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Why does effective strategic workforce planning drive growth?
by Richard Schofield2nd Feb 2016
Strategic workforce planning – the alignment of the ‘people agenda’ with an organisation’s commercial strategy – is a much discussed topic within business – and for good reason. You may have thought that it fell mainly within the remit of larger organisations but, in fact, ambitious small and medium-sized enterprises (SMEs) are just as well placed to manipulate this tool in order to drive growth.
By predicting both the behaviours of internal employees and market demand fluctuations, the ability to map a coherent plan to overcome forecast skills gaps and bring in expertise can both bolster growth and help push an organisation into new markets. In its most sophisticated, yet still accessible form it can highlight where surpluses of talent are available, helping businesses to make better informed decisions about which geographies to target or avoid. It can also be used to model various possible commercial scenarios, in effect helping to ‘future proof’ an organisation – an invaluable asset in this increasingly unpredictable, fast-paced, globalised market.
Despite this, a 2014 Workday/Human Capital Institute survey of 400 professionals who deal with Strategic Workforce Planning within their business, revealed that 69% consider the function either an “essential” or “high” priority, but that only 44% actively engage in it. This is not because the tools to make it happen are not available – they are. Both internal data and industry trends are usually an excellent source of knowledge of individual jobs’ attrition rates, which can lead to a surprisingly detailed forecast of skills needed for the future. Technological tools can also be used to predict the likelihood of employees jumping ship and can assess the availability of external candidates. So why the disparity in numbers highlighted in the research?
Although an increasing proportion of businesses are recognising Strategic Workforce Planning’s place within their growth plans, it can still be daunting for an SME to implement and sustain effectively because of the perceived cost, complexity and time involved. As well as needing the support of a CEO – or at least, a board member – to drive the initiative and free up resources, the business’ HR specialist or specialists will also have a vital part to play. This is because they should be capable of providing reliable data regarding which employees are eligible for up-skilling/re-skilling, which are likely to move on over time, and what talent is likely to be available in the external market – either through their own resources or through partnering with an external talent acquisition and management specialist – helping to predict gaps within the workforce, which may open and close as market demand fluctuates. This type of data can also be used to implement a policy of growing your own internal talent, which can subsequently help to close projected managerial gaps in the future. Cost effective, dedicated technological platforms now make this possible for almost any size of rapidly growing company, although it is important to remember that while technology can be an extremely effective support and enabling tool it should not overshadow the input of your stakeholders – they also have real insight into the business’ needs.
One common misconception about a successful workforce plan is that it is rigid and set in stone when in fact almost exactly the opposite is the case; what might be needed for a business now may be totally different in five years’ time. Naturally, it is important to address the organisation’s most critical needs first, and not rush to implement an overarching strategy. This allows for progression and, critically, facilitates the avoidance of paying premium rates while trying to fill immediate skills gaps.
An effective plan must be adaptable and almost constantly fine-tuned in order to stay in line with market demand, new products and emerging markets – especially when reacting to or predicting competitors’ moves. In fact, it is intrinsically important to keep your competition at the very front of your mind when constructing a workforce strategy. It is highly likely that you will be fishing from the same talent pool down the line, and predicting skills gaps means that your business will be able to create pipelines and contacts within these areas long before anyone is needed on board. This provides the best chance of winning the top talent – and these acquisitions can be the difference in staying a head and shoulders above the rest.
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