Research shows that companies which strategically recruit a diverse workforce, are 15%-35% more likely to have better financial returns compared to companies that don’t have such a diverse workforce.
But often, companies don’t know how to plan for their workforce needs, and they fail to see how their future employees will impact the company’s goals and objectives.
What is strategic workforce planning?
The hiring process of a company affects the business in the long term. The person you hire today as an entry-level employee, may one day become the CEO. Even a mid-level or C-suite hire may stay on board for years and affect the direction the company heads in. Therefore it’s very important to choose applicants who can have a long-term positive impact on the company.
Strategic workforce planning is the process of making smart hiring decisions that ensure your firm has the right people with the right skillsets at the right time. Here, you hire people with the skills, competencies, and job-fit for the future.
Steps to strategically plan your workforce requirements
1. Evaluate the mission, vision, and objectives of your company
Strategic workforce planning involves hiring by looking towards the future. The desired future for your company is determined by your corporate objectives, mission and vision.
So, before you begin your workforce planning, consult with your departmental heads and C-suite executives to understand their plans for the company’s future. Find out what the company wishes to achieve and where it sees itself in the next decade or two. Find out what each leader/manager considers to be the obstacle for goal achievement. Then start building the profile of the ideal candidate who can help your company overcome these obstacles and reach these goals.
You should do this for each job role and identify how each role contributes to the achievement of the mission and vision.
2. Identify the KSA and competency gaps in your existing workforce
It’s essential to conduct an exhaustive analysis of your current workforce before you plan for a new one. This will prevent your duplicating the KSAs and competencies that already exist in the company.
You can implement workforce analysis by:
- Administering job skills tests and simulations
- Asking for self-administered feedback
- Seeking team reviews about each team/member
- Contacting customers and other external stakeholders for feedback
This type of workforce analysis will tell you about the quality of your existing staff and the potential they have in-store. You will also be able to identify any skills and competency gaps in the workforce and determine if re-training or replacement hiring is the right solution to plug-in these gaps.
In addition to understanding the current skills gap, forecast the competency gap you may have in the future. For this, you need to first consider how you’re planning to plug-in the existing skills gap. Then you need to understand how the needs of your industry or job role will change in the future. That way, you can get some idea about the type of skills that will be necessary, say 5 or 10 years down the line. For example, there was a time when cashiers at retail stores needed to have excellent calculation or accounting skills. But today’s cashiers need great technical skills to run the machines that do the calculation/accounting.
Additionally, when hiring a candidate, you should check whether they possess the characteristics of a leader or manager. After all, they may one day be at the helm of the company.
3. Consult stakeholders for their inputs
When it comes to hiring stakeholders, there are two groups of people who will be affected by the new hire. The first is the internal stakeholders – departmental heads, line managers, project managers, hiring managers, team leads and other employees. The second is the external stakeholders – customers, suppliers, logistics partners, banking partners, manufacturers, external agencies, consultants, government, etc.
During strategic workforce planning, you must consider how stakeholders affect the role you’re currently hiring. How closely will the new hire engage with the stakeholder? Will there be any direct impact on his/her performance or the completion of the task/project? What expectations does this stakeholder have from the new hire?
It’s important to consult with all relevant stakeholders and discuss these questions with them. You will have to clearly define the right channels of communication & feedback between the role and the stakeholder to ensure smooth operations.
4. Automate your hiring processes
According to a study on recruitment automation, 67% of the respondents believed AI-enabled technology could save time during hiring, 43% believed that AI automation could reduce recruiter bias, 31% felt that AI technology could improve hiring accuracy and 30% of the respondents felt that AI automation can save a lot of money during hiring.
So, before implementing your strategic workforce plans, put in place effective AI or predictive analytics tools that can make your recruitment & hiring process faster and more effective.
The Talenx.io predictive talent management software, in particular, can boost your strategic workforce planning process. The tool provides in-depth candidate job-fit reports concerning the role, the group, and the team, which you can use to select the ideal person for the job. It is powered by over a century’s study into personality science, which makes the reports extremely accurate.
5. Overhaul your existing HR policies & programs
Companies have outdated HR policies, practices and programs that don’t support strategic workforce planning endeavours. The only way your workforce planning strategies will yield positive results is when the existing HR frameworks change.
The best way to transform your HR policies & programs is to consult the people who are directly impacted by them. Bring up the issues during your corporate meetings or organize an idea exchange event where employees and executives can share their ideas with you. If you need more help, you always have the option of consulting an external specialist.
This process of overhauling your HR policies & programs must start ages before strategic workforce planning since change doesn’t happen overnight.
6. Hire according to company culture
A total 91% of managers believe that a candidate’s cultural alignment with the company is more important than his/her competencies. Conversely, employees who don’t find a culture-fit with their workplace are 24% more likely to quit within months of coming onboard.
Whichever way you look at it, company culture is immensely impactful on the quality of your hire and their experience while in the company. You can’t expect to run your strategic workforce plans successfully without considering company culture.
When hiring, you should not only consider the current cultural-fit of the candidate, but also the flexibility and alignment he/she should have as the company’s culture evolves.
7. Monitor and modify your strategic workforce planning process as needed
Once you’ve developed your strategic workforce plans and implemented them, you need to keep track of how they’re performing constantly — making notes of the successes and identifying causes of failures by putting technology to good use. These days, there are software which give you the tools to analyze the quality of your hiring strategies, while workforce planning, recruitment, hiring and onboarding are in progress. You can make the amendments to the strategies as necessary, in time for the next hiring cycle.
Benefits of strategic workforce planning for your company
Strategic workforce planning can be an exceptionally long, expensive and tedious process. But it’s worth putting in the effort, given the myriad of benefits it offers:
- It can help your company achieve its short & long-term goals
With strategic workforce planning, you consciously choose people for their specific skills and abilities. This process can help you create the profile of the ideal candidate, allowing you to implement recruitment programs that are designed to help you meet your short & long-term goals.
- It can help you acquire absent skills
It is only when your employees have the competencies needed to tackle the challenging and changing marketplace, that your company survives. Strategic workforce planning can fill in any knowledge or experience gaps that exist in your workplace to ensure it doesn’t just survive but thrive.
- It can help you allocate human resources the right way
As your company grows, the nature and complexity of projects changes. When planning for your workforce strategically, you can determine the needs of individual departments & teams. You will be able to acquire the right talent in time and match the new hires with teams based on their bespoke requirements.
- It can reduce corporate expenses
Studies show that the cost of replacing an employee can amount to:
- 16% of the annual salary of low-paying jobs.
- 20% of the annual salary of mid-pay-range positions.
- 213% of the annual salary of C-Suite and highly-educated staff.
Often, people leave their jobs because they are a poor fit for the work they do. But when you plan your workforce strategically, you get your hiring right the first time, reduce attrition rates and limit re-hiring expenses. Reduced attrition also ensures a higher workplace morale, which in turn affects your staff’s productivity.
- It can help you stay abreast with the times
Strategic workforce planning involves forecasting the growth trends of the industry and hiring accordingly. When you’re mindful about the expectations of your future workforce, you ensure that you hire people whose skills and expertise will match what the industry will demand in the future. Essentially, you will be ahead of the times with your recruitment.
- It can help you retain key employees
Strategic workforce planning leverages the use of technology to yield the best hiring results. These tools can help recruiters and hiring managers monitor industry developments, track key performers, and identify any possibility of attrition in the company. HRs and department heads can now take timely action to prevent star players from leaving the firm.
Talenx.io is a predictive talent management software that can assist you here. Our tool offers a highly specialized personality testing functionality, which you can use to better-understand your applicants.
Our strategic workforce planning software collates important candidate data and vets it against the key requirements of each open position, creating a comprehensive report about each candidate’s fit for the role. When you hire applicants who are the right fit for the job, you’ll reduce the chances of attrition tremendously.
Our workforce planning reports are designed to help you make strategic hiring decisions quickly and with the least effort. Now you can build and retain a diverse and competent workforce that yields phenomenal results.