5 Key Elements Of Workforce Planning in 2023

What is workforce planning?

Workforce planning is a strategic tool used to analyze and monitor the current workforce and calculate efficient changes which would benefit the future of a business. This could be completed in a range of ways, such as focusing on identifying current employee knowledge and talent to determine any key skills gaps.

Assessing and managing employee performances, it can highlight where employees need support either with additional resources or staffing.

There are many factors to consider within workforce planning including business growth, skill-base and company long-term goals. Workforce planning is a cost-efficient and productive approach to managing the goals of the entire business.

Why is it important?

Workforce planning is important because it supports the future growth of a company. It helps to create a plan for reaching goals by using data formed within the current workplace. This could be by identifying skill gaps or identifying additional staff or resources which are needed.

By workforce planning, companies could target essential areas to increase staff productivity, well-being and focus on reducing employee turnover.

HR should work closely with other teams such as finance and corporate, to ensure all of their requirements align. Refining the requirements for new staff could offer challenges for HR such as implementing a perspective shift within current managers, pressure on leadership and a narrow pool of options.

1. Think ahead

Proactivity is essential in business. Anticipating shifts both within and outside the company, strategizing the growth and development of the business and preparing to lead a team through upcoming changes are all key skills to leading a successful organization.

Workforce planning makes preparing for the future a more convenient task, however, with constant changes within industries this can become more challenging. By focusing on the current workforce’s gaps and needs, HR can anticipate possible changes within the company as well as the industry, resulting in an opportunity for succession planning.

Efficient succession planning identifies workers who have the leadership potential and allows staff to be supported within their professional development. This has an impact on staff mentality, increasing engagement and positivity.

Over time, technology, software and requirements change, resulting in a direct impact on the workplace’s needs. By workforce planning and anticipating the potential of your current staff, companies and organizations will have an advantage.

Larger changes may require alternate plans, however, with a clear structure, successful leadership and flexibility, workforce planning should increase the ease and speed to lay out a new efficient plan. Observing and adapting as needed is a key part of workforce planning.

2. The skills gap

For each role the skill requirements will differ, however, all roles need a range of both hard and soft skills. Hard skills are unique to the role, such as being able to navigate specific software or hardware. A web designer may be expected to be able to use a specific graphic design program or SEO software chosen by the company. These skills can require practical proof or a qualification to prove the level of competency.

Soft skills are personality traits also known as human skills. These could include collaboration, punctuality or communication skills. These are more difficult to prove than hard skills. These skills are essential as they are hard to teach and contribute to a successful workplace environment either in an office or online.

Closing the skill gaps within current workforces can be done by offering upskilling opportunities to the team. Offering individuals or groups training through development courses either offered face to face or online will contribute to closing the skill gap.

3. Changing demographics

Another focus within workforce planning is considering the current and future demographics of the company and how these may change. Understanding data such as age, race and gender can encourage equality throughout.

If the average age of staff is over 60, the company may choose to look for new staff who already hold the skills they want to incorporate, instead of investing money on upskilling a group of people who are planning on retiring in the next few years. It is more beneficial to support younger staff build up to supervisory positions within the company.

As the world evolves, businesses are shifting from primarily men to a more even balance of gender. By using workforce planning it can be ensured that there is no bias within who is benefiting from promotions. This can be applied to gender, race, age and a range of other factors.

4. Technology advances

Technology is always changing, offering new forms of communication, approaches and devices for the workplace. This can support a business significantly if staff and resources are up to date and aware of the benefits.

Workforce planning can be used to identify new technology which would support the company and use that data to offer upskilling opportunities to current staff. It could also act as a skill requirement for vacancies to increase the company’s overall skill set.

Many companies have begun using video-conferencing software since the 2020 lockdown, offering staff the option of remote or hybrid work. Companies also have increased their use of social media to increase their marketing options to target a range of audiences.

New technology can help implement workforce planning by creating performance reviews, employee feedback options and monitoring upcoming changes. It also allows HR to remain up to date on available software and ensure that staff have the best options when completing their role.

5. Financial planning

Financial planning is a crucial part of workforce planning as HR must understand how much money there is to invest in the company to improve the current workforce and manage the ongoing budget.

Companies must be cost-efficient and understand if the changes they want to implement are cost-effective. Understanding the budget would produce options on the best way of moving forward; hiring a new member of staff with the required knowledge or sending a current member of staff on a development course.

To ensure financial planning is implemented efficiently, HR and the finance team should work together to sufficiently allocate resources, programs and leadership within the company's limits, supporting and focusing on their ROI.

The cost of labor is the majority of a company’s spending. So, through workforce planning, HR professionals can organize and prioritize current talents and identify their value to guarantee the most cost-efficient results.