The key to workforce planning and hiring productive employees
Workforce planning describes the process of forecasting the size and type of workforce needed to meet organisational goals. Key elements include assessing skill gaps and managing talent. Essentially, you’re calculating whether the supply of your employees and their skills meets the demands of your organisation.
The goals of any successful workforce planning strategy touch upon all aspects of employee experience. To sustain growth and increase revenue you must keep top performers and attract new talent. So any initiatives that increase engagement while maintaining wellbeing should be included in your workforce plans.
In this article, we discuss:
- Why workforce planning is important
- Companies with successful workforce planning strategies
- How to create a workforce plan
- The stages of workforce planning
- How to maintain engagement
Why is strategic workforce planning important – what are the benefits?
Simply put, strategic workforce planning is the process of balancing the needs of your organisation against your current or future workforce. It's an incredibly important analysis because salary spend is likely your largest expense.1
If you’re spending too much on wages, but aren’t getting the output you need to drive revenue, this will decrease your profit margins. Alternatively, if you’re spending too little, you risk employee burnout and stunting business growth.
Striking the right balance between filling workforce gaps and ensuring you’re not overstaffed can be tricky. But when you get it right your organisation will experience numerous benefits, including:
- Achieving financial objectives: When HR teams are in alignment with the finance department, they can better identify workforce gaps and recruit the right people at the right time. This means you have enough employees to grow your organisation and revenue.
- Improving employee experience: Accounting for future demand and drawing up a strategic workforce planning process prevents unnecessary stress. Additionally, anticipating your employees’ goals in times of growth should also be a priority if you want them to develop and mentor new hires.
- Increasing retention rates: Understanding who drives the most revenue, but is also at risk of resigning means you can focus retention strategies on these specific top performers. Moreover, using data in this way reduces managerial biases, so the same employees don’t keep receiving raises and incentives. Unless, of course, they’re top performers.
- Greater collaboration: Including different departments in your workforce planning naturally promotes a more collaborative culture. Encouraging finance to work with HR and employee experience managers builds stronger working relationships and additional cross-departmental insight.
- Higher levels of job satisfaction: When you have an accurate workforce planning strategy it could free up more investment for training. Reinvesting money in your employees' development keeps motivation and engagement high – both of which are crucial components of job satisfaction.
Companies with effective workforce planning practices
At the centre of every strategic workplace planning practice is well-gathered data. But that’s not all, data is only useful when it’s acted upon. And the following companies understand that taking action is just as important as analysing the figures.
- Oxfam: Oxfam know they can’t compete with the private sector in terms of salary and financial incentives. But what they do well is funnel their spending into training and development. By doing this, they don’t waste precious resources on recruitment. Instead, they focus their spending on initiatives that promote employee retention.
- Prudential: Prudential prides itself on its inclusive comms strategy. Every employee hears about the highs and lows the organisation experiences. Additionally, they also understand that HR processes change with time and that adaptation is important. This is what keeps them ahead of other similar corporations.
- Alliance Boots GmbH: Or Boots, understand the importance of employee wellbeing. They put everything into making their work environment as stress-free as possible. Their employee-engaged philosophy keeps turnover low and helps them reinvest back into training and community-driven programmes.
- Sainsbury's: Sainsbury’s operates on tight margins, consequently it’s crucial their workforce planning is accurate. Nevertheless, every penny saved in employee overheads is reinvested back into the company. In fact, their HR department was the first to develop self-service checkouts. With more employees working on stock replenishment than tills they were able to get more items out without overloading their teams.
- BT: BT have the advantage of being a communications provider, so they excel at keeping their team up-to-date with the latest news. However, their real strengths lie in their flexible working policies and apprenticeship schemes. Investing in their teams saves them money overall as they spend less on recruitment and have access to a wealth of homegrown talent.
How to create a strategic workforce plan – actions to consider
When you’re creating a workforce planning process, you should:
Put together a cross-departmental team
To create a successful strategic workforce plan you need insight from several departments. All information should funnel into HR and finance teams, as ultimately they’ll be taking the lead. But it's important not to neglect input from other senior leaders in different departments.
Build a plan around your business strategy
To do this, you must first understand the state of your workforce, and no we don't mean you should just record headcount and salaries. You need to take a more qualitative approach. Understanding your employees’ skill sets and qualifications will help you see where they’ll fit in your future plans. And also highlight any skill gaps.