A Complete Guide to Workforce Planning in 2023

The way we see the professional setting and work has drastically changed in the past three years. Most companies and organizations are leaving behind traditional methods and systems and learning to manage their operations more efficiently and intelligently.

Moreover, the way businesses themselves run has transformed. The pandemic has impacted every aspect of our lives, including the social and economic realm, which significantly influenced the workforce.

The Great Resignation started in 2021, inspiring an unstoppable wave of empowered job seekers and employees demanding better work conditions and opportunities. That also inspired an increase in labor unionization activities and efforts at multiple global organizations and companies (e.g., The New York Times, Amazon, John Deere).

An astonishing number of people have been sending clear signs to employers that they have had enough and demand things to change. Businesses can't do much but address these appeals because their agility and continuity are impossible without qualified employees getting the job done.

The Importance of Keeping Up with Ever-changing Demands and Expectations

On the flip side, finding and retaining skilled talents and ensuring operational efficiency are becoming more challenging. But leaders must have visibility and insights into how their workforce performs.

Otherwise, they will struggle with handling labor costs and employee retention.

Employers must have adequate systems in place to ensure their labor matches the demand, or they won't be able to improve the work conditions continuously. After all, employees will likely jump ship if a company fails to provide a predictable schedule that aligns with their wellness and lifestyle needs.

On the other hand, increased compliance complexity exposes organizations to more risk and challenges in staying ahead of continuously changing requirements. Organizations and companies depend on a workforce management system that allows them to anticipate and prepare for future disruptions.

That's why workforce planning is essential.

What is Workforce Planning?

The world is moving faster than ever with the non-stop evolving technology and disruptive trends. Decades ago, people would have had a more or less predictable professional path - they would join an organization and spend most of their career there.

Moreover, it was no surprise when a person would spend their entire adult life in the same position or company. But that landscape looks more distant with every passing day, as things keep changing rapidly, with the momentum getting faster.

Today, people have more opportunities and will quit their jobs if dissatisfied, especially with management, team, workload, or lack of career growth. They are no longer willing to dedicate their lives and careers to a company without getting enough in return. 

That transformation has increased the importance of effective recruitment, primarily for small and medium companies. The talent war keeps raging, causing stellar talents to be off the market in a matter of days.

Some industries struggle with a higher lack of available job seekers than others, making strategizing crucial to beat the competition. The best way to ensure that, attract quality candidates and retain employees is developing substantial workforce planning.

If not, you risk wasting valuable resources on unnecessary recruitment elements and undertakings. That means that workforce planning represents the central business process that helps leaders align the people strategy with organizational needs and goals.

Many claim this is the essential activity of every organization, making it the core field of executives' engagement. However, it's not complicated; you can adjust it to your company's maturity, size, and resources.

Workforce planning can give you industry and market intelligence, allowing you to focus on issues that impact your company the most. It can also help you create initiatives that will support your long-term objectives and actions.

For instance, this workforce planning can help you identify and address a lack of specific abilities among your employees and strengthen your teams. Surprisingly, only 46 percent of employers use data to determine skills gaps in their organization, according to the 2021 survey by OMNI and the CIPD.

The same survey found that just 36 percent collect data to understand their future requirements regarding employees' capabilities and knowledge. No wonder Gartner discovered that only 33 percent of HR leaders rate their organizations as effective at using data in workforce planning.

Because of that, you must know what this undertaking involves and how to perform it.

What Does Workforce Planning Include?

Workforce planning is about producing information, assessing it to gain insights into the future demand for skills and employees, and turning it into multiple actions that will build upon your existing workforce, close the gap, and answer the demand. The following are the two types of workforce planning:

• Hard workforce planning: This approach is associated with numbers, as it's meant to help you understand how many people and with what specific skills you'll likely need. However, you must understand this data in a relevant context.
• Soft workforce planning: This is about developing a strategy that will help you determine how you will assess information. Thanks to this approach, you can come up with various possibilities before you hit the stage where circumstances will force you to take action.

How Should You Conduct Workforce Planning?

Here are vital tips on how to go about workforce planning.

1. Understanding Your Company and its Environment

You must first understand your company's mission, objectives, values, and expectations. Thus, you should identify the crucial characteristics of its environment and culture, including the team dynamics and relationship between the top and its employees.

For instance, you might strive to hire dozens of people in a short period or implement mass hiring, but if you're a small business, you must be careful about scaling up. That undertaking takes thorough preparation and consideration of how new employees will fit into your existing teams and workplace.

Hiring people who aren't a good culture fit could hinder your team's performance and productivity. Hence, you must think about the details and the profile of the candidates you will target.

2. Evaluate Your Existing and Potential Workforce

Understand who your employees are, their strengths, weaknesses, and potential. Tap into their skills and affinities and determine from what kind of training and L&D they would benefit and expand their capabilities.

According to that, you can also identify what skills and competencies you must look for externally and how they would benefit your company. Assess your organizational structure and include relevant demographic information in the analysis (e.g., grade levels, abilities, experience, age, occupations, retirement eligibility, and diversity). Run competency evaluations and compare the needs of your workforce to the available skills.

You can't define your starting point without identifying skills gaps and setting goals, as that's the only way to track and measure progress. Also, assess workforce data to understand your workforce's current activities and workloads.

These will help you identify the crucial programs, issues, capabilities, and priorities that are driving its structure. Moreover, this analysis will give you insights into whether the drive behind your talent needs is your long-term objectives or your current vacancies.

3. Identify Future Workforce Needs

Research your industry and what trends will impact it in the future. That will help you determine what your workforce might need in the coming years and how you could respond to their demands.

Consider the possible future workload, shortages, requirements, and skills imbalances. That will help you define the most effective hiring strategies and activities to close these gaps and address the pressing needs.

Keep in mind that this part includes identifying changes in strategic priorities, objectives, and missions. Moreover, it involves new types of programs, training, and work that could impact the skills your workforce will need, as well as their workload or jobs.

Think about the potential hiring surges, freezes, and outsourcing. Technology transformations often play a significant role in skills and work progress.

But customer demands and expectations also affect your workforce by causing process changes, different production times, and an urge for faster delivery. Include budgeting procedure requirements and funding sources in the analysis, as well as workforce projections and trends.

4. Determine Future Workforce Gaps Compared to Future Needs

Consider the needs that will appear in your industry in the future and measure them against the skills gaps that may hinder your workforce. For example, digital and IT capabilities could become non-negotiable in your sector in a few years, and your employees might not have the resources to acquire those competencies.

This step requires gap analysis, as this undertaking will help you understand the difference between what your company currently has and what it will need in the years ahead. The results will help you build your operational staffing plan.

The following are some of the questions you should consider:

• How available are vital talent capabilities and groups internally and externally?
• Why does your company have specific skills gaps?
• Are you developing and fostering skills and talents in crucial areas via employee training, and to what extent?
• Are you compiling relevant data on employee training, development, performance, mobility, and turnover?
• Have you defined how you will collect labor market data in areas essential for your business?
• Does your company have the necessary structure to minimize talent gaps and support internal employee mobility?

5. Take Action to Respond to Talent Shortages, Skills Mismatches, and Surpluses

Determine the actions you'll take to combat the lack of available job seekers, stay ahead of your competitors, and address abilities incompatible with your industry. Also, consider the steps you'll have to take if you have more employees with the same skills and knowledge but with only a few compatible projects and tasks.

Developing a well-rounded staffing plan is one of the best foundations for successful workforce planning. It will guide you in understanding your company's short-term needs, recruitment sources, and specific positions.

The positions you identify as crucial in the staffing plan should be central to your recruitment efforts. However, you should also create a Strategic Workforce Plan with a long range of up to seven years.

This plan would help you identify and follow your long-term hiring needs and align them with your talent and organizational goals. But it would require regular updates and improvements. Check out our guide to the best workforce planning tools to help you conduct workforce planning more efficiently.

LEARN MORE: 5 Best Practices for Using Recruitment Analytics in 2023

6. Leverage Technology

Technology can be the best support for your workforce planning efforts due to its rich features and possibilities. Since this undertaking requires understanding your workforce and identifying your ideal candidate profiles, you need AI-powered systems with analytics dashboards, reports, and relevant suggestions.

For instance, an ATS can help you identify job applicants matching your workforce planning projections and goals by allowing multi-language parsing resumes. That way, you will expand your outreach and attract diverse candidates outside the borders with abilities that can help you close your company's skills gaps.

Moreover, you can use AI recommendations and candidate scoring to find job applicants who meet your criteria and fit the company culture. AI-driven ATS will use intelligent filters to match candidates who fit your job requirements, expectations, and nice-to-haves.

READ MORE: How Recruiters Can Find & Win More Clients with a CRM

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7. Monitor and Analyze Actions

No matter what actions and initiatives you plan to introduce, you must have the means and strategies to track and evaluate them. Continuously monitor and evaluate progress toward closing the skills gaps and meeting the hiring goals you outlined in the short-term and long-term Workforce Plan.

Whenever a change occurs and makes an impact on your funding, positions, work priorities, or mission, update your plan and decide whether that demands a new approach. You might find that your workforce needs have changed over time, demanding revisions and different methods. Hence, never stop tracking the effect of your workforce planning strategies and the changes they bring to your company.

Otherwise, you will not understand the effect of your strategies and whether they require tweaks. However, it's important to mention that you should share the Workforce Planning analysis with your workforce, leadership, managers, and other relevant parties.

That will help you ensure that everyone is participating in decision-making and giving their input, resulting in more improvements and actionable insights. Collective decisions will also make it easier to understand potential shortfalls and determine the best response in case of challenges.

LEARN MORE: How to Turn Recruitment Analytics into Action

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Workforce planning helps your business make data-driven decisions, run smoothly, and reach desired objectives. It ensures you meet both your short-term and long-term hiring objectives while using your resources wisely and closing the workforce skills gaps.

Ultimately, workforce planning aims to ensure your recruitment processes are on point and that you're hiring the best people for your company. But that also requires reliable and comprehensive technology that will guide your decision-making and help you ensure the accuracy and effectiveness of your strategies.

Manatal's AI Recruitment Software has the features, functionalities, and tools to help you choose the most compatible people and support your workforce planning. Unlock your 14-day Free Trial and discover how this platform can empower your hiring activities and accelerate your efforts.