what is strategic workforce planning, and why is it important to large-volume employers?

Strategic workforce planning means making sure you’ve got the right people with the right skills in the right places at the right time to meet your company’s long-term business goals. It involves continuously assessing your organization’s current and future talent needs and then developing, implementing and monitoring a plan to meet those needs.

Chances are, your company is already doing some form of workforce supply planning. The real question is: do you have a well-structured strategic workforce planning strategy that’s not only delivering results today but also preparing your business for the future?

Even if you’ve got a plan, when was the last time you updated it? The current market is changing fast, with tight labor conditions, evolving worker expectations and new technologies constantly emerging. Your plan needs to keep up to ensure you’re ready for future talent gaps and shifting workforce supply needs.

For businesses handling a large workforce, having a strategic workforce planning strategy in place is crucial. Without it, staying competitive and meeting your overall business strategy goals could be an uphill battle.

operational vs strategic workforce planning

There are two key components to effective workforce planning: operational workforce planning and strategic workforce planning. While both are essential to your company’s success, they differ in scope, objectives and timelines. Understanding how these types of planning fit together is essential to meet both short- and long-term needs.

operational workforce planning

Operational workforce planning focuses on your company’s immediate needs. This type of planning involves managing the day-to-day operations, such as filling job vacancies and setting shift schedules. It is often handled by operational managers and the HR department to address immediate staffing gaps.

strategic workforce planning

On the other hand, strategic workforce planning is long-term. It focuses on aligning workforce needs with the company’s overall business strategy and long-term business goals. This process includes forecasting future skills gaps, identifying emerging competencies and developing a plan to acquire or train for the right skills over the next two, five or 10 years.

In times of staffing gaps and other talent challenges, it can be tempting to focus solely on operational workforce planning. However, without a strategic workforce planning strategy, your company may miss out on long-term growth opportunities.

advantages of strategic workforce planning

When done right, strategic workforce planning offers several benefits that help your company prepare for future success. Below are some key advantages:

prepare for current and future needs

One of the biggest advantages of strategic workforce planning is how it helps align your workforce with your overall business strategy. Take industries like manufacturing or tech, for example — where future skills gaps are a real concern. Workforce planning lets these companies stay ahead of the curve by addressing the growing need for talent that’s ready to work with new technologies. Whether it’s through hiring or succession planning, this strategy ensures your business has the right people with the right skills in place to meet future demands.

narrow the skills gap

The skills shortage remains one of the most pressing challenges for employers today. Research from Randstad found that 52 percent of CEOs cite skills gaps as a barrier to profitability. As workplace technologies evolve, even entry-level workers are required to have some tech-related competencies. Without a comprehensive strategic workforce planning approach, your company could be unprepared for future demands, increasing the pressure to fill staffing gaps and meet productivity goals.

build an agile, flexible workforce

If COVID-19 and its aftermath taught employers anything, it’s the need to build an agile and flexible workforce. Moving forward, it’s critical for employers to have a workforce that they can scale up and down upon demand. Contingent workers can offer this benefit, but only if your company has a plan in place to maximize the use of this flexible workforce. Now is the time to develop a strong workforce planning strategy that allows you to build an agile workforce of contingent workers that can shift with production demands.

drive business growth

Executed well, workforce planning can deliver a great ROI. It not only improves hiring outcomes and cuts recruitment costs, but it also boosts productivity by reducing delays and making sure you’ve got the talent and skills your company needs. All of this leads to significant cost savings for your organization.

However, while these savings can help your business grow, the skills gap could hold you back. A strong workforce planning strategy helps you identify and acquire the skills your company needs—both now and in the future — so you can make the most of technology and automation to keep your business running smoothly and continue growing.

enhance operational efficiencies

For businesses to perform at their best, everything needs to be in sync — equipment, supplies, logistics, and most importantly, talent. If even one of these areas falls short, it can throw everything else off. For example, high absenteeism or frequent tardiness can slow down production or affect quality control, even if your equipment and logistics are running smoothly. That’s where workforce planning comes in. It helps you develop strategies to tackle these kinds of issues and boost your company’s overall efficiency.

Of course, implementing workforce planning requires time and effort, and it may come with upfront costs. However, the long-term benefits — like avoiding production delays and ensuring everything works together smoothly — typically outweigh these challenges, leading to better operational efficiencies for your business.

5 steps of the workforce planning process

Workforce planning requires collaboration between executives, HR teams, finance, shift supervisors, line leaders and any other key players. It’s not a set-it-and-forget-it strategy but rather an ongoing process. Below is a look at the five main steps of the workforce planning model.

1. align workforce planning with business objectives

The first step in any business strategy is setting clear goals. When it comes to workforce planning, it’s important to make sure those goals align with your company’s overall business objectives. Start by thinking about where your company is headed over the next one, three, five, seven and 10 years. For example:

• Are there new products or services in the pipeline?
• Is the company planning a restructuring?
• Are you expecting a wave of retirements soon?
• What investments are being made in technology or automation?
• Are there plans to open a new location or add a shift that requires more workers?

Answering these questions will help you develop a workforce planning strategy that supports these goals. If your workforce goals aren’t aligned with your business goals, your efforts could end up working against the company rather than helping it succeed.

2. conduct a workforce analysis

The next step in the workforce planning process is to take a good look at the current skills and competencies in your workforce. You’ll also want to figure out what skills and talents your company needs now and in the years ahead. To do this, conduct a workforce analysis by comparing the skills your team already has with the ones your company will need in the future.

3. develop an action plan

With the information from your workforce analysis, your team can develop a workforce planning strategy to acquire these needed skills, competencies and talents. For example, you can develop a robust hiring strategy that identifies and attracts qualified talent or create a training and development program to equip your current workers with the skills your company needs.

4. execute the action plan

Executing your workforce planning strategy can be the most difficult step in the workforce planning process. This is especially true if you haven’t secured support from all key players, including executives, managers, supervisors and other workers. Communication is vital. The better you can communicate your plan and its importance to both the company’s future and individual workers’ careers, the more likely these key players are to help with the implementation process.

5. assess and adjust

For workforce planning to provide long-term benefits, it must be assessed, monitored and adjusted on a continuous basis. Set clear milestones and metrics to gauge the success of your strategy. This step will help your team determine if the current strategy is meeting company objectives or if adjustments are necessary.

As mentioned above, workforce planning is not a stagnant strategy. Rather, your team should repeat these five steps on a periodic basis to ensure your current strategy is still meeting the company’s goals and objectives.

By following these steps, you can build a workforce that is not only capable of meeting today’s needs but is also prepared for tomorrow’s challenges. Developing a strategic workforce planning strategy today ensures your company has the right people with the right skills in the right places to achieve long-term success.