In the late 1990s, I was a part of my employer’s early efforts at workforce planning. At the time, workforce planning seemed to be a discipline in its infancy.
Our workforce planning was mostly about numbers: How many employees could we afford in various divisions of the company? Would retirements in our aging workforce cause problems in our ability to produce product?
It took a few years for our company’s leaders to move beyond the demographics to consider the skill sets needed in a changing environment. Which skill sets did we have too much of? Which would be required in the next decade, and could we grow those skills internally or would we have to hire to fill our needs?
I argued at the time that workforce planning was the strategic layer behind every Human Resources discipline. I said workforce planning was the practice of defining who the right employees were, when and where they would be needed in the workforce, and all the tools needed to hire and keep those employees—the compensation and benefits and perks, the employee relations and employment branding practices, the training and leadership development, etc. Everything designed to get the right people in the right jobs at the right time was a part of workforce planning.
Unfortunately, some of our corporate managers never could make the shift beyond thinking about workforce planning as headcount. Those managers themselves were part of the skill sets we no longer needed—we would have to seek out more visionary leaders to take their places. It took years and years of arguments to move to a more strategic view of workforce planning.
I was intrigued to read a January 30, 2018, article on SwipeClock.com by Cary Snowden, entitled Defining Your 2018 Workforce Management Strategy. In the twenty or more years that workforce planning has been around, what has changed?
Mr. Snowden starts by defining workforce planning:
“The definition of workforce planning describes a continual business planning process. It’s a long-term, ongoing effort that expands as the organization grows. This isn’t a quick fix, so settle in and prepare for the long haul.”
Clearly, Mr. Snowden sees workforce planning as a strategic component of Human Resources and general corporate management work. He says it is not just a short-term effort, but “also includes forward-looking plans for organization growth, new talent acquisition, and management of outsourced third-party services.”
But it appears that the same barriers I faced in the late 1990s are still around. Organizations focus on immediate needs, rather than a long-term look at what workers they will need, even though “Workforce planning is a long-term game that requires patience and finesse,” according to Mr. Snowden. Gathering the data is hard and requires robust information systems and mining capabilities.
But data-collection and -mining systems have come a long way in two decades. My workforce planning efforts were based largely on an Excel spreadsheet. I could capture demographic data from our HRIS system, but despite my desire to move on to skills development, defining the skills of the current workforce and predicting the needs of the future were largely beyond my capabilities. As Mr. Snowden puts it, my company was largely operating on hunches, when good data were needed.
The five-step strategic process that Mr. Snowden outlines is similar to what we tried to do back in the late 1990s:
- Establish a strategic direction for your workforce, based on the changing skills needed for the products and services your company plans to offer and the financial models you are using.
- Analyze the existing workforce and determine gaps, whether those gaps are in numbers or skills.
- Create an action plan to address the gaps.
- Implement the plan.
- Monitor, analyze, and evaluate . . . which includes circling back as your strategic plan for the organization changes and more changes are needed in your workforce.
Described in these “simple” five steps, the planning process for workforce planning is no different than any other planning process. What makes workforce planning so challenging and unique is the difficulty of having the vision and accuracy to predict what skills your business needs and what you need to do to find, attract, and retain high-caliber people who will achieve your business goals, while at the same time relinquishing the people who can no longer contribute as needed.
According to Alan Mellish, in an article published on March 27, 2018, on HCI.org’s blog, entitled Workforce Planning in a Fast-changing Economy: Common Pitfalls to Avoid, here are some things to watch for:
- Waiting for all the data (you’ll never have it)
- Not aligning your workforce planning with your business needs
- Not prioritizing the roles that will make the most difference for your business going forward
- Failure to integrate data from inside and outside the company
Today’s trends such as economic growth, trade disputes, changes in labor and other regulations are factors to include in workforce planning. Every business will see different impacts from these trends and from issues specific to your industry and market.
The labor market is tight these days, particularly in highly desired skill sets. Over 6 million job openings are unfilled in the current market. You will have to do a better job at workforce planning than your competitors. Are you ready?
What successes and failures has your business had with workforce planning?