This past week I presented to a group of clients and colleagues an interactive session on workforce planning as part of Workforce Twenty20 – a series of small business training that will be delivered over the next 12 months.
One of the first few matters of concern to small business owners and managers is what is it exactly and why invest the time in workforce planning. What are the benefits? What is the actual business case?
What is workforce planning?
Workforce planning is a business-driven and business-owned process. It’s about knowing and analysing your business and using this knowledge to position your business’s workforce to best deliver your business outcomes and manage workforce-related risks. Its about strengths and weaknesses and strategy – and a raft of factors!
What are the benefits of workforce planning?
Workforce planning is a business planning tool that improves your knowledge of your organisation’s business and funding framework to position your workforce to best deliver your business outcomes and manage workforce-related risks. The benefits are clear and can include:
Businesses that integrate workforce planning into their strategic business and financial planning become forward looking with increased opportunities to successfully achieve desired business outcomes
Financial (value for money)— the ability to reduce costs of operations and transactions associated with delivering products and services to the market by securing and retaining needed capabilities and talent and implementing arrangements for cost efficiencies.
Increasing the capacity to respond to future and changing customer demands and provide business continuity during the interim
Minimise the limitations on business and subsequent business risks and insecurities of inadequate business resources by developing an appropriately qualified, trained and skilled workforce
Improved decision-making—the ability to make business and investment decisions that take into account the workforce capacity and capability required to deliver successful outcomes – plus business plans and goals.
Risks of ignoring workforce planning
Workforce risks may manifest in different shapes and forms within an organisation and are highly dependent on the agency or department’s business, internal demographics and the locations where business is being delivered.
Effective workforce planning identifies the HR strategies required to mitigate workforce risks and deliver optimum business outcomes within available financial resources. See below details of potential risks and consequences for businesses regarding workforce planning.
Skills shortages in identified occupational groups
Competitive labour market
Tight fiscal conditions
Increasing customer demands on business
Consequences for business
Weaknesses in organisational capability and operational performance
Talent and experience deficits
Increased exposure to work risk profile for some industries
Business talent shortages and increased costs to attract and retain talent
Need to provide a more sophisticated employee value proposition using more than remuneration
Need to link workforce planning to business and financial planning for future agility
What are the key processes?
Workforce planning is a process of identifying the workforce capacity and capability your organisation needs to meet its objectives, now and into the future. Key question here is – does your staff meet business needs now? Will staff meet your future business needs?
It aims to ensure that the right people—those with the skills and capabilities necessary for the work—are available in the right numbers, in the right employment types, in the right place and at the right time to deliver optimal business outcomes. (Focusing on the number of employees alone does not tell you about your organisation’s ability to achieve its organisational goals and outcomes).
To create the ideal result the following questions, need to be answered:
What will the future workforce demands be?
What outcomes does your organisation need to deliver now and over the next one, two, three and four-plus years?
What does your organisation currently ‘own’ in terms of employee numbers, skills and capabilities ()?
What are the forecast workforce capacity and capability shortages based on your current workforce profile?
What is availability of the job roles, skills and capabilities in the wider labour market?
What are the gaps for your business now and into the future?
How can you close the gaps by using your employees differently, training and development programs or by building partnerships with other businesses?
If you need support to conduct effective workforce planning for your business success for today and tomorrow, please give me a call.