People are the real unique strength of every organization - and that's why workforce planning has the potential to add so much value. Learn how in our guide.
Business leaders and consultants will often comment that people are the biggest expense any business has. And (from a balance sheet perspective) this is true in many industries.
However, it's less often that you hear the corollary of this: people are also the main creators of revenue for a business, particularly in service based businesses.
Not only this - your people are also the curators and guardians of organizational knowledge, the champions and advocates of your customers, and the biggest believers in your brand. This is why investing the time and effort into deliberate workforce planning is always worth it.
And if something is worth doing, it's worth doing right! So, to get you set for smooth sailing with any workforce planning processes you might face, we've pulled all the information you need to know in this guide:
Workforce planning is an umbrella term that encapsulates all the actions that go into strategic evaluation and management of your workforce. It involves analyzing current resources, forecasting future supply and demand, identifying resource gaps, building and implementing relevant strategies, as well as monitoring and evaluating the whole cycle before starting it anew.
In short, workforce planning is not just about managing workloads: it's an all-in process that requires adequate preparation and strategic thinking. More often than not, workforce planning goes in cycles, especially if you have a team dedicated to resource management and improvement.
This concept is on the daily agenda for HR professionals, resource managers, and people leaders who focus on any aspects workforce management - from productivity and upskilling, to capacity and demand forecasting.
Optimizing how your workforce works, boosting its performance, and strategically developing and utilizing its potential, is key for a company to be successful, dynamic, and competitive.
Not recognizing the importance of workforce planning, on the other hand, can lead to excessive overhead costs, overworked and burnt out employees, high employee turnover, and a growing poor reputation for the company as word gets around that it's a chaotic place to work.
Here is a brief overview of the benefits that come with workforce planning:
There are a few pillars to strategic workforce planning. Before taking a dive into your current workforce, labor costs, and all things resource planning, consider the key principles that predefine success.
The larger business value of project management is already clear for organizations. Resource management and strategic workforce planning, on the other hand, are not always given a seat at the table, despite holding the keys to a ton of potential cost saving and optimization initiatives.
However, in order to succeed with workforce planning, you need to get leadership buy-in and their investment into the importance of effective workforce planning. This will, in the end, define how much authority, independence, and place workforce planning gets within the organizational strategy and goals overall.
Operational workforce planning is also difficult if stakeholders are in the dark about its value and everything that is happening around it. Overcommunicating and clarifying all the why's is paramount for workforce strategies to pay off.
Further reading ➡️ learn how to get leadership buy-in for resource management.
Strategic planning asks for data-driven decisions that account for both internal and external factors. Luckily, there are lots of workforce planning metrics that can help you make informed decisions and reliable calculations.
Among other things, you need to be looking at:
Unfamiliar with some of these terms? Bookmark this handy reference sheet ➡️ our Resource Management Glossary 📕
If there is one ultimate goal and forever-principle to workforce planning, it would have to be hunting down inefficiencies. The strategies that go into any workforce plan will always have at least something to do with uncovering inefficiencies, optimizing processes, and maximizing revenue.
In fact, there are many workforce planning models out there, but whatever your project or business is, you are highly likely to go with an optimization model. These models are all about eliminating inefficiencies by reducing staffing costs or increasing project outputs while working with the same pool of resources. You will generally be trying to identify constraints and find more profitable resource allocation scenarios that will help people be more productive without clocking in more hours.
For workforce planning to hit all business objectives, it's paramount to remain agile and look into the potential traps lying ahead. Being able to create a sustainable workforce planning framework means you need to know exactly how and why future workforce might change. Here are some impactful challenges to consider:
True, workplace culture is generally becoming more flexible: more remote and async work options, growing gig culture — all of these are making it somewhat easier to make workforce planning happen. However, there is still this very tangible shortage of skilled personnel that has the required seniority levels, skills, and, most importantly, availability to take on new projects.
In our recent webinar exploring "Resource Management Mistakes Not to Repeat in 2024", we talked to Martha Arias, Senior Director Resource Management at JFF, and Gary Ward, Director Global Resource Staffing at Guidewire Software, and found out that time-to-staff is still a major resource management metric that shows just how efficient your workforce planning is.
Workforce expectations are changing, and for good reasons. People want more flexibility from work, leaving an outmoded "9 to 5" culture behind, being free from the burden of having to commute to the office every day or being tied to a specific location because of their work.
In order to attract top talent, your workforce planning strategy will need to account for this trend: remember, you're competing for the best people, and the best people are going to go for the best offer! And in today's employment landscape, that means a role that compliments rather than restricts a candidate's lifestyle.
But it's not just the logistics that make working with talent different today, it's also the raising awareness of being committed to companies that have a specific impact on the world. Before joining a new company, people are highly likely to investigate what groups they will be associated with and what values the company stands for.
In many cases, they will even be willing to sacrifice certain benefits for a chance to join a company making a valuable change in the world.
Automation and AI are already going at full throttle, and things are expected to only escalate from here. Certain skills might become obsolete or need to adapt in the nearest future, as they are augmented or even replaced by automation tools.
And if you look at this through the prism of workforce planning, this means you might hire people for the skills that might become redundant within a short period of time, leaving you with overhead costs or staff that needs to be retrained or upskilled before you can actively use their time for new initiatives.
In many cases, the HR department will be leading workforce planning initiatives within a large organization, or will at least have a large role to play in it. However, senior management and the C-suite in general always need to dip their toes into workforce planning whenever they build the overarching organizational strategy.
When it comes to companies with dedicated resource management departments, workforce planning will have the main seat on the daily agenda: they will be planning everything from size and cost to agility and relevance of past, current, and future workforce.
A workforce planning process is a step-by-step path you take to analyze and optimize the use of the company's workforce in order to hit long-term objectives.
This requires you to apply strategies that maximize the potential of existing resources as well as enrich the talent pool with the type of hires that are most relevant, sustainable, and committed to the company. It is this planning and analysis that helps organizations gain clarity on how they are going to reach the desired growth and market share expansion.
For more detail, check out our guide to effective workforce planning processes ➡️
There's no doubt that workforce planning comes with a fair share of complexities, but there are also a lot of tried and tested things you can do to improve your workforce planning process.
External and internal environments have a big say in just how sustainable and reliable your workforce plan turns out to be. They can impacts the needs, wants, and expectations of your workforce as well as the things your organization can expect from it in return.
Does your workforce plan click with the long-term business strategy? Does it ensure employee development and accommodate future staffing needs? Does it paint an accurate image of the existing workforce and the way it could change due to any circumstances within or outside of the organization?
Doing regular environmental scans and gaining a tight grip on the potential areas of influence will take you many steps closer towards long-lasting workforce, where most of your work is directed at improving rather than rebuilding from scratch time and again.
It's very common for resources to move both vertically and horizontally within a large organization.
Even more, this internal mobility and succession are an integral part of employee retention, satisfaction, and loyalty. When people see no future or career growth opportunities within their company, they are a lot likely to move on sooner rather than later.
But although many look at this as a threat, it's actually a great asset - if you anticipate it in time to do succession planning.
For example, if someone will be retiring or going up the ranks in the coming years, that gives you enough time to find the best replacement within the organization, which not only cuts hiring costs, but also gives you adequate time for upskilling the people that are already great for the role. Not to mention the impact this will make on people feeling recognized for their potential and invested in their future with the company.
Scenario planning is not just a way for you to anticipate the different ways your workforce plan could play out. It's also a great way to group and synthesize all the information you have managed to accumulate about your past, current, and future workforce needs.
It gives you a chance to take a moment to designate those 'what-ifs' and see how they might impact your resources, their capacity, and the business overall, with enough time to build back-ups plans should you ever need one.
With Runn's people and project planning features, for example, you can model how various project workload scenarios will impact different teams and individuals within the company ahead of the work commencing. This gives you the opportunity to see which roles are likely to be under pressure months before the rubber actually hits the road.
As we have already mentioned, the job market is changing. AI and automation are a part of this, but so are an increasingly volatile economy and evolving consumer needs.
This stands not only as a challenge to workforce planning, but also as an opportunity to be ahead of the competition and drive the change rather than tag along with the ones initiating it.
In short, this means you need to anticipate what roles will become less necessarily and which roles will gain momentum, along with the skills people need to do them. Hiring that type of workforce or, even better, training it early on once again means grabbing a front-row seat in any industry.
A great place to start is by performing a skills gap analysis for your organization, to see where your workforce is standing in terms of their current skillsets and competencies. For a bird's eye view of skills, Runn gives you the ability to keep a skills inventory and see everyone's expertise, seniority levels, and the potential they have to upskill themselves (and even to help coach others).
The more people you have, the more data there will be. Time, skills, availability, capacity, wants and needs, time-off, individual requests — there's always more data that you can track. Not to mention the web you will end up spinning when you have hundreds if not thousands of resources.
But, with reliable workforce planning tools on your table, the job of managing all this data ceases to be a pipedream and becomes to a very achievable (not to mentioned user-friendly) reality. For reliable workforce data to support your decision making every step of the way, take a look at how Runn makes skills, workforce capacity, individual utilization and team utilization rates transparent and simple to track.
Take a look at how Runn makes workforce data simple and beautiful ➡️
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