A comprehensive workforce strategy means that you'll always have the right mix of skills and experience available to staff your projects.
Your workforce is the bedrock of your organization. No matter how good your product is or how robust your processes are, nothing else matters if your current workforce isn’t up to par.
That's because running optimized resource management becomes impossible when your organization lacks the talent with the right mix of skills and experience to meet project needs. In other words, the wrong people end up working on the tasks they're ill-suited to, resulting in less-than-adequate outputs.
So, what can you do about this? The first step is to devise a good workforce strategy, which will act as your guiding light when it comes to building a highly skilled workforce and optimizing resource management.
But what is a workforce strategy, and why does your organization need one? Let’s find out.
Do you have the right mix of talent in your workforce to meet your business needs? What about emerging business challenges? Do you know what skills client projects will demand in the future? What process will you use to define these requirements?
A workforce strategy helps you answer all these questions and more. A comprehensive plan designed to help your business reach its goals, your workforce strategy outlines the steps you need to take to align your workforce’s capabilities with these goals, from analyzing your current employees' abilities to future operational requirements. This process looks at the now and aims to predict your future staffing needs, allowing you to plan ahead.
Further reading ➡️ How to Create a Staffing Plan
Exactly how your workforce strategy will break down depends on its size, industry, business objectives, and other factors. That being said, these are the 10 most common components that make up a workforce strategy:
1. Workforce planning. Workforce planning encapsulates everything that goes into the process of evolving and managing your workforce, including analyzing resources, including the current workforce, forecasting future demand, identifying resource gaps, and implementing relevant strategies.
2. Talent acquisition. Talent acquisition is all about creating strategies for attracting and hiring the right people.
3. Resource optimization. Resource optimization refers to the strategic management of a business’s resources, with the goal of getting the most out of them by identifying, prioritizing, and utilizing resources in the most efficient and effective manner possible.
4. Performance management. If you want to improve workers’ performance, you need systems in place to manage the process of evaluating and optimizing performance, such as using performance metrics and regular reviews.
5. Succession planning. What happens with those in leadership positions leave the business or retire? Strategic planning helps you prepare employees to enter these leadership roles, creating a line of succession for critical positions.
6. Employee engagement and retention. Hiring talent is only half the battle — the other half is retaining your workers. One of the best ways to boost retention is to increase employee engagement by fostering a positive culture, providing development opportunities, and ensuring employees feel heard.
7. Skill development and training. Upskilling means enhancing workers’ skills based on your company’s needs and goals. This is a key component of workforce development.
8. Diversity and inclusion. Fostering a diverse workforce and inclusive workplace by implementing practices that support diversity in hiring and career development is a non-negotiable in 2024.
9. Technology. The right technology, such as HR software or resource management tools, can enhance the processes outlined in your workforce strategy, while collaboration tools can help keep your workforce working together well in the future.
10. Compliance and risk management. Every strategy has to consider compliance and risk management, ensuring that your practices won’t run you into trouble later on. This means keeping up-to-date with relevant laws and managing talent risks.
Trying to build an effective, optimized workforce that’ll help your business reach its goals is a bit like setting off on a voyage across the Atlantic Ocean without a map. And with a hole in the bottom of the boat.
Even if you have annual or quarterly workforce reviews in place, this isn’t enough in today’s world, where client expectations and employee needs are changing daily.
Instead, all businesses need a strategic workforce plan that lays out each step their business leaders need to take to build a workforce capable of delivering their goals.
But it’s about more than just producing great outputs in the short term. A good workforce strategy also allows you to anticipate and react to ongoing market changes, plan for what-if and future scenarios, and understand how small changes to workforce structure will impact financial projections.
In terms of resource management and optimization, following a strategic workforce planning process is beneficial because it helps ensure the right people with the right skills to work on the project pipeline are hired and retained.
This leads us to...
Implementing strategy workforce planning offers huge benefits to your business — and your employees. Here are some of the advantages you can expect to see:
The ultimate goal of implementing workforce strategies is to meet strategic objectives. No matter what your organization wants to achieve, you can tailor your strategy to create a path to success and identify what changes, initiatives, and processes are most likely to have a positive impact.
Your workforce strategy should align with your organization’s short-term and long-term goals to make sure your workforce is set up to carry the business through the next few years, not just the next month.
When you know exactly what talent you need to hire, you can streamline the hiring process. When you understand what training your current employees need, you can stop wasting your development budget on courses that won’t have any benefit. When you understand how to make your employees happy, you can increase retention. And when you understand how best to utilize your resources, you’ll deliver better outcomes to clients.
This combination of efficiencies means you’ll not only stop hemorrhaging money on ineffective hiring and retention processes but also draw in more high-value clients, resulting in a high return on investment for your efforts.
Your workforce strategy is designed to help you anticipate and plan for expected and unexpected challenges, ensuring your future workforce is agile, flexible, and resilient enough to handle anything the labor market, clients, or other external factors may throw its way.
From defining streamlined hiring approaches to putting plans in place to ensure high-value roles are always filled with succession planning, the strategic activities involved in workforce planning are intended to help you handle changes without causing disruptions.
Creating a strong workforce strategy also gives you a competitive advantage. Actually, it gives you several advantages:
Any business that wants to see long-term success knows that it needs to invest in creating the best organizational culture for its employees, whether that means providing a higher personal training budget or offering greater flexibility in the workplace.
Your workforce strategy will help you identify what benefits or initiatives your employees value the most and what changes you need to make to create a healthier workplace overall, contributing to effective workforce planning and talent acquisition initiatives. Some great examples include:
Simply put, having a thorough understanding of what skills, experiences, personalities, and other factors will be most beneficial to helping your company reach its goals leads to better talent acquisition.
That’s because when HR leaders know exactly what they’re looking for, the recruitment process becomes more focused. Not only do they avoid wasting time interviewing ill-fitting candidates, but they can also implement strategies to attract the highest-caliber talent aligned with the business’s needs.
Your workforce strategy will be set up to ensure you’re meeting the needs of your most valuable players, with the goal of helping your organization retain top talent and grow effectively.
Conducting interviews can help the HR department understand what factors increase employees’ likelihood of staying in their roles. This can help identify the top performers who are most valuable to the organization and ensure they receive the support and guidance they need to excel (and stay) in their roles.
To put all these handy learnings into context, we’ve put together an example of how a workforce strategy may fit into a software development company’s wider plan to meet its business objective of enhancing innovation and establishing a leadership position in the AI market.
To improve innovation and streamline product development cycles, so we can launch new AI software products faster.
The components that make up this business's strategy include:
These are the specific steps they will follow to implement their business strategy:
If all goes to plan, our hypothetical software developer can expect to experience:
Want to get the most out of your workforce strategy? Here are three best practices to follow.
For your workforce strategy to drive long-term results, you need your stakeholders to buy into the processes. They will be integral to ensuring the approach is adopted throughout the business.
Further reading ➡️ Stakeholder Buy-In: How to Get Stakeholders on Your Side
Your people are at the center of this entire process, so ensure their needs, concerns, and opinions are taken into account. It’s important to take the time to explain the importance of workforce planning and how it may impact them, which should form part of your talent strategy.
Data is integral to this process's success, as without it, you can’t conduct predictive analysis or forecast future needs. Using the right tools to collect and store employee data will support ongoing analysis and the creation of tools like skills matrices.
Ready to get started with creating a workforce strategy for your business? Get started with these handy resources:
Strategic Workforce Planning: How-To & Best Practices.
Our step-by-step guide to strategic workforce planning.
11 Workforce Planning Tools of the Highest Caliber.
Top tips on choosing the right workforce planning tools for your organization.
What is Workforce Scheduling & How to Optimize It
All the advice you need on how to get the most out of your resources.
