Workforce planning as business planning
Skills-based workforce planning goes hand in hand with business strategy. You won’t achieve your long-term objectives if you don’t have the right resources. That’s why workforce planning is an essential part of any business plan.
Benefits of workforce planning
- Risk mitigation: Proper planning makes each employee as effective as possible, reducing the chance of a bad hire. As part of the interventions developed off the back of your identified talent gaps, you can mitigate risks associated with inefficient training and other issues that appear.
- Cost optimisation: The cost of a bad hire can be up to 2.5x the employee’s annual salary, and isn’t just poor performance in a role that makes a hire problematic. Hiring the right person at the wrong time can be just as detrimental to business goals, but workforce planning streamlines this process and enables you to accurately predict who will be needed, where and when.
- Higher retention and satisfaction: Workforce planning makes teams work better together and increases employee engagement. When individuals feel valued, they are motivated to produce their best work. This reduces employee turnover and contributes further to your mitigated people costs.
- Higher productivity: An effective workforce planning strategy can increase productivity. By carefully calculating how many team members are needed for each project, employees are less likely to be over- or under-worked. It also helps attribute team members to tasks relevant to their skills.
- Business success: Aligning your people strategy with your business strategy keeps employees and executives working towards the same goals.
Skills-based Workforce Planning Framework
Workforce planning takes a skills gap analysis to the next level. But how do you do it?
The 5 core workforce planning steps
Each organisation has a different workforce planning process, but most will follow a similar flow. Use these 5 core steps as a base to develop your own framework.
1. Define objectives and leverage scenario analysis
You want to ensure your goals align with the business’s strategic objectives, so assign your first session as a goal-setting workshop. This will ensure the following steps accurately steer your business towards achieving these goals.
2. Analyse the current formation of the workforce
The next step is to get a picture of the skills in your existing workforce. Once you have a full picture of where you are, you can forecast future staffing requirements. This information also acts as a base against which to identify future concerns surrounding workforce demand vs. business objectives.
Getting employees to take a psychometric test to evaluate their inherent capabilities and interests is invaluable during this step.
To get this data, collect insights on:
- Employee demographics
- Market and industry intelligence
- Employee skills
- In demand skills
- Employee potential
- Employee turnover data
- Workforce supply
- Employee engagement
- Staffing costs
- Critical roles in your organisation
- Market changes
3. Discover future workforce gaps
With a clear picture of the organisation’s goals to meet its strategic objectives, and the resources available to deliver those goals, the next step involves figuring out whether or not you have enough people to complete the work necessary in the timeframes you have in mind. Hiring more people may be critical to the timely delivery of projects, milestones or goals, but more important is hiring enough people with the right skills at the right time.
The true insights come from analysing your workforce forecast to identify skills gaps. Is your current workforce capable of evolving with future business needs? Or are new skills needed to meet those needs?
A key component of the forecasting stage is scenario planning. This process involves encouraging key stakeholders to consider scenarios likely to affect the organisation in the future. This activity builds on forecasting by adding nuance and qualitative, business- and industry-specific information.
4. Develop interventions to address gaps
Once you have identified the skills your organisation lacks, you can assess how to bridge the gaps. Examples of interventions include training current employees, reskilling key roles, hiring, succession plans, new technology purchases and business process overhaul. Organisations may even need to consider revising strategic priorities based on the significance of gaps in their workforce.
5. Implement and adjust changes
When implementing your changes, you need to consider all stakeholders and employees. To mitigate resistance to change, focus on the positive outcomes your workforce planning process will achieve.
HR leaders should involve the Finance team from the start of the workforce planning process, so they understand the business case, methodology and interventions thoroughly.
As your business evolves, you may want to adjust your strategy. A thorough analysis will guide you on what has worked and what needs changing.
Sample Framework: APSC’s Workforce Planning Model
The Australian Public Service Commission (APSC) has its own model for workforce planning, tailored to the unique needs and challenges of the public sector in Australia. This model ensures the APSC has the people with the right skills at the right time to deliver government policies and programmes effectively.
Here are the key steps in the APSC’s workforce planning model:
1. Environmental Scanning
- External Analysis: Understanding external factors such as economic, technological and demographic trends that could impact the workforce.
- Internal Analysis: To understand current workforce strengths and weaknesses, assess internal capabilities, structures and culture.
2. Workforce Analysis
- Current Workforce Profile: Examining the existing workforce’s composition, skills, experience and demographics.
- Future Workforce Requirements: Forecasting future needs based on strategic objectives, policy directions and anticipated changes in the external and internal environments.
- Gap Analysis: Identifying discrepancies between current workforce capabilities and future needs.
3. Strategy Development
- Strategic Responses: Developing targeted strategies to address identified gaps. This might involve reviewing your technology strategy, including recruitment tools, or developing other talent strategies for training and development, workforce reshaping or succession planning.
- Action Planning: Creating a detailed plan that outlines specific actions, timelines and responsibilities.
4. Implementation
- Executing the Plan: Implementing the strategies and actions as per the plan.
- Change Management: Managing organisational changes effectively, ensuring buy-in from staff and stakeholders.
5. Monitoring and Review
- Regular Assessment: Continuously monitoring the effectiveness of the workforce plan against performance metrics and objectives.
- Adaptation and Revision: Being prepared to revise and adapt the plan in response to new information, changing circumstances and feedback.
The APSC’s approach to workforce planning emphasises adaptability and responsiveness to internal organisational needs and external environmental changes. This approach helps to ensure that the APS remains agile and capable of delivering high-quality services to the Australian public. The model also stresses the importance of continuous review and adjustment, recognising that workforce planning is an ongoing process rather than a one-time activity.
Further guidance on workforce planning
Workforce planning for small businesses
Small businesses have more pressure than ever to make the right hires. With fewer people on your team, each person’s impact is more profound. It’s therefore in your best interest to take a skills-based approach to workforce planning if your organisation employs 20 people or fewer.
For more information on the small business hiring process, check out our Small Business Hiring Toolkit.
Jobs Queensland has a suite of workforce planning resources available online. These are geared towards micro to small businesses, but you can use them as a baseline for any size organisation if you don’t have internal documents already. Access Jobs Queensland Workforce Planning Connect Resources here.
Interventions 101: strategic recruitment and employee development
If your workforce planning identifies a lack of necessary talent, you need to support staff in gaining the skills that will align them with the future goals of your business strategy. For employees with a great culture fit, training and development are optimal. But, sometimes it’s more cost-effective to hire a new employee with the knowledge needed to hit the ground running in your role.
Likewise, if you don’t have the right people ready to replace those in leadership roles, you need to create a succession plan.
Reskilling challenges include:
- Time: how long it takes to develop a skill
- Cost: the costs associated with training and reduced productivity during training
- Discomfort: your employee may not be comfortable taking on new skills
- Confusion: without effective communication, employees may fear job loss or question how relevant the new skills are for them
Agile workforce planning
Agile teams take a customer-focused, collaborative approach that relies on short-lived sprints and constant iteration. Agile methodology can be applied to any project, but in workforce planning it is the continuous analysis of the workforce and implementation of interventions to keep up with a changing organisation.
The Academy to Innovate HR says Agile workforce planning should look at the following evaluation criteria when assessing employee capability:
- Skills
- Knowledge
- Accreditation
- Mindset
- Physiology
- Environment
Skils-based workforce planning with AbilityMap
AbilityMap’s data-driven solution makes it easy to identify the skills required for success in your organisation. Then, it finds the candidates with the innate capabilities to perform those skills. These science-backed insights allow you to implement talent development initiatives, create a succession plan, or otherwise address skill gaps that appear in your workforce.
With detailed insight into each candidate and role, you can align your workforce planning with business goals, predict future demand, identify business leaders, and proactively adapt your workforce to suit.
To find out more about how AbilityMap can give your business a competitive advantage in workforce planning, book a demo with one of the team.
