Strategic Workforce Planning: Unlocking Future Success

Overview: Strategic Workforce Planning

In today’s rapidly changing world, businesses need to be able to adapt quickly to new challenges and opportunities. This is where strategic workforce planning comes in. Strategic workforce planning is the process of aligning your organization’s workforce with its business goals. It involves forecasting future workforce needs, identifying potential gaps, and developing strategies to fill those gaps.

A well-executed strategic workforce plan can help your organization:

• Attract and retain top talent
• Improve employee engagement and productivity
• Reduce costs
• Increase innovation
• Stay ahead of the competition

If you’re looking to ensure that your organization has the right people in the right places at the right time, then strategic workforce planning is essential.

Here are some of the key benefits of strategic workforce planning:

• Increased alignment between workforce and business goals
• Improved decision-making about talent acquisition, development, and retention
• Reduced risk of workforce shortages or surpluses
• Increased agility and responsiveness to change
• Improved employee engagement and productivity
• Increased competitiveness

If you’re not already doing strategic workforce planning, now is the time to start. It’s an essential investment in the future of your organization.

How do you do strategic workforce planning?

This guide serves as an introduction to the concept of workforce planning and provides an overview of the essential steps involved in executing it effectively. The guide examines the primary stages encompassed within workforce planning and furnishes a practical framework for devising a comprehensive strategy, complemented by illustrative examples that serve as guiding beacons for practical application.

The guide outlines the development of a workforce plan through the delineation of two distinct methodologies: a six-stage planning framework and a seven-fold ‘rights’ principle. The six-stage planning framework presents a sequential approach to executing workforce planning, ensuring that each stage is conducted in a well-ordered manner. Conversely, the seven ‘rights’ principle identifies seven critical facets of the business that warrant consideration during the planning process.

Human resources professionals can utilize this guide to structure their strategic workforce planning endeavors. This tool empowers them to proactively identify potential workforce-related challenges that may emerge in the future. Furthermore, the guide enables practitioners to formulate and implement appropriate measures that ensure organizational preparedness and success.

Should you require further details or guidance on the specifics of either methodology, please do not hesitate to inquire.

What is workforce planning?

Workforce planning is a dynamic and ongoing process that is used interchangeably with strategic workforce planning in this guide. The distinction between these terms lies in the time horizons they encompass. Workforce planning primarily revolves around existing resource headcount plans and operational strategies for the upcoming budget year. In contrast, strategic workforce planning extends its gaze toward a more expansive time frame of three to five years. As you delve into this guide and engage in interventions or analyses, it’s crucial to discern the most pertinent time horizon within your specific context. This discernment will facilitate the effective application of the insights and recommendations found in the guide.

At its core, workforce planning is a collaborative endeavor embraced by the entire organization and empowered by HR. This process thrives on interconnection rather than isolation. To thrive in this domain, one must comprehend the requisites and apprehensions of diverse stakeholders entangled in workforce planning. Identifying these stakeholders and cultivating robust relationships with them is a pivotal pursuit. The essence of workforce planning is characterized by agility, evidence-based decision-making, and analytical rigor. By scrutinizing your prevailing workforce configuration and envisioning future workforce demands, you unveil the chasm existing between your current human capital and your impending requirements. Subsequently, you can introduce apt solutions to bridge this divide, thereby enabling your organization to align with its strategic aspirations.

An intriguing facet of workforce planning is its seamless integration with other HR interventions. This harmonization encompasses domains such as organizational development, talent management, recruitment and retention, succession planning, learning and development, and career progression.

Strategic workforce planning, on the other hand, adopts a comprehensive approach. It entails a thorough assessment and analysis of internal business catalysts and objectives. This strategic approach serves as scaffolding for organizations of varying sizes to confront the intricate challenges they encounter within convoluted and uncertain circumstances. Consequently, organizations are impelled to consistently reevaluate their long-term strategies concerning talent acquisition and critical skill cultivation. By formulating a robust people-centric strategy, organizations can safeguard a reservoir of skills and labor, perpetuating their ability to fulfill business objectives even when confronted with anticipated or unforeseen changes.

What is driving your need for workforce planning?

The impetus behind your requirement for workforce planning stems from several driving factors that necessitate your attention. A clear comprehension of your organization’s strategy and the contributing elements driving the demand for workforce plans is essential. Achieving this comprehension entails embarking on an assessment encompassing both external and internal dimensions.

The first facet entails conducting an external analysis, delving into labor market trends and dynamics. By scrutinizing the trends prevailing in the labor market, you can glean insights into the evolving landscape of talent acquisition and management. This enables you to align your workforce planning with the broader external context, ensuring that your strategies remain attuned to prevailing conditions.

Simultaneously, an internal analysis is indispensable. This involves peering into your organization’s inner workings, assessing its current workforce configuration, and anticipating its future needs. To facilitate this analysis, a constructive approach is to engage organizational leaders and solicit their narratives. Encourage them to recount instances where the absence of effective workforce planning yielded unfavorable consequences. These anecdotes could include scenarios such as the implementation of costly redundancy programs followed by the subsequent rehiring of personnel at elevated consulting rates. By harnessing these stories, you can underscore the tangible repercussions of inadequate workforce planning, reinforcing the importance of proactive measures.

While gazing into the future remains elusive, the value of workforce planning lies in its preparatory function. It equips you to navigate diverse potential futures by building adaptable strategies. By staying abreast of external trends and cultivating an internal understanding, you empower your organization to thrive amid uncertainty, embracing agility and resilience in the face of change.

Why is workforce planning beneficial?

Workforce planning serves as a tool for pinpointing business challenges and deducing their implications for your workforce, subsequently translating these insights into tailor-made solutions. It transcends the mere creation of plans; its essence lies in the identification and, in certain instances, cultivation of an adept workforce that can effectively drive organizational outcomes.

The advantages of a methodical approach to workforce planning encompass a range of benefits that empower organizations to:

• Assure Timely Talent Availability: By engaging in workforce planning, you ensure that the right talent is at your disposal precisely when it’s needed, minimizing gaps and bottlenecks in critical roles.
• Embrace Future Preparedness: Through anticipatory analysis and planning, workforce planning equips organizations to proactively prepare for impending changes, fostering adaptability and resilience in the face of uncertainties.
• Cultivate Agility and Alignment: The systematic approach to workforce planning enables organizations to enhance their agility by harmonizing processes and organizational priorities. This alignment is instrumental in swiftly adapting to shifting demands.
• Mitigate Workforce-Related Risks: Workforce planning serves as a shield against existing and potential workforce-related risks. By understanding and addressing these risks, organizations can avert potential disruptions.

As delineated, both workforce planning and strategic workforce planning manifest at distinct levels within organizations, with their analytical focus and planning endeavors contingent upon the level of operation:

• Macro Level: This realm encompasses the panoramic view, where holistic, long-term strategic plans spanning three to five years are formulated for the entire organization. The horizon here is broad, focusing on overarching strategies that shape the organization’s trajectory.
• Meso Level: This tier revolves around intermediate or operational plans that span the forthcoming year, synchronizing with the upcoming financial budget. These plans bridge the gap between overarching strategies and immediate operational needs.
• Microlevel: Here, attention converges on short-term resource plans. This involves addressing immediate requisites, like plugging recruitment gaps and catering to pressing demands.

By harmonizing your analytical thought and planning activities with the appropriate level, you maximize the efficacy of your workforce planning efforts, ensuring that your organization remains strategically aligned, operationally agile, and equipped to weather the tides of change.

What techniques and instruments support workforce planning?

The foundation of workforce planning rests upon achieving a harmonious equilibrium among the seven fundamental principles, aptly referred to as the ‘seven rights’ of workforce planning. This synthesis is not a one-size-fits-all endeavor; it necessitates custom tailoring to align with the unique composition and operational context of each organization. Reflecting upon and discussing these seven elements within the ‘seven rights’ framework empowers organizations to adopt a proactive stance when shaping their workforce blueprint. Let’s delve into the intricacies of each principle:

1. Right Capability: This revolves around evaluating the existing competencies and skills while forecasting the future requirements. Ensuring that you possess the appropriate core skills and capabilities to bridge the existing and upcoming gaps is paramount.
2. Right Size: This principle pertains to maintaining an optimal headcount or personnel quantity that’s aligned with the required capabilities. Striking a balance between numbers and capabilities is key.
3. Right Shape: Here, the focus is on achieving an ideal workforce composition encompassing structure, roles, and demographic diversity. By maintaining a fitting blend of managers, professionals, and administrative staff, you avoid redundancy and inefficiency.
4. Right Location: Geographical and structural alignment are crucial, ensuring that your workforce is positioned where needed. The availability of suitable capabilities at the right locations to cater to both current and future demands is a cornerstone. Exploring options such as strategic hubs, offshoring, insourcing, and hybrid work arrangements can enhance this alignment.
5. Right Time: Timeliness is central; having the appropriate individuals at the required time for the stipulated duration is pivotal. Analyze the need for fresh talent and novel skills, and align them with the pertinent timeframes.
6. Right Cost: Financial considerations play a significant role in workforce decisions. Accounting for costs related to compensation, training, recruitment, and outsourcing is essential. A balanced focus on costs ensures sustainable workforce management.
7. Right Risk: This principle encompasses assessing workforce-related risks, such as retirements and attrition predictions. Gauging the consequences of vacancies and inadequate personnel in relation to organizational goals is vital.

By embracing and harmonizing these seven ‘rights,’ organizations lay a solid foundation for effective workforce planning. Reflecting on the most challenging ‘rights’ to master and prioritizing the pertinent ones empowers organizations to navigate this intricate landscape adeptly.

Stage 1: Baseline

What is it? The initial phase of your workforce planning process involves establishing the baseline. This pivotal stage revolves around acknowledging the external pressures exerted on the labor market, the evolving nature of work, your current organizational priorities, and the internal breakdown of talent within your organization. Moreover, it entails a critical reevaluation of the organization itself. A fundamental prerequisite for this stage is gaining a comprehensive grasp of your current workforce composition and comprehending your organization’s operating model, strategic direction, and workforce dynamics. Without such insight, effectively planning for forthcoming changes becomes an intricate task.

Why is it important? The significance of comprehending your baseline lies in its ability to provide an overview of the external and internal factors that impact your organization’s trajectory. External factors comprise uncontrollable influences originating from the external environment that challenge your organization’s capabilities. These encompass political, economic, technological, legal, and environmental influences. On the other hand, internal factors denote elements that your organization can control, such as growth ambitions, budgetary constraints, and planned organizational changes. These changes might encompass the introduction of new products or services.

What can you do? PESTLE Analysis: A potent tool to identify external pressures is the PESTLE analysis. It stands as one of the most effective frameworks for gaining insight into the broader contextual landscape in which your organization operates. Prioritizing horizon-scanning activities is crucial in comprehending the driving forces that could potentially shape the organization’s trajectory.

The PESTLE analysis investigates six pivotal factors: political, Economic, Sociological, Technological, Legal, and Environmental. Vigilantly monitoring and assessing the impact of each of these external factors empowers you to cultivate informed business strategies and plans. For further guidance on how to execute a PESTLE analysis, refer to the CIPD factsheet on the subject.

Carrying out a Simple SWOT Analysis alongside a PESTLE Analysis

In tandem with a PESTLE analysis, engaging in a straightforward SWOT analysis proves valuable in identifying internal components during the baseline stage. This dual analytical approach facilitates the identification of organizational strengths, potential opportunities, and potential threats that your organization might face.

While a PESTLE analysis delves into external factors that shape your organizational landscape, a SWOT analysis brings into focus your internal attributes. By assessing your strengths, weaknesses, opportunities, and threats, you gain a comprehensive view of your organization’s internal dynamics.

The interplay between these external and internal factors forms a matrix of issues that influence your organizational strategy. This intricate intermingling ultimately impacts the direction and success of your workforce planning efforts.

How It Benefits You

Conducting these analyses provides a framework for identifying critical aspects within your organization. This includes recognizing strengths that can be leveraged, opportunities that can be seized, and threats that require mitigation. Through this process, you also lay the groundwork for identifying critical roles within your organization.

Identifying Critical Roles

Understanding critical roles is pivotal. These roles are the linchpins that uphold your organizational structure and strategy. The insights gleaned from the analyses assist in pinpointing these roles, thereby facilitating the prioritization of further actions.

In subsequent sections of this guide, you will delve deeper into critical roles and the strategies to ensure their effectiveness within your workforce planning initiatives.

1. Where Does Data Sit?

Data serves as the bedrock of effective workforce planning, but pinpointing its location and assessing its accessibility is paramount. Data can be sourced from various outlets, such as organizational records, published research reports, and stakeholder consultations. Understand where to extract pertinent data – is it stored in a single repository or scattered across multiple systems? Is direct access possible, or must it be obtained through intermediaries? Does the data reside within standalone reports, or does it necessitate amalgamation from disparate sources?

2. What is the quality / reliability?

While data empowers decision-making, its credibility and reliability merit a thorough evaluation. Recognize the risks associated with building assumptions based on data quality. Delve into known issues affecting data quality and reliability. It’s imperative to acknowledge the assumptions underpinning your analyses and decisions.

3. How Often Does It Change?

Contextualize your timeframes—are they immediate, mid-term, or long-term? Align this with data currency needs. Establish the frequency of data updates – when was it last refreshed? Understanding these temporal dynamics ensures your workforce planning remains attuned to evolving realities.

4. What Are the Gaps?

Detect gaps within your data landscape and collaborate with key stakeholders to define acceptable parameters. Acknowledge any known gaps within specific datasets. Scrutinize for outright data deficiencies. Agreement on the scope of workable data is pivotal.

Where to Look for Data Sources

Numerous avenues within your organization yield employee data:

• Seek updated HR records directly from employees.
• Monitor record updates and compliance, ensuring data integrity.
• Administer surveys (voluntary or mandatory) through external platforms like SurveyMonkey.
• Audit HR records, confirming compliance with legal requirements (e.g., right-to-work checks).

Gaining Deeper Workforce Insights

After grasping your organizational and workforce dynamics, segment your data to spotlight pivotal roles and their impact on organizational performance. Possible segments include demographics, structures, hierarchy levels, job families, roles, competencies, and contract types. Gaining insights into your workforce’s composition empowers gap identification.

Segmenting by Skills and Value

Further segment your workforce based on skills and value contribution. Assess the uniqueness of these skills vis-à-vis your organization’s needs. Appraise the value these skills add, fostering your organization’s success. Proceed to determine critical roles based on their influence.

Critical Role Analysis

To adopt a forward-looking approach, identify strategic and critical roles that will significantly drive organizational value. Conduct comprehensive analyses of these roles and discern the attributes contributing to their success, including qualifications, skills, knowledge, and experience.

You can identify critical roles by analyzing their impact and ability to deliver your strategic goals by asking three key questions:

When engaging in the assessment of critical roles, take into consideration the following factors:

• Impact on Business: Identify roles that have a potent impact on your business. Concentrate on roles that, if vacated today, would immediately and significantly disrupt your organization’s operations.
• Unique Skillset or Knowledge: Scrutinize roles that possess a distinctive skillset or knowledge base vital for executing your business strategy. Analyze the specific attributes that render these roles critical or exclusive to your organization, both in the present and future contexts.
• Internal Bench Strength: Evaluate roles that display weak internal succession prospects. Gauge the timeline required for an internal candidate to be sufficiently prepared to assume the role.
• External Candidate Availability: Examine roles where external candidate availability is scant. Assess the challenges associated with securing external candidates to fill these crucial positions.
• Urgent Filling Needs: Identify roles that necessitate immediate attention. Base this assessment on previous discussions and the eligibility of incumbents for retirement. Indicate the anticipated urgency in filling these positions.

Engaging in a basic critical role analysis within your organization involves several steps:

1. Role Identification: Identify the role in question. Determine if it holds a unique position within your organization. Ascertain the extent to which it contributes to strategic development and its seniority level.
2. Reason for Criticality: Probe why this role holds critical importance. Is it a role that only one individual can effectively perform? Does the occupant possess specialized knowledge that is challenging to replace?
3. Current Workforce Demographics: Examine the demographics of the current workforce in this role. Evaluate whether there are other individuals internally possessing the requisite skillset. Gauge the number of potential internal candidates who could either directly fit the role or be upskilled to do so.
4. External Perspective: Consider the external landscape. Is the role a rarity in the job market, making it difficult to source suitable candidates?

By addressing these aspects, you can holistically assess the criticality of various roles within your organization. This analysis not only aids in identifying key positions but also in comprehending the reasons behind their significance. It provides a foundational understanding for strategic workforce planning, ensuring that your organization’s essential functions remain well-supported and resilient in the face of challenges.

Stage 2: Supply

Workforce Supply: Understanding and Managing

What is it? The concept of workforce supply encompasses various dimensions, including labor availability, quantity, role specifications, required skills, and the timeframe needed to align with business demands.

Why is it important? Effectively managing workforce supply is an integral aspect of workforce planning. It involves not only handling the existing talent pool but also attracting and managing new talent. Awareness of contemporary shifts in work dynamics and organizational structures is crucial to adeptly managing your workforce supply. It entails evaluating your workforce requirements and determining if you possess an internal reservoir of talent to fulfill those demands. Forecasting assumes significance at this stage, as does comprehending the broader labor market trends. Accurate internal supply forecasts enable the identification and closure of risks. This insight allows organizations to proactively address potential workforce gaps, minimizing disruptions to business continuity. By forecasting your talent supply, you can strategically allocate resources for crucial roles, prioritizing those that are hard to fill externally.

What can you do?

Assess Your Workforce Supply: You can gauge your workforce needs quantitatively by evaluating the supply through job roles, considering factors such as turnover, retirements, and internal job shifts. Qualitatively, you can assess the capability and performance of current job incumbents. To ensure an effective workforce supply, address these key areas:

• Evaluate the efficacy of your policies and processes in attracting and sourcing the needed talent.
• Gauge the strength of your employer brand in attracting and retaining talent, both within the organization and externally.
• Measure the effectiveness of your talent development initiatives in nurturing existing talent and building a future pool of successors.
• Examine how well your reward and recognition policies retain the required talent.
• Anticipate whether talent supply might become a challenge for your organization in the future.

Review the Labor Market: The labor market pertains to the work people currently engaged in within your organization and their geographical locations. To assess the labor market, ask these questions:

• Where do current employees performing similar roles reside?
• What distances do they travel to work?
• Are there other potential areas from which people could be willing to commute?
• When you’ve recently filled positions, what were candidates doing before, and where did they come from?
• When individuals have left your organization, where have they gone? In other words, what types of employers in which locations have they joined?

By conducting this assessment, you gain insights into the dynamics of the labor market, which guide your strategies for attracting and retaining the talent necessary for your organization’s success. Understanding workforce supply and its intricacies facilitates strategic planning that aligns your talent needs with your business objectives.

Stage 3: Demand

Workforce Demand: Understanding and Estimating

What is it? The term “workforce demand” refers to the labor required by an organization to achieve its future business goals. Establishing a robust and practical equilibrium between supply and demand is a challenging aspect of creating a strategic workforce plan, particularly in the presence of uncertainty.

Why is it important? Workforce demand planning is pivotal in recognizing the structure and drivers of demand, as well as anticipating future workforce needs. This phase allows for the creation of a more accurate and informed plan. It empowers organizations to make data-driven staffing decisions and assess potential changes that could influence staffing levels.

What can you do?

Engage with Senior Leaders: To analyze workforce demand, collaborate with senior leaders to acquire insights into the following areas:

• Your organization’s strategic vision: Understand the plans for the next five years, including potential transformative changes such as outsourcing or adopting new systems.
• Business growth ambitions: Comprehend plans for growth, acquisitions, restructuring, or operational reductions in various areas.
• Customer requirements: Identify what distinguishes your organization and how it responds to marketplace trends to deliver value and meet customer needs.
• Regulatory considerations: Recognize existing or forthcoming legal frameworks that could impact your organization’s operations.
• Potential for process improvement and transformation: Explore plans for automation, digital transformation, and how these initiatives can address skills shortages.
• Relevance of technical innovation: Align your talent strategy with technological advancements and evolving business models.

Estimate Workforce Requirements: Various methods can be employed to estimate workforce requirements, depending on the organization’s size and nature:

• Asking: Seek input from managers and department heads to gauge their projected needs and timelines.
• Budget-based: Determine workforce numbers based on the budget allocated for specific areas of work. This method is straightforward but doesn’t necessarily optimize resource allocation.
• Ratios: Utilize ratios between employees and activity levels, or between different employee groups, especially in stable environments.
• Benchmarking: Compare ratios or costs within your organization or across different organizations. This method raises questions but may not reflect best practices.
• Extrapolating Trends: Forecast based on historical productivity increases, assuming these trends will continue. Suitable for longer product/service cycles with stable technology.
• Forecasting: Employ sophisticated models that consider factors like seasonal demand variations. Useful for high-level planning, but accuracy relies on assumptions.
• Workflow Analysis: Analyze tasks for each role, useful during transformational changes where roles and capabilities may shift.
• Defining Job Families: Group roles with similar competencies together, minimizing training required to perform different roles within the same family.
• Zero-base Demand Estimation: Estimate ideal workforce needs instead of simply extrapolating from the current workforce. This approach encourages innovative thinking.
• Scenario Planning: Address uncertainty by exploring multiple future scenarios. Useful for assessing the risks associated with various organizational futures.

Combining these methods can provide a comprehensive view. It’s important to consider workforce costs while accounting for potential changes in work methods and productivity. As workforce demand estimates guide your strategic planning, a thoughtful and tailored approach ensures alignment with your organizational goals and the evolving landscape.

Stage 4: Gap analysis

Gap Analysis: Bridging the Workforce Divide

What is it? Gap analysis involves evaluating the variance between workforce supply and demand – essentially, it’s a comparison between the available workforce in your organization and the workforce required for the future. This analysis aims to quantify the differences and challenges between your existing workforce and the envisioned future state.

Why is it important? Gap analysis holds significance as it enables the identification of disparities or surpluses between your current status and the envisioned future. As depicted in Figure 4, this disparity evolves over time, providing insights into the potential quantity of personnel needed. If no action is taken, the gap between your current workforce and the required workforce will widen. An accurate interpretation of this gap empowers you to prioritize and concentrate your efforts on your action plan.

Importance of Gap Analysis:

1. Identifying Disparities: Gap analysis uncovers disparities between your current workforce resources and your future needs. This clear understanding is crucial for informed decision-making.
2. Strategic Planning: The analysis aids in crafting a strategic plan by highlighting where you need to augment or adjust your workforce resources to align with organizational goals.
3. Focused Prioritization: By recognizing gaps, you can prioritize resource allocation and interventions effectively, ensuring you address critical areas first.
4. Preventing Shortages: The analysis serves as a proactive measure to mitigate workforce shortages. It enables you to anticipate and act ahead of time.
5. Resource Allocation: Understanding workforce gaps guides the allocation of resources toward recruitment, training, and development to bridge the divide.

Ongoing Process: Gap analysis is not a one-time endeavor. It requires regular review to adapt to changing circumstances. Depending on your organization’s needs and the analysis conducted, review periods may vary. The evolving nature of workforce dynamics necessitates periodic reassessment to ensure alignment between your available resources and your future needs.

Implementing Gap Analysis: Taking Informed Action

What can you do?

Deconstruct Your Gap Analysis: As you conduct a gap analysis, delve into the following inquiries:

• Current Gap Management: Identify current gaps between supply and demand and understand how these gaps are being managed. Are you relying more on contractors or external resources to bridge these gaps?
• Future Gap Management: Pinpoint projected gaps between supply and demand for the future. Determine the strategies in place to manage these gaps. Are you planning to ramp up hiring or focus on extensive training initiatives?

Address Key Areas: Post gap analysis, attend to these critical aspects:

• Availability Lower Than Need: Address areas where the expected availability of personnel falls short of your requirements. Consider methods such as hiring, upskilling, or internal development to bridge these gaps. Solutions might involve overcoming recruitment challenges or filling gaps through secondments.
• Negative Gaps: For cases with a surplus, where you have more personnel in certain groups or locations than needed, consider options like redundancy, relocation, or redeployment to align resources with demand shifts.
• Skills Gaps: Tackle critical skills gaps by initiating training or reskilling initiatives. Over time, this might necessitate a shift in the type of workforce you employ.
• Business as Usual: Identify areas requiring continuous action, where recruitment, staff development, and redeployment are essential to maintaining alignment with evolving business needs.
• Resource Challenges: Address workforce groups or roles where recruitment and retention present challenges. Explore alternative resourcing approaches, particularly for roles where sourcing talent proves difficult.
• Workforce Reductions: In certain scenarios, workforce reductions may be necessary due to shifts in demand or organizational restructuring. Ensuring these reductions are well-managed is crucial.
• Change in People and Skills Needs: If the business strategy undergoes significant shifts, be prepared for corresponding changes in people and skills requirements. Adapting to new approaches, technologies, or cost-saving measures might reshape your talent landscape.
• Relocation and Outsourcing: In more extreme cases, resourcing challenges might prompt consideration of major changes such as relocating operations or outsourcing certain functions.

Strategic Action: Gap analysis not only uncovers discrepancies but also guides the actions you should take. It aids in resource allocation, workforce planning, and aligning your talent strategy with your organization’s future trajectory. By systematically addressing the key areas identified through gap analysis, you lay the foundation for a more resilient and adaptable workforce that can meet evolving business needs

Stage 5: Action plan

Creating an Action Plan: Navigating the 7Bs Framework

What is it? The action plan is the strategic blueprint for bridging the skills and capability gaps identified between workforce supply and demand. It involves devising effective methods to close these gaps and ensure that your organization has the right talent to meet its future needs.

The 7Bs Framework: Dave Ulrich and other HR thought leaders introduced the 7Bs framework, which offers a structured approach for HR and business leaders to explore various avenues for addressing workforce gaps. This framework comprises five talent management levers (buy, build, borrow, bind, and bounce) and two demand optimization levers (bot and balance). These levers are collectively known as the “7Bs”.

The Five Talent Management Levers:

1. Buy: Procure external talent by recruiting individuals with the required skills and competencies from the labor market.
2. Build: Invest in developing your existing workforce’s skills and capabilities through training, upskilling, and educational programs.
3. Borrow: Leverage temporary workforce solutions, such as contractors, freelancers, or consultants, to fill immediate gaps in your talent pool.
4. Bind: Foster employee engagement, retention, and loyalty by creating an environment where employees feel valued and motivated to stay with the organization.
5. Bounce: Implement strategies to reassign or redeploy employees within the organization, ensuring that existing talents are utilized in areas of high demand.

The Two Demand Optimization Levers:

1. Bot: Employ automation, technology, or artificial intelligence to optimize workflows and reduce the demand for certain human roles.
2. Balance: Manage workloads and allocate tasks effectively to achieve a balance between the existing workforce and the workload demand.

Creating the Action Plan:

• Identify the specific gaps and challenges in your workforce.
• Based on the 7Bs framework, determine which levers are most applicable to your organization’s context.
• Develop targeted strategies for each lever to address the identified gaps.
• Prioritize actions based on the criticality of the gaps and the potential impact of each lever.
• Ensure alignment with your organization’s overall goals and strategic vision.
• Establish timelines, responsibilities, and key performance indicators (KPIs) to measure the effectiveness of each strategy.

By leveraging the 7Bs framework, organizations can tailor their action plans to effectively manage talent gaps and optimize workforce alignment. This strategic approach empowers organizations to proactively respond to evolving workforce needs and secure a competitive advantage in the dynamic business landscape.

The 7Bs Framework: Navigating Talent Management

Buy: This lever involves acquiring the necessary external talent through various avenues:

• Recruitment: Actively sourcing and hiring individuals from the external labor market to fill specific roles.
• Entry Schemes: Engaging with entry-level programs or initiatives to bring in fresh talent and mold them within the organization.
• Graduates and Apprentices: Establishing programs to attract and develop recent graduates and apprentices into skilled professionals.
• Pay and Reward: Offering competitive compensation and benefits packages to entice talented external candidates.

Build: The build lever focuses on nurturing internal talent and enhancing their capabilities:

• Progression and Succession Planning: Offering career advancement opportunities and mapping out potential pathways for employees.
• Learning and Development (L&D): Providing training, skill-building workshops, and educational resources to upskill employees.
• Talent Schemes and high-potential programs: Identifying high-potential individuals and offering them targeted development opportunities.
• Diversity and Culture: Creating an inclusive environment that fosters diverse talent and supports their growth within the organization.

Borrow: The borrow lever encompasses flexible workforce solutions to address immediate needs:

• Contracting and Outsourcing: Engaging with contractors, freelancers, or external agencies to fulfill specific roles or projects.
• Secondments: Temporarily transferring employees from one department or location to another to meet short-term needs.
• Contingent Labor: Hiring temporary workers to manage fluctuations in workload or seasonal demands.
• Professional Services: Seeking expertise from external service providers for specialized tasks.

Bind: This lever focuses on retaining key talent and ensuring their commitment to the organization:

• Pay and Reward: Providing competitive compensation packages and performance-based rewards.
• Contractual Arrangements: Offering contracts that promote long-term commitment and stability.
• Tenure: Recognizing and valuing employees’ length of service within the organization.
• Return of Service: Implementing agreements that require employees to remain with the organization for a specified period after receiving training or benefits

Bounce: The bounce lever involves workforce optimization through performance management.

• Redundancy: managing the excess workforce by eliminating positions that are no longer essential.
• Redeployment: Shifting employees to different roles or departments where their skills align with emerging needs.
• Exits: Strategically managing employee exits based on performance or business requirements.
• Secondmends: Temporarily assigning employees to other organizations or projects to address workforce imbalances.
• Partnership Schemes: Collaborating with other organizations to facilitate employee transitions and skill-sharing.

By strategically employing these talent management levers, organizations can navigate the complexities of workforce planning and ensure they have the right people with the right skills to drive organizational success.

The two demand optimization levers:

The 7Bs Framework: Leveraging Talent Management

Balance: Balance involves finding the right mix of the previously mentioned levers to achieve optimal workforce composition and capability. It takes into account operational transformation, budget constraints, service levels, performance improvement, technology adoption, and organizational design. Achieving balance ensures that the organization’s workforce strategy aligns with its overall goals and resources.

Bot: Bot refers to the utilization of automation technologies to augment or replace existing workforce capacity and capability. This includes technologies such as robotic automation, machine learning, and cognitive automation. Adopting automation can enhance efficiency, accuracy, and productivity, allowing human resources to focus on more strategic and complex tasks. Integrating automation wisely can reshape the workforce landscape.

Importance: Understanding the 7Bs framework is essential as it empowers HR and business leaders to devise strategies for addressing talent gaps. This framework enables critical thinking about the best approaches to ensure that the organization possesses the necessary capabilities to achieve its strategic objectives.

Buy: Buying involves bringing in external talent through recruitment, enabling the organization to acquire permanent capacity and capability. This approach may be costly, but it remains a viable option when other levers are insufficient or unsuitable. Consider which roles in your organization tend to be filled through external recruitment.

Build: Building entails developing internal talent to meet organizational needs. This encompasses training programs, development initiatives, and support for professional qualifications. Building internal talent offers advantages such as familiarity with organizational processes and tailored skillsets. It also enhances the Employee Value Proposition (EVP) by investing in employee growth.

Borrow: Borrowing involves leveraging temporary talent solutions, such as contingent labor, consultants, secondments, or outsourcing. During periods of uncertainty, increasing the use of contingent workers offers numerical flexibility to adjust the workforce size rapidly in response to changing demands.

Bind: Binding refers to strategies aimed at retaining employees within the organization. This may involve improving compensation, offering additional benefits, or introducing retention schemes. Retention strategies are designed to prevent key talent from leaving their roles or the organization.

Bounce: Bouncing involves managing the movement of employees within or out of the organization. This can include redeployment, exits through redundancy or performance management processes, secondments, or partnership schemes with other organizations. Bouncing allows for swift adjustments to workforce allocation and capability.

Implementing the 7Bs: Strategically implementing these levers involves evaluating the organization’s needs, resources, and business goals. By assessing the best combinations of these levers, organizations can proactively manage their workforce to address talent gaps, optimize capabilities, and drive success.

The 7Bs Framework: Demand Optimization and Action Planning

Balance: Balance ensures that demand factors are aligned with the organization’s business strategy and its capacity to implement change effectively. Achieving balance involves finding the right combination of approaches to meet workforce demands while considering costs and value addition. Key areas to consider when striving for balance include organizational design, hierarchy levels, and alignment of strategy with demand.

Bot: Bot involves using automation to enhance or replace existing workforce capacity and capability. Automation offers the potential to reduce dependence on human resources, especially for routine and repetitive tasks. However, the suitability of automation depends on the nature of the job and the organization’s ethical and employment considerations. Automation can provide cost savings and resilience in the face of labor availability challenges.

Developing Action Plans: To develop effective action plans using the 7Bs framework, consider the following steps:

1. Assess Levers: Determine which levers (Buy, Build, Borrow, Bind, Bounce, Balance, Bot) you will utilize to address talent gaps based on your organization’s needs.
2. Evaluate Current Practices: Identify activities you should stop, continue, or start doing under each lever to achieve a balanced workforce strategy. Focus on critical roles management.
3. Plan Details: Create a detailed action plan outlining outcomes, timelines, options, and scenarios. Provide multiple options for key stakeholders to choose from based on cost and timeframe considerations.
4. Communicate the Journey: Craft a compelling narrative that explains the journey of your workforce planning efforts. Share this story with key stakeholders to gain their support and collaboration.
5. Engage Stakeholders: Identify and engage key stakeholders, including operational leads, HR, finance, IT, unions, and others who are crucial for successful workforce planning implementation.
6. Key Components: Develop a comprehensive action plan that includes components such as demand management, recruitment, learning and development, redeployment, relocation, outsourcing, automation projects, and more.
7. Action Plan Template: Utilize an action plan template to consolidate your key workforce issues and gaps. The template helps organize your plan and provides answers to questions related to workforce gaps and interventions.

Execution: Once your action plan is established, it’s time to move forward with its execution. Implementing the plan requires coordinated efforts, clear communication, and collaboration among various stakeholders. Continuous monitoring and adjustment may also be necessary as circumstances change over time.

The 7Bs framework, when effectively applied, enables organizations to optimize their workforce planning strategies, ensuring alignment with business goals, fostering agility, and preparing for the challenges and opportunities of the future.

Stage 6: Deliver

Collaborating with Key Stakeholders in Workforce Planning

When engaging in workforce planning, collaborating with key partners and stakeholders is crucial to ensure a comprehensive and effective approach. Consider the following strategies for managing stakeholders, roles and responsibilities, planning stages, risk management, utilizing people analytics, and maintaining a living plan:

1. Managing Stakeholders: Effective communication, governance, monitoring, and reporting are essential for managing a diverse set of stakeholders. Maintain open channels of communication to keep stakeholders informed about the progress of workforce planning efforts. Establish clear governance structures to make informed decisions and ensure accountability. Regularly report on milestones, achievements, and challenges.

2. Roles and Responsibilities (RACI): Create a detailed RACI matrix that outlines the roles and responsibilities of each stakeholder in the workforce planning process. Clearly define who is Responsible, Accountable, Consulted, and Informed for each part of the plan. This ensures that everyone understands their contributions and accountabilities.

3. Plan Stages and Work Packages: Involve expert stakeholders in defining the stages and work packages for each aspect of the workforce plan. Collaboratively determine the scope, objectives, timelines, and resources needed for each phase. Engage stakeholders in conception, initiation, definition, planning, execution, monitoring, control, and benefit realization stages.

4. Manage Assumptions and Risks: Stakeholders should collectively identify and manage assumptions and risks throughout the workforce planning process. Regularly review and update assumptions to ensure accuracy and validity. Collaborate to develop risk mitigation strategies that address potential challenges and uncertainties.

5. Utilize People Analytics: Leverage people analytics to make informed, data-driven decisions in real time. Collaborate with analytics experts to gather and analyze data related to workforce trends, skills gaps, turnover rates, and other relevant metrics. Use this information to address challenges and opportunities as they arise during the execution of the plan.

6. Manage a Living Plan: Acknowledge that the workforce plan is dynamic and continuously evolving. Regularly revisit assumptions, validate data, and adjust the plan based on changing circumstances. Collaborate with stakeholders to iterate the plan and accommodate changes while maintaining alignment with business goals.

By actively involving key partners and stakeholders throughout the workforce planning process, organizations can ensure a holistic approach that incorporates diverse perspectives, fosters collaboration, and leads to more effective outcomes.

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Conclusion

In the realm of business management and human resources, taking action is often more productive than endlessly deliberating or succumbing to analysis paralysis. Embarking on a simplified approach to workforce planning by initiating conversations with managers about the organization’s trajectory and resourcing concerns is a valuable starting point. During these discussions, pay special attention to critical roles as they significantly impact the organization’s success. Collaborate with managers to explore existing challenges and potential improvements. If the environment seems uncertain, consider working together to create straightforward scenarios that can guide decisions as events unfold.

It’s important to understand that workforce planning isn’t a rigid process, nor is it intended to be a precise science. Its purpose is to enhance business performance and mitigate organizational risks by bridging the gap between the workforce a business requires and the workforce it actually possesses. The adage “People are a business’s most important asset” may be a well-worn phrase, but it remains undeniably accurate. Achieving success hinges on having the right individuals, possessing the appropriate skills, occupying the right positions, and doing so at the right juncture. This alignment not only improves operational efficiency but also bolsters the organization’s overall resilience and competitiveness.

In the dynamic landscape of workforce planning, embracing proactive engagement, data-driven insights, collaboration, and adaptability will allow organizations to craft strategies that harness the full potential of their workforce while navigating the uncertainties of an ever-evolving business environment.

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