Your workforce is your business’ most important asset. But often, businesses don’t use the data and resources available to them to plan and optimize their workforce to deliver the greatest level of productivity. Workforce planning models allow you to structure your organization to make the best use of your workforce, fill skill or capacity gaps, and ensure business continuity as your workforce changes.

Upgrade Legacy Workforce Planning Processes

Traditionally, businesses have used an operational workforce planning model. Taking the basics into account, including payroll, labor laws, onboarding, scheduling, and absenteeism, the finance or operations department would review the business’ needs and goals, look at historic data such as employee turnover rate and age profiles, and then make low, medium, and high hiring projections. The conclusion in January might be that the company has 10 employees in one department, and may need to hire four more at the most or, at the least, hold the line for the year. And there may be no further discussion until the following January.

This operational workforce planning model, however, isn’t sufficient to meet today’s challenges.  With the summer 2018 unemployment rate at only about 4 percent, it’s harder to find skilled workers when you need them. Not only is it harder to find the right employees; it’s harder to keep them. A survey by employment firm Robert Half found 64 percent of professionals think changing roles every few years can lead to benefits —primarily a higher salary. Moreover, “job hopping” seems to be a trend among employees entering the workforce: 75 percent of employees ages 18 to 34 view it as beneficial, compared to 51 percent of workers 55 and older. Traditional workforce planning models often don’t take the challenges of recruiting and retaining talent in a good economy into account.

Operational workforce planning also has another flaw: The process doesn’t include line managers, who can be vital to wise, cost-effective decision making. When the finance department alone plans for hires using a position-based model, it can result in an inflexible annual budget that that line managers are forced to work with, even if production levels change or employees leave the department. This can lead to hiring contractors to get work done or delaying hires that limits production. And both options can lead to decreased productivity and increased costs.

A Better Approach: the Strategic Workforce Planning Model

A strategic workforce planning model takes a smarter, data-based approach to workforce planning. Instead of merely looking at budgets, numbers of employees, and schedules, strategic workforce planning leverages data from a variety of sources to create a true picture of your current workforce and gaps that exist, as well as accurately forecast the workforce skills the business will need in the future. Workforce planning also identifies barriers business may face that are standing in the way of reaching its strategic workforce goals, and develops a plan to overcome them. Strategic workforce planning is also a continuous process, adapting the plan to respond to changes in the workforce, the business and the industry.

Strategic workforce planning is virtually impossible without the proper technology, such as a human capital management (HCM) system. Without data collection and analysis that technology provides, workforce planning based on data would be a monumental manual task. Your HCM system along with other business applications can provide the reports you need, in real time, on your workforce, trends, and labor requirements to reach goals. HCM can also help a company align its operations with its strategic planning goals, identify and correct issues within the workforce such as absenteeism or a higher-than-average quit rate, and use predictive analytics to make smarter hiring decisions.  Using technology also makes it easy to manage workforce planning as a continuous process. The workforce planning model can be updated as workers leave a department or as other circumstances change to provide a clear picture of the best steps to take.

Workforce Planning Model Gap Analysis and Action Planning

Another advantage of a strategic workforce planning model is gap analysis and action planning. This function shows your business where skills or capacity gaps exist and how you can best close those gaps. Gap analysis and action planning has probably always been a part of workforce planning; however, in the past, it was greatly based on intuition. Conversely, a strategic workforce planning model powered by analytics bases those decisions on data.

Gap analysis and action planning functionality will give your business the visibility that allows you to recognize gaps and then show you the best path to take to fill them — not just with recruiting, but with HR policies and labor management activities, such as retraining to fill empty roles and avoiding the costs of onboarding new employees. Gap analysis and action planning can also help identify employees for promotion and annual raises based on merit, which can contribute to an effective retention plan. It’s also a method for identifying risks among employees who perform mission-critical jobs and roles and planning actions that can help reduce those risks.

Types of Workforce Planning Models

Every business and every workforce is different. A small startup with a young workforce, for example, would approach workforce planning very differently than a large corporation with workers with a wide range of skills and of all ages. The workforce planning model you choose will depend on your unique workforce and your unique circumstances. Different types of workforce planning models include:

  • Multilevel Workforce Planning Models
    You may find that an operational workforce planning model works well for a manufacturing line, but you need strategic workforce planning for C-level positons, engineering, and management. A multilevel workforce planning model that addresses different levels of your organization differently may work best for you. Objectives within each level will most likely vary, so you may use strategic planning to address succession planning and retirement of upper management and recruiting new professionals, but an operational planning approach to deal with absenteeism and new hourly employee training.
    The timeframe that each level plans for may also vary. Strategic planning can take a much further look into the future to give the company adequate time to plan for major changes to senior management compared to planning that anticipates changes among hourly employees.
  • Workforce Planning Maturity Model
    If your company is a successful startup, you may choose a workforce planning maturity model. You know your short-term goals for managing and expanding your workforce are quite different than the goals you will have as you reach certain milestones and you set new goals. Workforce planning can take this into consideration, helping you to lay the groundwork now with talent acquisition, leadership development, and succession management that will well-position you as your business grows. A sample workforce planning model for companies on a growth trajectory is available from Bersin and Associates.
  • Regional Workforce Planning Model
    A regional workforce planning model can address the challenges a national or global businesses can face. This is a popular model for workforce planning if a widely dispersed organization needs different policies on a regional level for temporary labor availability, localized labor laws, cultural differences, or varying percentages of the workforce reaching retirement age. A regional workforce planning model can also be beneficial if strategic objectives vary by region, such as opening a new facility in a particular area or changing operations to address new competition in another.

The Benefits of a Model That’s Right for Your Business

Aligning a strategic workforce planning model with your business and its goals will provide you with a number of benefits. You’ll have the foresight to see gaps or potential gaps in your workforce that can interfere with productivity and allow you to close or prevent them. It will fuel your recruitment strategy with the information you need to find people with the skills you need. It will also show you how to optimize your current workforce with reassignments and training that can minimize the cost of new hire and increase retention. Take advantage of the data available to you and plan to operate with an optimized workforce.