Why a talent and skills strategy is key to an optimal workforce

Part of a productive workforce is effective workforce planning. And as a part of HR strategy, it can positively impact both the division’s profile as well as a business’ overall success.

Why do businesses need workforce planning?

While HR leaders are accustomed to responding to the needs of organisations, the timeline from planning to action has shrunk rapidly as volatility in the market continues. HR leaders now need to respond quickly to changes and to do so, they have to identify gaps within their organisation and address them early.

For example, with the ongoing skills shortage, talent retention and acquisition is key for HR leaders. Whether it is to hire for a recent vacant position, recruit for a growing workforce or manage employee engagement and growth, being able to address these issues readily is crucial to ensure an engaged workforce. But it also helps to avoid under- or over-staffing and to support hiring employees with appropriate levels of knowledge, skills and experience. Hiring for the sake of filling a vacancy quickly may result in hiring an inappropriate person, which could lead to unnecessarily high expenses and low productivity and morale.

Importantly, incorporating a workforce planning strategy can help companies respond to emerging economic or technological trends that disrupt the workplace, and to build realistic business plans. This includes the more difficult decisions of having to either freeze hiring or even make redundancies. Specifically, it helps HR bring data to the finance team and other executive stakeholders who are ultimately tasked with those hard decisions. Companies that take this approach are more likely to experience overall success by balancing strategic control and care of staffing with business requirements.

Every department within an organisation can benefit from effective workforce planning as it helps to reduce extraneous spending, eliminate inefficient hiring practices, and enable accurate predictions of future job developments.

So, the question now is simply: how do you create an effective workforce planning program? While the HR and finance teams are the main drivers of workforce planning, executives, department leaders and hiring managers need to collaborate for the strategy to be well executed.

1. Create a cross-functional planning process

First, HR, finance, and hiring teams must work in partnership to create a central strategy that outlines the workforce planning timeline, methodology and objectives. This plan will help to identify new roles or eliminate old ones, and then map out a specific action plan for recruiting, hiring, training and retaining talent. A central strategy will help leaders maintain direction through the process.

An effective workforce planning process should be led and managed by a designated HR team and be composed of high-level executives from each business area, including operations and legal stakeholders.

2. Address gaps between current and future workforce

Consider conducting a gap analysis to assess what roles and skillsets you need. Organisations will then be in a better position to determine whether reskilling and/or upskilling can be a potential solution to help fill gaps. Upskilling can help employees become more skilled and relevant in their current position, or to learn new skills to perform a different role within the organisation.

HR leaders need to think long term by making sure employees are prepared for future roles to support continuous business functioning.

Succession planning is also an effective way to minimise the gap between current and future needs. Including a succession strategy and key metrics as part of overall workforce planning can help provide organisations with a ready pool of talent to tap into when vacancies resulting from retirement, resignations or transfers emerge, minimising potential disruptions.

3. Make workforce planning an ongoing process

With change happening at an ever-increasing rate, an operative planning system must be agile and adapt in real time to both external and internal needs. This effort can no longer be an annual event. Representatives from different teams need to meet regularly and provide any updates to build a holistic picture of the present and future job evolution.

By frequently re-evaluating the plan, organisations will be able to account for the company’s natural growth as well as adapt to the ever-changing business landscape. Headcount planning should also always factor in geo-expansion where relevant.

4. Evaluate workforce planning effectiveness

It is crucial for businesses to have the right tools in place for workforce planning to be carried out smoothly. Workforce planning tools assist organisations in leveraging their existing data to create accurate forecasts, run predictive models, and help plan, track and implement changes in the workforce. A cloud-based platform that includes fast and easy workforce planning options, such as easily collecting and analysing data on employee skills and experience, will allow organisations to gain a better understanding of their workforce.

Implementing an effective and agile workforce-planning process can create an optimally staffed and trained workforce that can respond to the needs of the business and minimise risk from unforeseen disruptions. By planning ahead, organisations can successfully futureproof their workforce and build a robust business with a positive workplace culture, regardless of market conditions.

Damien Andreasen is ANZ head of region at HiBob.