WHAT IT'S ALL ABOUT...
People are an organisation’s biggest asset. Workforce planning is all about aligning your people strategy with your evolving organisational needs.
It’s all about creating a plan that ensures your organisation has the right people, with the right skills at the right time. It looks at where you currently are versus where you want to be and shows you what you need to do to bridge the gap.
This could involve everything from questioning the work that should be done in-house and the work that needs to be outsourced; to striking the balance between full-time and part-time employees. It could be addressing the growing question of which tasks are more effectively performed using Robotic Process Automation (RPA), or questioning where the work should be performed to experience the biggest opportunities.
In a nutshell, good workforce planning is about bringing you closer to reaching your goals.
There are still blurred lines when it comes to the question of who’s responsible when it comes to workforce planning.
For some organisations, HR own this process because of their obvious link to all things people in the business.
Others may hand this responsibility over to the Organisational Development team if they have one in place, whilst large organisations may have a specific team solely dedicated to workforce planning.
One person who is increasingly being viewed as a key player in overseeing the workforce planning strategy is the CFO. People costs make up such a large proportion of workforce planning, so it makes sense for the CFO to have eyes on this from the start.
The CFO will act as a credible voice when it comes to:
- Determining what investment will be required to implement the selected workforce plan
- Fully understanding the impact of changes in employee numbers on operating expenses
- Defining critical roles and the organisational structure
- Recognising the impact of various workforce scenarios on product and service margins
As we’ve touched on so far, people are what make an organisation what it is. Simply put, no people = no business.
That’s why any business strategy that fails to consider how the workforce will be organised and distributed is deeply flawed.
Workforce planning should be something that every organisation constantly does, but even more emphasis should be placed on this in times of change such as an acquisition or merger, or in the lead up to the dreaded “B” word.
Despite this, effective workforce planning often goes neglected, but research suggests that this is becoming more important than ever…
The cost of owning a workforce is rising quicker than the budgets available to support it. Organisations are being forced to learn how to increasingly generate more value with fewer resources. As a result, an organisations’ biggest cost – the workforce, needs to be optimised.
A recent study by McKinsey revealed that more than one-third of global executives said their organisations are unprepared to address the skill gaps they anticipate. Whilst 60% expect that up to half of their organisation’s workforce will need retraining or replacing within five years.
Workforce planning works to reveal obstacles that will crop up in the future and show organisations what they can do to mitigate risk and spot opportunities for growth.
When it comes to the specific approach to workforce planning, there are a few different ways to go about it.
Many organisations rely on spreadsheets, manually inputting data into Excel documents and using this to draw conclusions.
The problem is, this type of approach can be incredibly time-consuming and only provides limited insights. On top of this, like with any manual process, there’s the risk of human error, which can lead to inaccurate data.
On the other side of the coin is specialist workforce planning software like IBM Planning Analytics, which harness the power of analytics to automate the process and deliver fast, accurate insights. This type of approach is quickly becoming the gold-standard when it comes to workforce planning, and here’s why…
- Faster insights
- More time to spend on higher-value tasks
- More accurate decision-making
- Real-time analysis
- Ability to model “what-if” scenarios before committing to a decision
- Better ability to match spend to resource
- Better cost savings over time
Predict future workforce needs – Identify possible future scenarios and use workforce planning to understand what this will mean for your workforce.
Understand gaps in the workforce – Use workforce planning to show you where skills are missing, as well as determining when you’ll need these capabilities and how long it will take you to obtain them.
Reduce costs – Identify where you’re making unnecessary spendings and take action to reduce costs.
Improve productivity and quality of work – Determine where time is being wasted and boost productivity by taking measures like adopting new technology or outsourcing repetitive work.
Create employee reward initiatives – Effective workforce planning will help you to understand how to reward employees in a way that keeps both them and your budget happy.
Get the balance between different types of employees – Determine the perfect ratio of full-time employees, remote workers, contractors and freelancers for success.
Recruit with confidence – Recruiting can be a tedious process often left to intuition. Workforce planning will show you how hiring new people will impact your organisation’s overall vision.
Easily adapt to change – Having a clear understanding of what is going on in your workforce allows you to seamlessly adapt to any changes in the short or long-term.
To help you to get the most out of your workforce planning, we’ve created an exclusive e-book.
Oletta Stewart is a Content Writer for MHR Analytics.
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