforce planning is a key element of talent acquisition.
Reduced Turnover
Effective workforce planning can lead to higher employee satisfaction and engagement, as it focuses on ensuring that individuals are aligned with roles that match their skills and career aspirations.
This alignment can reduce turnover rates, with research indicating that companies with high employee engagement levels see 24% lower turnover.
Increased Productivity
Aligning workforce capabilities with organisational needs can lead to increased productivity and efficiency. By placing people with capabilities aligned with the skill needs of their role, people complete tasks faster, with less guidance/input from others and deliver higher quality work both in outputs and relationships.
Employees whose capabilities are aligned with their role requirements are happier and more engaged, which studies have shown leads to increased productivity.
A study by the Boston Consulting Group found that company managers with strong people management skills see revenue growth 3.5 times higher than those with weaker practices.
Section 2: How skills-based workforce planning works
- Strategic Alignment: Skills-based workforce planning ensures staffing decisions are directly aligned with business objectives. By understanding future industry trends and organisational needs, companies can proactively recruit and develop the right skillset among their workforce.
- Cost Efficiency: Forecasting staffing needs makes budget optimisation easier, thereby reducing the likelihood of hasty hiring or layoffs, which can be costly.
- Enhanced Talent Management: With foresight into the skills and roles that will be needed in the future, organisations can better manage their talent pool through targeted development programs and succession planning. In doing so, organisations are better able to identify natural career paths within their organisation which can feed into meaningful career conversations with employees.
- Risk Management: Workforce planning helps reduce risks related to skill shortages, regulatory changes and market evolution by preparing the organisation to adapt through proactive talent development strategies.
- Improved Recruitment Quality: Understanding the skills and workforce capabilities required for future roles allows organisations to refine their recruitment process to attract and retain high-calibre candidates who can drive business success.
Section 3: 7-Step Skills-based Workforce Planning Methodology
Workforce planning is crucial for businesses wanting to grow past a certain size. So how do you get it right? See AbilityMap’s Skills-Based Workforce Planning methodology below.
1. Define Organisational Goals
Begin by clearly defining your organisational goals and strategic objectives. Whether your goal is to expand, diversify, consolidate or maintain, the strategies to achieve your goals will differ as will the skills required to successfully deliver.
Once your short, medium and potentially long-term goals are articulated, define what success looks like and the strategies required to achieve each goal. For example, if the goal is expansion, will that be through increasing market share, entering new regions, acquisition, or innovation?
The skills required to achieve your organisational goals will differ depending on the strategies employed to get there hence this is a crucial step in skills-based workforce planning.
2. Articulate Objectives and Initiatives
With the organisational goals and strategies defined, you can identify the objectives and initiatives required to achieve the organisational goals.
Evaluate each objective to understand the skills, qualifications and experience required to achieve these immediate and longer-term objectives. This alignment ensures that your workforce planning efforts are strategically focused on skills.
3. Analyse Current Workforce Composition
Evaluate the existing workforce to identify its current size, skills and capabilities. Analyse current workforce recruitment and attrition trends (e.g. time to hire, time to productivity, turnover rates etc.) to forecast potential gaps. Use data analytics to understand demographics, skillsets and performance levels. This analysis provides a baseline for future planning.
4. Identify Talent Gaps and Surpluses
Assign responsibility for each business objective and initiative to the relevant departments, teams and individuals with the requisite skills and, through this process, identify any near-term skill gaps.
Compare the current workforce capabilities to future skill needs to identify areas of talent surplus and shortage. This step helps prioritise recruitment, development and redeployment strategies.
5. Forecast Future Workforce Needs
Estimate anticipated changes in the market, industry trends and technological advancements that may impact the skills needed for success in your workforce. Forecast the types and numbers of roles that would be needed to meet future organisational goals within the scenarios.
6. Develop Talent Strategies
Create targeted strategies to address identified skills gaps and surpluses. This may include recruitment plans, upskilling and reskilling initiatives, succession planning, talent redeployment, outsourcing, or contracting.
Re-evaluate the planned timelines of your business objectives in light of your forecast and intended talent strategies to ensure they are aligned to deliver as planned or adjust as needed.
7. Implement Workforce Plans
Execute the developed talent strategies, ensuring ongoing alignment with organisational objectives. Align recruitment and training timelines with the future workforce requirements allowing for ample onboarding, training and time to productivity. Monitor progress and assumptions (such as attrition rates) and make adjustments as needed to stay on track.
8. Evaluate and Iterate
Regularly review the effectiveness of your workforce planning efforts. Use data-driven insights to refine strategies and adapt to changing organisational needs and market conditions.
Establishing this structure through skills based workforce planning enables organisations to undertake scenario modelling as part of their forecasting. This is where you can test out the feasibility of a hypothetical business goal by projecting the future staffing needs and understanding the impact to the employee cost base.
Section 4: Skills-Based Workforce Planning Best Practices
Keep these best practices in mind to keep your workforce planning strategy focusing on skills.
- View as Ongoing: Workforce planning is not a one-time fix. It requires constant monitoring and re-evaluation to be effective. Continually revisit your objectives and change what isn’t working.
- Encourage Collaboration: The key to success in any project is collaboration, and workforce planning is no exception. Work closely with teams and leaders to understand the ebs and flows in their part of the business and use that information to further refine your workforce plans.
- Align with Business Strategy: The workforce plan should be tightly aligned with the overall business strategy. This ensures human skills, qualifications, and interests are appropriately leveraged to deliver business results. It’s your way of ensuring the right skills are developed to meet future business demands.
- Use Data-Driven Insights: Leverage analytics tools to understand workforce skill demographics, role-construction models and capability inventories to forecast current and future needs.
AbilityMap’s toolset provides skill-to-capability balance sheets that provide insight to effectively predict macro and micro skills gaps, informing staffing reallocation and acquisition needs.
- Incorporate Flexibility: The workforce planning process should be adaptable to respond to sudden changes in the market or business strategy and support what-if modelling. This requires embedding reviews and updates within operations to inform any needed modifications to the workforce plan.
- Engage Stakeholders: Involve key stakeholders from various departments to gain insights on current challenges and future needs. This includes leadership, HR, department heads and possibly managers to ensure the plan reflects all aspects of the business.
- Develop Talent Internally: Focus on training and development programs to improve current skills and prepare high-potential employees for future roles, reducing the need for external hiring and disruption.
- Implement Succession Planning: Identify critical roles and high-potential internal candidates and create clear development and succession plans. This ensures continuity in key positions and prepares the organisation for smooth transitions.
- Forecast and Plan Scenarios: Develop scenarios based on different business conditions (e.g., growth, contraction, market entry) to understand potential impacts on workforce needs. This helps in making informed staffing planning, resourcing and hiring decisions.
- Integrate Technological Tools: Utilise advanced tools and technologies – like AbilityMap – to assess role(s) skill requirements and match candidates’ and team members’ capability to perform the skills required for effectiveness. This enhances both the accuracy and efficiency of the recruitment, development and succession processes.
- Continuous Improvement: Regularly assess the effectiveness of workforce planning activities and make adjustments as necessary. Continual learning from past initiatives helps refine future strategies.
- Communicate Transparently: Keep stakeholders – and broader members of the organisation – informed about workforce strategies and changes. Transparent communication enhances buy-in and reduces resistance to change.
Using AbilityMap to Implement Skills-Based Workforce Planning
A proven, scalable, science-led approach is essential for successful implementation. At AbilityMap, our methodology involves three key steps:
1. Increased Productivity
Understand the specific skills and capabilities required for each role within the organisation.
2. Evaluate Talent Pool
Use comprehensive assessment tools to evaluate the capability of potential hires and current employees to perform the skills you need now and in the future.
3. Match and Report
Instantly match your talent pool to roles based on skills, generating easy-to-interpret reports that facilitate informed decision-making.
The AbilityMap Approach
AbilityMap’s capability framework is built on the Australian Employability Skills Framework. It provides an objective and reliable method for skills-based workforce planning that is adaptable and scalable.
Key Features
- Data-Driven Insights: Leveraging data to provide clear, actionable insights into the capability of your workforce to perform the skills you need.
- Immediate, Easy-to-Interpret Reports: Instantly accessible reports that present information in plain English, making them useful for all stakeholders.
- Reduced Bias and Subjectivity: Objective, science-led insights deliver consistency and validity to your recruitment process without the bias and subjectivity of human interpretation.
- Integration with Existing Systems: Seamlessly integrate our tools with your current HR systems for a streamlined process.
- Ongoing Support and Optimisation: Continuous support to optimise your workforce planning strategies and adapt to changing needs.
AbilityMap: Your Workforce Planning Partner
AbillityMap gives you the unique ability to define the skills required for effectiveness in your roles and company culture. It also allows you to produce capability balance sheets identifying your workforce/team’s ability to deliver those skills.
Together, these provide an ongoing view of your organisation’s adaptive capacity and gaps available for strategic consideration of future workforce skill needs.
For a demonstration, or for more information, reach out to the AbilityMap team:
1800 422 454 | sales@abilitymap.com
