Long-term strategizing may have fallen by the wayside over the last few disrupted years but it is still possible to do and has countless benefits for the people function.
Despite difficulties in long-term planning, HR cannot forego having a talent and skills strategy that is both adaptable and aligns with business goals.
In fact, by engaging in workforce planning the function can boost everything from HR’s profile to its own performance.
The pandemic changed everything to do with workforce planning.
Traditionally, this core business process would have allowed HR to align people strategy with overarching organizational aims and needs in order to meet long-term business goals.
However, COVID-19, fast-paced and ongoing digital disruption, talent marketplace volatility, and political and economic uncertainty the world over have made this more difficult. So much so that a recent Gartner study found that 77% of senior business leaders said they feel poorly prepared for the future. Hardly an indicator of great workforce planning in action.
Yet, dynamic workforce planning is possible to create. And, it can be adaptable to changing organizational needs and VUCA (volatile, uncertain, complex, and ambiguous) talent and business landscapes; reflexively making those organizations that engage in workforce planning more adaptable and value-creating.
Indeed, as Annika Jessen, senior principal HR at Gartner told UNLEASH, it is the changeable nature of everything from technology to employee demands over the last few years that has likely reinforced to senior HR practitioners the importance of workforce planning.
She said: “As a result, businesses have been awakened to the need for strategic workforce planning, a process which involves analyzing the skills, technologies, and employment models available across the organization, and evaluating them against the goals of the company.”
But why do senior HR leaders love workforce planning so much? Read on to find out more.
Hardly any leaders in the world of HR and business disagree that the world going forward won’t be one of high disruption.
Indeed, 64% of executives surveyed for Deloitte’s latest Human Capital Trends report said they need to be able to deal with multiple, unlikely high-impact events going forward, compared to just 29% pre-pandemic.
With everything expected to be more changeable, organizational agility is largely lauded as one way to manage this. Indeed, as an article in Business Innovation Brief stated: “An innovative and agile organization is able to change, adapt, and constantly introduce new and improved products, services, and processes.” In short: agile is a good thing as it means the business can adapt to change.
And while there are many different factors involved in becoming truly agile — customer obsession, talent density, networked organization, and focussed teams amongst them — Gartner’s Jessen explains that workforce planning can also play a starring role in creating much-needed organizational agility.
She explained: “Workforce planning can help companies become more agile in an ever complex and dynamic skills environment.
“And leaders can use workforce planning to effectively align talent supply and demand to various business scenarios.”
Top stuff.
There are no two ways about it: it is still a talent-tight marketplace. Monster’s recent Future of Work study found that 58% of organizations are struggling to find the right candidates with almost three in 10 saying the skills gap has increased since 2021.
And it doesn’t look like this scenario will get any easier. LinkedIn’s latest figures show that by 2025 the skills employees need to do a job will change by 41%. However, workforce planning done right, according to the CIPD, can help here.
Suppose organizations can generate information about the skills they need, and analyze it to inform future people and skills demands. In that case, they can then translate this into actions that can help develop and build on their existing workforce.
To do this successfully, the CIPD (chartered institute of personnel development) advises linking workforce planning to business needs, understanding how it affects talent management strategy (from development to acquisition), including all business functions and being effective at communication during the planning stages, and having good data gathering capabilities. Everything that should work to benefit HR and the talent strategy.
In PwC’s most recent Annual Global CEO survey over 70% of CEOs said the availability of key skills was a key threat to their companies.
Yet, worryingly for HR, a separate Harvard Business Review report found that workforce planning is often (44% of the time) led by finance teams. This is despite the majority of business leaders citing that their current sub-par workforce planning is leading to talent shortfalls and missed business objectives and, perhaps obviously, this setup does not allow HR oversight over a key area of talent management.
However, it means there is an opportunity for HR. There is a huge appetite from the business for better workforce plans, with 72%, according to Harvard statistics, wanting to be able to create improved staffing strategies with only 22% being able to do so right now.
As over half of respondents to the Harvard study said they need better data on what talent profiles they need going forward, and 57% said they need better insight on how their acquisition and retention rates are impacting business, HR, as the function that oversees this area, can step up and show its importance by planning alongside the business in this area.
In such a way, building on the profile it earned over the course of the pandemic and showcasing that it was a business-leading and strategic function.
Lattice’s 2023 State of People Strategy found the three most commonly used metrics that HR is assessed on by executive teams are voluntary turnover, involuntary turnover, and performance reviews. However, the state of HR performance against these metrics is mixed. Only 10% of HR departments say they are exceeding goals and over half of the HR teams are missing at least some targets. Is this where better workforce planning might help?
With HR leaders saying that they are prioritizing retention, engagement, and development over other areas going forward, it is clear that 2023 HR focus areas intersect with what good workforce planning would also consider.
As laid out in this UNLEASH article, strategic workforce planning from HR can then deliver reassurance to the business and allows better proactive planning from HR, potentially allowing it a better shot at hitting the core metrics it is being measured against.
Indeed, the best HR functions are now strategizing for the future by linking everything from organizational values to talent and business needs, constantly assessing and reassessing what the business goals are and how to help it hit them with a talent and skills plan.
In fact, people functions that flourished during the pandemic were the ones that drove resilience and created value by linking the talent and business strategies and identifying where HR strategy could be agile and benefit the business as disruption occurred. Excellent workforce planning in action.
Looking for more insight into capacity and workforce planning? Apply for our upcoming capacity planning roundtable here.
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Multiple award-winning journalist, editor and content strategist
Dan is an award-winning HR journalist and editor with over five years experience in the HR space.
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