Key Takeaways
1. Strategic workforce planning is a tool for business and HR leaders to scope and plan for the capabilities which their companies are likely to need in order to meet future business goals.
2. A strategic workforce plan aims to shape staffing in line with future business needs and challenges. Robust planning should enable companies to operate more effectively and meet key goals in a future environment with evolving demographics, economic trends and commercial opportunities.
3. The continued normalization of remote working, use of a contingent workforce, and integration of collaborative online working platforms, could all have significant potential impact for future workforce shape, size and skill requirements.
4. Strategic workforce planning can help companies to operate more smoothly, with more predictable staffing costs and greater productivity and profit. Without a strategic workforce plan, fluctuating staff costs, unforeseen trends, and gaps or performance failures affecting critical business, could all waste time, energy and money.
Introduction
2022 may be a good year to look towards the future and make decisions on the long-term direction of your company and the workforce needed to power your business ambitions. International HR leads in particular should be reviewing and revising the longterm strategic workforce plans for their companies in the light of the COVID pandemic and related shifts in labor markets and working patterns.
In larger and/or multinational companies, it’s important that changes to staffing are made intelligently and in a coordinated way which supports business objectives and minimizes business disruption. Strategic workforce planning is often the answer to this need.
Definition of strategic workforce planning
Strategic workforce planning is the art of creating a workforce which can operate effectively in the future environment in order to meet your company’s goals. It sets out the numbers, skills and nature of workers likely to be required by the company, while considering relevant trends, challenges and opportunities at play in the external environment.
A strategic workforce plan should be developed and updated in alignment with core business planning. Business leaders should consider their strategic workforce plans regularly as one of the fundamental delivery mechanisms for their company’s vision and objectives.
What is the purpose of strategic workforce planning?
The ultimate goal of strategic workforce planning is to make sure that you have the right staff in the right positions at the right time to realize your company’s strategic vision and meet the objectives in your long-term business plan.
It should act as a guide and reference point for managers, HR leads and anyone making decisions around recruitment, training, promotion or other staffing issues. Business leaders should refer to the strategic workforce plan when monitoring business performance data and looking for ways to improve productivity, engagement and cost effectiveness.
In terms of scope, the strategic workforce plan should include information around:
- Numbers
- Businesses must plan to have neither too many staff nor too few, balancing recruitment levels against retirement, redundancy and other exits.
- Location
- Staff must be deployed in the right regions, countries or cities to fit business needs.
- Timing
- Recruitment and internal appointment systems must be managed to ensure that critical business areas do not carry long staffing gaps. Succession planning is required for senior roles.
- Costs
- A strategic workforce plan should include a budget and demonstrate the financial value added to the company by the shape and size of any proposed future workforce.
- Worker type
- The nature of the proposed workforce should reflect business needs for permanent, temporary, casual, part-time, contractor, or any other types of staffing. Where the work is to be remote, the strategic workforce plan should cohere with a remote work policy.
- Skills, knowledge and competences
- The workforce must maintain the key skills, knowledge and competences required for business (e.g. languages, project management, economics).
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Benefits of strategic workforce planning
With a strategic workforce plan in place, your HR leads should have a superior vantage point to inform staffing policies and decisions. This can help to get the right staff in the right positions at the right time, with advantages including:
- Better business performance
- A well-designed and competently-delivered strategic workforce plan is a powerful tool for realizing a company’s core business goals. If you get it right, your plan could open a door to greater productivity, access to new markets and support your broader international expansion strategy.
- More predictable staff costs
- Better strategic workforce planning should mean less budget surprises around staff payroll and wider costs. Finance leads should be better placed to estimate future workforce costs.
- Efficient use of line-manager and HR time
- With an effective plan guiding recruitment, staff development, monitoring of levels of skills, competences and learning etc.. there should be less time and energy spent by managers and HR leads on planning and support around individual roles.
What does a Strategic Workforce Plan look like?
Strategic workforce plans will look different from one business to another, depending on sector, size and company goals. At the same time, a strong strategic workforce plan is likely to have certain key features, or background research and evidence components:
1. Mission and vision
The strategic workforce plan should have clear scope, timescale and links to the company’s top-level vision, aims and business plans.
2. Current workforce snapshot
HR leaders should conduct or commission a full review of the shape, size and fitness of the current workforce. This would typically include information on demographics, locations, contract types, costs, skills, competences etc..
3. Business intelligence and foresight reports
For a robust long-term view, a strategic workforce plan requires an assessment of current business intelligence in relevant sectors, as well as an investigation of trends, opportunities and challenges likely to matter for the company along the time horizon of their business and workforce planning.
4. Staff engagement and public opinion data
Information around internal staff engagement and public perceptions of a company can help establish how they are seen as an employer and give insights into potential issues around staff retention or recruitment.
5. Future workforce snapshot
Drawing on key inputs, HR leads or external experts will need to set out the shape of the future workforce that would be needed to deliver business goals, considering the wider environment, affordability and feasibility of recruitment. This should include estimated staffing costs and long-term liabilities.
NB Depending on the importance and predictability of wider trends beyond company control, planning for 2-3 different future workforce scenarios can make a plan more robust.
6. Transformation roadmap
A strategic workforce plan needs a roadmap and/or action plan showing how the current workforce can be transformed into the future workforce. HR leads should be ready and able to monitor the transformation and report progress to business leaders. Recruitment, promotion and redundancy needs should be made clear and communicated appropriately to existing staff to maintain engagement.
How to introduce strategic workforce planning
1. Senior ownership
Introducing strategic workforce planning requires board-level leadership, explicit buy-in and active support alongside the work of the HR leaders and managers who will usually carry out or oversee the necessary scoping, reviewing and drafting.
2. Staff involvement
If this kind of thinking is new to your company, or your strategic workforce plan has not been refreshed in some time, you should pay particular attention to how you communicate this work stream to your current staff. Be clear on what the plans will cover and how they will be used.
Some staff may fear that strategic workforce planning will precede a forced redundancy program or pay cuts, while others will feel more positive, potentially being interested in opportunities for promotions, acquiring new skills or transferring location.
3. Expert advice and support
This is an area where it can be helpful to involve external experts. From horizon scanning the economic and social trends which could affect future recruitment and retention, through identifying new markets and opportunities for overseas expansion, to on-the-ground delivery of your strategic workforce plan in a key country, sometimes there is no substitute for local expertise and insight.
Foresight advisors, business intelligence consultants and Global Employment Organizations (GEOs) may all have a role to play.
How Horizons supports strategic workforce planning
For international companies, external expert advice around strategic workforce planning can save time, identify gaps and opportunities, and add wider value, especially around international HR. Horizons has extensive experience in providing employment solutions to support strategic workforce planning around the world.
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Frequently asked questions
Workforce planning is a proactive business approach to staffing where recruitment, staff development, redundancy, retirement etc.. are considered together as part of an overall strategy. Without any workforce planning, they might be dealt with individually for each job or team or handled as separate workstreams in HR. This would make it harder to evaluate the current workforce or create a workforce which meets future business needs.
A strategic workforce plan should be developed by HR and business leaders and guided by core business objectives. It should incorporate external trends, insights and expert advice as relevant for the sector and operations.
The exact shape of the plan will depend on the individual company but in general, it would need to include the broad vision and goals of the future workforce, an assessment of the current workforce, and a roadmap for transforming one into the other.
