Strategic Workforce Planning: Why Is It So Important For Your Business?
What’s next for your team?
If all you have is a nervous laugh and an “I don’t know,” keep reading.
The current labor market is extremely tight, and customer demand is all over the place. Trying to do more with less, while retaining employees, is turning into the standard operating procedure. If you’re reading this, you’re in charge of managing your workforce in some way. Maybe it’s hiring. Maybe it’s labor forecasting. Maybe it’s matching customer demand with workforce supply.
Workforce planning is about analyzing historical data and making the best decisions for right now and the future. It helps you see what’s coming, and informs you on whether what you have today is enough for what you’ll need tomorrow.
If you’re using the crystal ball approach and winging it when it comes to your workforce, making mostly-blind decisions and hoping for the best, we wanted to let you know that you’re about to run out of track ahead. And even if you think your workforce planning is in good shape, there’s always time for a review and tune-up.
Overall success in your organization depends on strategic workforce planning. We’re going to show you what good workforce planning looks like, how it affects your business, and how to get started doing things the right way.
Workforce planning in action
Workforce planning can be understood as simply being sure the right person is working the right job at the moment in question.
In other words, you avoid:
- Overstaffing: too many people, too little demand
- Understaffing: too few people, too much demand
- Wrong-staffing: employee skill and job mismatch
Unlike operational workforce planning, which takes a short-term, day-by-day approach, strategic workforce planning takes the long-view and forecasts a plan for the future. That seems complicated, but at its most basic, workforce planning in general is about knowing customer demand and employee capability now, and down the road.
A straight-A approach to workforce planning means you’ll:
- Assemble the right team and tools, which might include HR, shift managers, and any other leader involved in strategy.
- Analyze your workforce, your customers, and industry trends.
- Attract new talent that fits the conclusion you’ve drawn from your analysis.
- Assign the right talent to the right jobs and shifts. This includes assigning the right people to monitor data and the workforce plan you’ve enacted.
Both strategic and operational workforce planning are an ongoing process.
The goal is to be fluid and be aware of what’s happening, what’s coming, and what you’ll need when it comes to the impact on your workforce. Anything that affects or puts demand on your employees (current and future) has to be considered.
To create a workforce planning process, start with a few questions with your workforce in mind:
- What gaps does your organization currently have?
- What’s your goal?
- What’s keeping you from reaching it?
- What near and future trends will have an impact?
- What’s your solution to bridge the gaps and meet the goal?
Let’s say you were running a small bakery.
You want to be known for a high-quality product that customers can’t get anywhere else. Problem is, you’re having a hard time finding employees who have the necessary baking and pastry chef skills. Demand is more than your current staff output. You can see that finding skilled employees is only going to become more difficult.
You see you have a skills gap, and may need to adjust your menu and how you schedule the day to account for peak demand times and product availability. That means you’re going to need to build in a training program for new employees with additional benefits to retain those workers once they’re trained.
You also see that hiring workers specifically to work the counter keeps your bakers and chefs from getting burned out by customer contact. While it was tempting to take a more all-purpose approach so you could hire fewer employees, protecting your skilled staff and reducing any frustration that might cause them to leave is critical.
It’s clear you need better tools to keep tabs on customer demand and employee schedules so you can fine-tune your shifts for maximum efficiency.
How proper workforce planning impacts your business
If workforce planning sounds like a pain, and you’re tempted to just trudge along day by day, you should know the impact that has on your business.
Without workforce planning, you’ll:
- Never reach your goals. All goals are reached through carefully planned action, not by happy accident.
- Have low employee engagement. Disengaged employees are expensive, whether they’ve disengaged because unskilled employees put a burden on others, or they become frustrated because they’re poorly trained for their own job.
- Have high turnover. Disengaged employees and a team with skills gaps and mismatches will quit, sooner or later.
- Fail to build future leadership. Your best leaders come out of your experienced employees, but poor workforce planning will create a leadership gap down the road.
- See low productivity and higher costs. Employee engagement and productivity go hand-in-hand. Bad planning ultimately leads to less productivity.
- Use the wrong tools. Planning requires data, and it’ll drive you to use better employee scheduling and management tools to get that data both for operational and strategic workforce planning.
Thriving businesses aren’t by accident. They are carefully planned.
How to get started
We assume you have a goal for your business, that you know where you want to go. That’s your true starting point.
With that in mind, you’re going to run through the five process questions in greater detail. Planning is always done to support a goal.
Step 1: Find the gaps
Think of your current workforce as the supply, which must meet customer demand and upcoming changes. You’re going to look for the gaps that will keep you from meeting your goal.
Here’s an example of some of the questions you might ask to ferret out those gaps:
- What skill sets and talent do you have on staff? What are you missing? What do you have too much of?
- Are there any demographic issues with your workforce? For example, is everyone in your workforce the same age and will retire at the same time? Is a large percentage of your employees in college and have tricky class schedules? Are you out of compliance with federal or state law in regards to protected classes?
- Does your current workforce have the necessary training to meet changes in product, expectation, or enhanced roles?
- What trends, technology, or customer demand changes will impact your business, and what would that mean for your employees?
- How will you attract new employees to fill the gaps?
- How will you retain current employees to avoid creating gaps?
Step 2: Create solutions
Solutions are strategies, methods to build bridges across gaps. You’ve identified the canyon. Now you have to figure out how you’ll build a bridge across it.
Let’s look at a few examples of potential gaps and solutions.
- Talent gap: Poor quality product, lackluster service, or general chaos in a shift indicates a talent gap. Better training, targeted recruiting, increased benefits to retain trained employees and attract top talent, and outsourcing some tasks might help.
- Scheduling gap: Poor customer service, lower sales, product waste, and high employee turnover can hide what’s actually a scheduling problem.
- Staffing gap: Overtime and burnout can be a scheduling problem. It can also indicate a need for temporary, seasonal, or part-time staff.
- Flexibility gap: Rigid processes and employee schedules prevent your business from growth and handling oncoming change. Fix it with flexible self scheduling, more automation for customer self service, and tools built to adapt.
Each business is unique and of course, not all solutions are created equal. You’ll want to analyze your solutions with the rest of your leadership team to make sure it actually solves the problem (not just the symptom) and gets you to the goal instead of being sidetracked.
Step 3: Use the right tools
Getting started with strategic workforce planning doesn’t have to be difficult, but it can’t rely on guesswork. You need input from HR and your managers…and you need actual data.
Not sure where to get that data? Not sure how to enact those solutions? Pretty sure the tools you have to manage employees now aren’t going to cut it?
It’d be a shame to miss your goals because you weren’t using the right employee scheduling and workforce management tools. When I Work is built on the idea that empowering your workforce creates engaged employees, and that workforce planning happens when real-world and all-encompassing employee management generates real-time data that helps you manage for today and for next year.
We’re confident When I Work is the right tool for you. Sign up for a 14-day free trial to see the kind of data and planning that comes from seamless and flexible employee management.