5 steps of the workforce planning process.

The ongoing labor shortage is real and it’s impacting businesses from nearly every sector. However, businesses that require a large volume workforce, such as manufacturing, retail and construction, are finding it especially difficult to fill open positions. This factor unfortunately can lead to production delays, higher costs and lost revenue.

In a recent study conducted by the Business Council of Canada, 80% of those organizations surveyed reported having trouble filling open job vacancies. Furthermore, nearly two-thirds of these business leaders said that they have had to turn work down or delay projects and 60% experienced revenue losses due to the labor shortage. In fact, companies are losing billions of dollars due to today’s labor challenges.

Some companies have tried increasing wages to attract more skilled workers. While this might be helpful, without a detailed strategy, it’s like putting a bandage on a much larger problem. One tool that has the power to help businesses overcome the current labor shortage, while also preparing for the company’s future talent needs is workforce planning.

In this guide, we’ll discuss what workforce planning is and why it’s important as well as explain the five steps of the workforce planning process.

why invest in workforce planning?

Workforce planning is the process of assessing the organization’s current and future labor, skills and competency needs and then developing a strategy to acquire these in-demand skills. There are numerous reasons why implementing a workforce planning strategy or revamping your current strategy is so important today. For example:

• identify skills the company already has in place
• forecast the company’s future skills, labor and competency needs
• improve hiring outcomes
• reduce recruitment costs
• help narrow the skills gap
• improve workplace communication
• enhance employee engagement
• build an agile, flexible workforce that you can scale up and down as needed

Once you understand the multiple benefits workplace planning can offer companies with both small and large volume workforces, it’s easy to see why investing in this strategy can help your company overcome many of today’s talent challenges.

the workforce planning process

Whether you realize it or not, you already have a workforce planning process in place. However, without a structured process that is in alignment with the company’s overall mission, it will do little to help your company overcome its current or future talent needs.

To effectively deal with today’s labor challenges and build a flexible workforce to meet fluctuating demands, your company needs to develop a well-structured and defined workforce planning strategy that aligns with your company’s specific goals and objectives. You also need to prioritize frequent collaboration between all key players, including HR personnel, the finance department, executives, managers and supervisors. This high-level collaboration ensures that your strategies are working towards meeting the goals of your company.

Below is a detailed look at the five steps of building a workplace planning strategy.

1. create a sense of urgency

To build a successful workforce planning strategy, you must secure a buy-in at the executive level. Typically, the HR department is responsible for securing this support. Despite the multiple benefits workforce planning has to offer, it can still be difficult to secure approval for this type of investment. This factor is especially true today as many companies are still recovering from the effects of COVID-19 and are dealing with fluctuating customer demands and growing inflation concerns.

One of the most effective ways to gain this support is to build a sense of urgency for workforce planning. This step shouldn’t be too hard to do considering the tight labor market and ongoing talent challenges, such as the growing skills gap. It’s important for company executives to understand that solely focusing on the current talent needs of the organization will leave it ill-prepared for the future.

For example, if your organization wants to invest in advanced technology, such as automation, it will need skilled workers to manage this technology. However, waiting to acquire this talent until the company is ready to implement this technology may be too late. Workforce planning allows you to start acquiring the skills now so your company can stay ahead of the competition.

With the labor shortage not set to end anytime soon and the skills gap continuing to widen, the real question isn’t if your company can afford to invest in workforce planning, but whether it can afford not to.

2. from strategy to human resource

Once you secure an executive buy-in, the next step is to identify the company’s current and future goals. Your team should work together to determine where the company wants to be in 1, 3, 5, and 10 years. For instance, is your company planning to launch a new product or service in the near future, does it plan to invest in new technology in the next five years or are there any plans to open a new location?

Knowing the company’s current and future plans allows you to better forecast its future labor needs. For example, does your company need to acquire new skill sets, build a larger talent pool of contingent workers or focus on in-house training? Ensuring everyone on the team has a firm understanding of the company’s vision can ensure your workforce planning strategy remains in alignment with these goals.

With this information, you can begin to merge company goals with human resource objectives. When creating these objectives, be sure to consider both quantitative objectives, such as how many more laborers or managers the company needs in the next three years, and qualitative objectives, such as what digital skills the company needs to acquire now. This step can help you develop a comprehensive strategy that enables the company to meet its goals.

3. workforce analysis and classification of skills

Knowing the skills your company needs, both now and in the future, can enable you to conduct a comprehensive workforce analysis. Start by assessing what skills, talents and competencies your company already has in place. Next, you need to differentiate between what skills your company needs now, what skills they will need in the future and what skills are likely to become obsolete in the upcoming years.

Be sure to gain input from managers and supervisors who have direct knowledge of the skills the company needs on a day-to-day basis. For example, interview shift supervisors, line leaders and floor managers to get a better understanding of the company’s current needs. These workers may also have first-hand knowledge of what skills the company still needs to acquire.

Then, you can classify these different skills, talents and competencies into several groupings, including:

While this classification of skills, talents and competencies can be time-consuming, our teams at Randstad can help. As part of our Randstad Inhouse Services, your dedicated on-site manager can work directly with your company to help you better understand these classifications and how to use these designations to prepare your company for the future. Once you classify these skills, talents and competencies, you can take a closer look at how to plan for each grouping.

4. the transition

Once you have completed the workforce analysis, identified current and future skills gaps and classified these skills and talents, your team can move forward with the transition phase. During this stage, your planning team must carefully evaluate each classification listed above and determine which HR interventions can help the company meet its goals and objectives.

For instance, if your company is expecting to upgrade its workplace technology in the near future, now is the time to start planning. Skills needed to manage this technology, such as digital skills, should be classified in the ‘most wanted’ grouping.

Knowing your company needs these skills is just the first part of the workforce planning process. Now, it must determine the best way to acquire these skills.  For example, you may need to build a robust recruitment strategy that targets candidates with these specific skill sets. An alternative method could be to provide in-house training to equip targeted workers within your organization with these high-demand skills.

This could be a good opportunity to address workers categorized under the ‘to move’ grouping. Helping these workers acquire the skills the company needs allows them to move into new positions and helps the company narrow its skills gap simultaneously.

Our Randstad Inhouse Services are uniquely designed to support high-volume employers in building workforce management strategies. First, our vast talent pool of pre-vetted candidates provides easy access to flexible workers, so you can scale your workforce up and down as needed. Secondly, our robust hiring techniques help clients fill open vacancies, even those hard-to-fill positions. Finally, your dedicated, on-site manager can handle the shift scheduling process to give your team more time to focus on other areas of workforce management. 

Due to the need for collaboration, communication is key, especially during the transition phase. Be sure to set up regular meetings where the team can come together to discuss the strategy's strengths and weaknesses and to identify any challenges in the implementation process. This frequent communication allows your team to adjust and modify each workforce planning strategy as needed.

5. embedding the plan

Workforce planning is not a one-time strategy, but rather a continuous process of planning and evolving. This type of process is necessary because the goals and objectives of the company are likely to shift and evolve over time. For example, your company may not be planning to open a new location right now, but three years down the road this might change. With this change may come the need for a new set of recruitment and training strategies.

It’s vital to frequently repeat these five workforce planning steps. This circular process helps to continuously evaluate, assess and adjust these workforce strategies to meet the growing needs of the company. This step allows your team to identify new skills gaps within the company as well as stay up to date as to the current and future talent needs of the company.

During this stage, your team can use preset milestones and metrics to measure the success or ineffectiveness of each strategy put in place. This step is crucial to the overall success of your workforce planning strategy. Your team can also determine which strategies are now obsolete and no longer need to be part of your overall workforce planning strategy. For instance, if your company was preparing for a new product launch and that launch is now over, there may no longer be a need to develop certain skills and talents.

Ultimately, workforce planning should be an embedded part of the organizational planning process and a permanent function within the company. Fortunately, our Randstad Inhouse services can move through the workforce planning process with you. Our services are completely customizable, so you can determine what workforce planning tasks you want our teams to help with and which tasks you want to keep in-house.