It’s not unfair to say that the workforce within an organisation often comes into place over a long period, based on many factors. Not least of these is the status quo – we need ‘one of these’ because we’ve already had ‘one of these’.
When someone leaves, they are replaced. When a department gets busy, its team is expanded. When times are tough, people are cut. Seems straightforward enough. Yet it’s all very reactive. Things get done when they need to.
This isn’t terribly efficient. It can be very wasteful. People could be hired when they’re not needed. People could be let go when they desperately are. It could be that the very person they really need might be sitting somewhere within the organisation – perhaps with not quite the right skills, but not far off.
Planning the workforce
The role of workforce planning is to move organisations away from thinking about headcount, into thinking about skills count – which skills does an organisation need? When does it need them? Where does it need them?
This is harder than it looks. Organisational inertia can assume that certain skills are needed when they are not. Company boards can shift the strategic direction of a company without talking first to the human resources team, or the learning & development team. Markets can change – companies can get caught out with obsolete skills.
It’s hard to say what percentage of inefficiency this can lead to within an organisation – but it wouldn’t be a big stretch of the imagination to say that perhaps 10%–20% of the workforce at least wasn’t properly aligned to the needs of the business.
What is workforce planning?
There are five essential steps to workforce planning:
- Understanding the environment (the business, the market, things that might happen, things that are happening)
- Understanding your current workforce (the skills your organisation currently has, where they are located, how they are managed – but not just the people or roles, where those people come from, the supply and demand for those skills, the alternatives to those skills, different ways of acquiring or growing those skills)
- Understanding your future workforce (when you look to understand the environment, the trends around you, this can – and should – help you understand how things will change, the types of skills you will need in the future, the skills you won’t need, the skills you might need)
- The targeted future (where your organisation needs to be in the future, what its strategy is, how that strategy changes when external – or internal – factors change)
- How the gaps can be closed (putting in place the things you need tomorrow, today – moving towards the future your business needs in terms of skills and resources)
The steps may seem simple, but they can be surprisingly time-consuming, with a lot of detail to cover and a lot more organisational cross-communication than perhaps is usual. It also needs sponsorship and ownership.
A new view
Workforce planning also needs a lot more coordination when it comes to the various strands of skills acquisition – the places that need to adapt so they can action the workforce plan and close the gaps. These are:
- Industrial relations
- Job design
- Knowledge management
- Learning and development
- Pay, benefits and rewards
- Workforce retention
Interestingly, a different team often manages each of these. The new world order doesn’t mean that this has to be one team: but those teams really do need to talk and be working to the same plan (or set of plans).
There also needs to be a shift in focus and responsibility. For example, in many companies, the human resources team has become a quasi-legal entity, a hire-and-fire department aligned to damage limitation – when it should be proactively planning the workforce. And by planning in a greater sense than filling an empty chair – a much greater sense.
Human resources and L&D departments really need to work closely together and recognise that they’re solving the same issue, but in different ways. Not only that, but they can also solve each other’s issues. The person the human resources department has just been instructed to release could be (with a little training) exactly the right person for another department, a sideways move or even a promotional one.
(It’s not a surprise that people often get their biggest pay hikes and career opportunities when they move companies – it’s a more established process for climbing the ladder. But things could be radically different for the fortunes of people and their employers if a workforce planning process was in place.)
The learning management system is most often the preserve of the L&D department – yet it could be a key talent management tool, not just one for tracking skills.
It’s true that many companies have systems in place – learning management systems, talent management systems and other HR systems. But, fundamentally, these are tracking what has happened – workforce planning does the opposite, it plans for the future.
“The core value-add that L&D creates within an organisation is that it enables people to work smarter,” said the LPI’s Alan Bellinger, “and the critical metric for working smarter is the workforce plan. For example, if a 10% increase in performance could be achieved by a 6% increase in the workforce, people really are working smarter!”
Having a plan doesn’t mean keeping things on one track. Indeed, the whole point of a workforce plan is that it allows you to plan for different scenarios more effectively. “What happens if the economy takes off?” “What happens if the economy dives?” “What happens if our competitor releases a killer product?” “What happens if our product becomes irrelevant?” Whatever scenario you can think of, you can now plan for – and, if things change, you’re already set to go. You can turn your company on a sixpence, while competitors are still scratching their heads. Sure, there will be things which you can’t plan for – but many of your scenarios will be close enough to adapt to face the unknown.