TTT – Effective Strategic Workforce Planning: A Four Step Guide

These are the thoughts and takeaways from the latest Talent Think Tank (TTT) held on Tuesday 10th December 2013 hosted by Skanska’s Dan Forbes-Pepitone (Interim HR Director) titled ‘Effective Strategic Workforce Planning (SWP)’.

The following summary has been prepared based on Ali Gilani’s (Global Head of Resourcing and Strategic Workforce Planning at ArcelorMittal) master class on how to tackle SWP effectively.

What are your business goals over the next several years and what kind of workforce will you need to reach those goals? Understanding and closing the gap between projected and current talent needs can make all the difference in your ability to a execute strategy effectively. Workforce planning helps an organisation to estimate its future workforce requirements and calculate the numbers, nature and sources of potential employees who might meet that demand. Additionally, it helps identify and plan how to tackle current and future workforce challenges and priorities, and provides a sound basis for developing an effective workforce strategy. In other words, it’s about getting the right number of people, with the right skills, in the right place and at the right time.

What is a Strategic Workforce Plan?

SWP is a process that enables businesses to translate their five year business strategy into a year by year action plan. The word strategic is absolutely key and is what separates SWP from workforce planning (literally!), as it references the direct relationship this planning activity has with the overriding business strategy. You cannot create a SWP without clear direction from your business and in independence of the all important five year business strategy. SWP is therefore distinct from ‘resource planning’ in a number of ways; the time and forecast horizons are typically longer and involve the mitigation of risk rather than tactical plans for immediate execution, the focus is on critical roles and strategic capabilities rather than all roles.

Why do we need a Strategic Workforce Plan?

Put simply the job of SWP is to ensure the long-term sustainability of a business by ensuring:

  • Core/critical jobs are secured
  • Future skill requirements are identified and proactively recruited or developed
  • Demographics are analyzed and used to balance the workforce
  • The organization is appropriately staffed and not put at risk from lack of skills or over abundance of employees
  • A skill shortage in the market is identified in advance and addressed before the organization is negatively impacted.

Getting the Plan in Place

Based on Ali Gilani’s recommendations, SWP can be broken down into four key stages as outlined below. It’s worth noting that this process should be owned by the Executive Leadership team and be supported by HR in terms of analysis and recommendations. Additionally, when gathering data from the business to inform your SWP, you must do so at ground level and build upwards. And finally, remember that you’re gathering data on the actual job roles – not the job family or people doing it.

Stage 1: Define the Business’s Strategic Direction

Define the strategic direction of the business: are you planning for organisational growth, no growth or contraction? Next translate the strategy into a scenario, such as ‘new product development’. In this case the identified gap might be ‘new skills set’ and the interventions would include recruitment and / or skills development. Moreover, once you’ve defined the strategic direction of the business it’s imperative to plan an additional scenario should a crisis arise. Like an insurance policy, it gives you piece of mind having it in place – but you hope you never have to use it!

Stage 2: Forecast the Demand and Supply

Based on the business strategy, job by job, what skills and how many people will be required to meet the strategy objectives? This understanding can be achieved by labelling your jobs either core* or critical** with additional reference to the length of time required to be fully competent at each role (learning curve **). Starting from a ‘zero-base’ and taking into consideration the learnings from above, you should be able to determine the number of each skill (people) that will be required over the next 1-5 years (in relation to the business strategy).

The next job is forecasting the supply. Based on the business strategy, job by job, what skills and number of people do you currently have? This data should be analysed in relation to your historical attrition and retirement trends and mapped out against your business strategy over the next 1-5 years. This data will also help identify the skills that are required but not yet in existence within the business.

* Core = any jobs that you wouldn’t outsource

** Critical = any job that, if removed, would result in the business grinding to a holt (not about seniority)

*** Learning Curve = low (less than a year), medium (1-3 years) and high (3+ years)

Stage 3: Analyse the Gaps

The next stage of the process is identifying and analysing the gaps between your need (demand) and what you currently have (supply). Putting it simply, you need to subtract your supply from your demand forecast and analyse the gaps, for instance: surplus vs. shortage, lack of skills or lack of capabilities – your core and critical jobs are the ones to worry about! From here you need to assign appropriate interventions to ensure that the gaps are being closed, such as: early retirement programmes, redeployment, contract termination, external hiring, overtime etc.

Stage 4: Develop the SWP

Once you’ve gathered all your data and conducted the appropriate analysis, the strategic workforce plan will be able to offer your business: future skill requirements and workforce configuration, gap closure interventions and a yearly executable plan. If you’re fortunate enough to develop and utilise a bespoke SWP tool, it’s crucial to remember that it will not replace the conversations needed to: translate strategy into demand, identify the most appropriate gap closure interventions and of course realise any prevailing risks.

The SWP is an iterative, annual process, and results in the formation of a dynamic plan including assumptions and contingencies that consider a host of external, environmental factors including political, economic, social, technological, environmental and demographic issues.

Oasis HR

Written by , Network Driven HR Recruitment

Oasis HR is a multi-award winning HR Recruitment Agency based in London that delivers Contingency and Search services within the Human Resource and Business Change Markets. Our client base encompasses all industry sectors and we have a proven track record of delivering permanent, interim and temporary professionals at all levels across all HR disciplines. From a £20k HR Administrator to a £200k HR Director, Oasis HR is well placed to identify, approach and secure the best available talent in the market

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