The Benefits of Workforce Planning

An overview of effective workforce planning techniques

Our Essential Guide To Workforce Planning

Workforce planning is a process that enables an organisation to recruit, train and retain the right people in order to meet its objectives now and in the future.

It involves analysing current workforce capabilities, predicting future workforce requirements, and implementing strategies to meet those needs.

This guide provides an overview of effective workforce planning techniques, including tools and insights to help leaders plan for and meet the demands of the business.

Importance of Workforce Planning

There are myriad benefits to effective workforce planning and whilst not all will produce immediate rewards, they will bear fruits over the medium to long term. By identifying and preparing for staffing needs, organisations can avoid the negative outcomes from understaffing or overstaffing, both of which can have material repercussions.

Align workforce with strategic objectives

By understanding the future goals and direction of the organisation, managers can identify the skills and competencies that will be needed to achieve those objectives. 

This enables them to proactively develop and acquire the necessary talent, rather than reacting to immediate staffing needs when they arise. 

By doing so, organisations can ensure that they have the right people in place to drive their success.

Anticipate and manage talent gaps

With workforce demographics changing rapidly, organisations need to plan for potential skill shortages and gaps in their workforce. 

By identifying these gaps in advance, managers can take proactive measures to resolve them, such as through training and development programmes or strategic hiring initiatives.

Improvement of Employee Retention

Identifying opportunities for training and upskilling provides employees with continuing development and helps open up future internal opportunities. 

Addressing potential gaps in career progression or skills development ultimately enhances job satisfaction, which in turn boosts retention. It allows anticipation of an employee’s growth, helping ensure the opportunity for promotion is available when the time comes. Through this approach, it sends a signal to employees that your organisation is people-focussed and wants to invest in their development.

Optimise Resource Allocation

By analysing the current and future demand for different skills and roles within the organisation, managers can identify areas of overstaffing or understaffing. This allows them to make informed decisions about workforce deployment, such as reallocating resources from areas of low demand to areas of high demand. By optimising workforce utilisation, organisations can maximize productivity and efficiency, while also minimising costs.

Succession Planning

As senior team members retire or move on to other roles, organisations need to ensure a smooth transition of leadership. By identifying high-potential employees and preparing them for future leadership roles, organisations can mitigate the risks associated employee churn. 

This involves providing targeted development opportunities, mentoring programmes, and creating a culture of continuous learning and growth. Succession planning not only ensures the continuity of leadership but also motivates and engages employees by providing them with clear career paths and growth opportunities.

Adapt to changing market conditions and technological advancements

By anticipating future skill requirements, managers can invest in the development of new skills and capabilities that will be needed in the future. 

This enables organisations to stay ahead of the curve and remain competitive in a rapidly evolving business landscape.

A workforce planning meeting in progress

How to Undertake Workforce Planning

The main components of workforce planning include:

  1. Analysing the current workforce
  2. Identifying future business needs
  3. Assessing workforce gaps
  4. Developing strategies to bridge the gaps

Central to this process is workforce analytics, which provides data-driven insights into workforce dynamics and future needs.

Other elements involve succession planning to ensure leadership continuity, and flexibility strategies such as cross-training and adaptable workforce arrangements to respond to changing requirements efficiently.

Compliance with employment laws and understanding economic conditions are also integral to creating a robust workforce plan.


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Step 1:

Analyse Current Workforce

To forecast future staffing needs effectively, organisations must first thoroughly understand their current workforce composition. This involves analysing employee data on skills, performance, job families, and other key factors. 

  • Define the required skills for each function as a key first step. This may differ across departments. For example, someone in IT may require ‘server administration’ skills, whereas someone in HR would not.
  • Gather data from employees using forms or surveys for them to complete, that feed into a central database. This is key to enable the analysis of the data at a later stage.
  • Use this data to identify strengths and weaknesses across the workforce and areas with skill shortages.



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Step 2:

Identify Future Business Needs

Anticipating future trends in both the industry and the general labour market is crucial for strategic workforce planning. This prediction involves analysing technological advancements, economic forecasts, evolving industry practices, and internal shifts in strategic direction that could impact the demand for different types of jobs and skill sets.

For instance, the rise of automation and artificial intelligence may reduce the need for routine tasks, thereby increasing demand for more specialist skills. Shifts in customer behaviour or regulatory changes can also necessitate adjustments in workforce composition and capabilities.

To stay ahead, it’s important to continually monitor these trends and adapt staffing strategies accordingly, ensuring the organisation remains competitive and resilient.

  • Undertake market research to identify external factors such as trends in technology and automation, shifting customer behaviour and regulatory changes.
  • Understand internal factors such as the organisation’s strategic direction in terms of growth plans, target customers, service offerings and any other business practices. 
  • Review the current staff churn rate for different cohorts to predict future gaps.

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Step 3:

Assessing Skills Gaps

Using the data gathered as part of the analysis phase, organisations should utilise reporting and dashboard tools to visualise the data in a coherent manner.

Employee data should be aggregated into cohorts such as level of seniority, department and function. This will provide a clear picture of the gaps that need addressing.

  • Analyse the skills currently available within your workforce.
  • Match these skills against those needed to achieve future business objectives.
  • Highlight areas where there are significant discrepancies between the skills needed and those available.

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Step 4:

Developing strategies to bridge the gaps

Implementing successful strategies to bridge the gaps identified in the previous step encompasses recruitment, onboarding, training, and retention.

Recruitment and Selection Process - A robust recruitment and selection process ensures an inflow of new staff at the right time. It’s key to ensure the specific skills and qualities needed for each role have been identified and the right people can be recruited.

Onboarding and Training Programmes - Once candidates are selected, effective onboarding and training programmes are crucial to ensuring they fill the skills gaps effectively. Training programmes should support their professional development and ensure they have the necessary skills to perform effectively.

Retention Strategies - To maintain a strong workforce, organisations need to implement effective retention strategies that encourage employees to stay long-term. This retains key skillsets within the business, which lowers costs and reduces reliance on recruitment.



An informal meeting to discuss the workforce

Best Practices and Tools for Workforce Planning

Implementing best practices and leveraging the right tools can greatly enhance success with workforce planning. Being able to respond and adapt to changes proactively is crucial to the ongoing management of an organisation’s workforce planning efforts.


Succession Planning

Succession planning is a crucial strategic process to ensure key roles within the organisation are filled with competent candidates in the event of turnover. This involves identifying and developing internal talent ready to step up when necessary.

Proactive succession planning helps in smooth transitions and maintains continuity in critical business operations, contributing to stability and growth.

Automation

The effectiveness of workforce planning relies not just on technology solutions but also on the efficiency of processes. Undertaking workforce analysis on a regular basis can be time consuming which is why it’s important that the processes surrounding the activities provide decision makers with key MI and reporting effortlessly.

Policies and Procedures

Embedding your workforce planning strategies into relevant policies and procedures will help ensure that the organisation is unified in it’s workforce planning, training and recruitment strategies.

Talent Acquisition Strategies

Effective talent acquisition strategies are vital to attract and hire the right candidates. This involves more than just filling vacancies.

It requires a clear understanding of the organisation's long-term goals and the specific skills needed to achieve these goals. Utilising scorecards as part of the recruitment process can help identify those candidates that meet the needs of the role.

Performance Management

Once the right candidates are in place, continuous performance management is essential to ensure they remain engaged and productive. This includes regular performance reviews, feedback sessions, and career development plans to help employees grow within the company. 

Aligning individual performance with organisational goals not only motivates employees but also drives overall business success.

Leadership Development

Leadership development is critical in shaping a responsive and agile workforce. Organisations should invest in training programmes to cultivate both hard and soft leadership skills. This includes decision-making, strategic thinking, empathy, and effective communication. 

Mentoring up-and-coming leaders and providing continuous learning opportunities is essential. Furthermore, promoting from within your organisation can significantly boost morale and help retain top talent, as employees see clear pathways for career advancement.

Conclusion

Effective workforce planning is crucial for maximising organisational efficiency and staying competitive in a world of rapid change. As we've outlined, understanding your current workforce, forecasting future needs, and implementing strategic staffing solutions are core components of a robust workforce management strategy. 

By taking these steps, you will position your organisation for sustained success through a well-planned and agile workforce strategy. Effective workforce planning not only addresses immediate staffing needs but also strategically prepares for future shifts in the market and technology, ensuring long-term resilience and profitability.

How can we help?

Download BDO’s free Workforce Planning template to start analysing your current workforce capabilities.

BDO can offer support with any stage of the process using tried and tested processes and tools, including pre-built surveys, analytics, reports and dashboards saving you considerable time and effort.

BDO's expertise in workforce planning is exemplified by our real-time data-driven Talent Matrix dashboard, a tool developed in-house to provide invaluable insights into the capabilities and experience of our workforce. This optimisation tool empowers our senior leaders to effectively manage workforce resourcing requirements and make strategic decisions with confidence. By leveraging our Talent Matrix dashboard, we can align workforce strategies with market demands and navigate the complexities of the ever-evolving marketplace with ease. 


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