Organizations need a holistic yet diverse approach to talent acquisition — one that truly aligns HR strategy to the company’s overall goals, objectives and future needs. Strategic workforce (SWP) planning used to be confined to the HR department, but that is no longer the case. In the past, companies also focused on how many people they would need in the future to sustain growth, but as this article will explain, SWP has become far more than that.
What is strategic workforce planning?
Strategic workforce planning goes beyond numbers to identify the specific needs to ensure organizational agility and sustainability. Just as important, SWP looks at the potential number of people and what skills they need to have, along with organizational capability risks that could compromise sustainability.
To demonstrate the importance of having a robust and well-thought-out SWP methodology, let's use the financial services sector as an example. Many organizations in the financial services sector are currently undergoing huge digital transformation projects and require talent with niche technical skills, which is an entirely different ‘career sell’ in order to attract these skills into this industry compared with the skills required previously. This demand for new technology skills and capabilities have propelled this industry to look beyond the ‘traditional’ skills profile, and instead, leverage on technology skills. It’s important to know where your company and indeed the industry it is in is headed.
To have an effective workforce strategy, you need to have a well-articulated business strategy. After all, if you don’t know where your company is going to be five years or more from now, how can you identify the skills you will need to get you there?
You’ve probably heard the phrase, ‘a prescription without diagnosis is gross malpractice’. This is true when looking at SWP. A solid talent acquisition strategy needs to start with a deep diagnosis and respect for contextual differences in market trends when it comes to the talent supply chain. Understanding the macro and the microeconomic environment, and factoring in trends, scenarios and ‘what-ifs’ from the external world will give organizations a well-rounded view of the talent landscape.
When conducting a supply and demand analysis, it’s important to understand whether your existing capabilities align with the future aspiration of where your business wants to be. This needs to also be integrated with a deep understanding of skills and capabilities for the future, and organizations need to put in place interventions to bridge any gaps.
What are three key components for strategic workforce planning?
When it comes to identifying skills and people for the future, a key component to SWP is workforce segmentation methodology.
Let’s use an automobile analogy to make it easier to explain. You can break down your needed talent into three key groups:
- The GPS: These are the leaders with the skills and capabilities critical to the future sustainability of the organization. These individuals may be hard to find and acquire, which requires a highly customized employment brand, employee value proposition, and engagement strategy.
- The engine: These professionals have the niche skills that the company needs to function. These might be highly technical and niche skills that are scarce.
- The wheels: This group, the biggest, consists of the people who help the business achieve operational excellence. Their skills may be abundant in the market.
All three groups respond to different talent acquisition initiatives. GPS employees are likely to be passive candidates and require a tailored approach with a robust employment brand strategy, while wheel employees need a straightforward but structured process.
Using data effectively
Access to advanced HR data and people analytics is essential for effective SWP. With the proper visualization, you will gain a clearer understanding of your talent processes and needs. This insight is particularly crucial for companies that operate across different geographies.
Once the talent has been split into three groups, organizations then need to consider the generational differences in order to develop effective employment brand strategies. Today’s workforce consists of five generations working alongside each other: traditionalists, baby boomers, gen X, millennials and gen Z so employment brand and indeed, employee experience, requires a concerted effort. Employers need to understand the expectations of each generation with a brand that speaks to the individuality of each group. And it’s important that non-permanent employees are also catered for when it comes to employment brand. Non-permanent employees make up more than 31% of today’s labor force so it’s vital employment brands cater to this group of workers and not just their permanent counterparts. Further, millennials (which make up a significant proportion of today’s workforce), in particular, have said they wouldn’t hesitate to do freelance or contract work. In fact, the gig economy “appeals” to the majority of millennials and gen Zs (four in five) so the days of siloing talent - and treating permanent and contingent separately - are history.
Talent is talent regardless of whether it’s permanent or temporary and both candidate and employee experience should be seamless for all segments of talent. Think about it: contingent workers leave reviews on job sites like Glassdoor in exactly the same way as their permanent counterparts.
Winning over the c-suite
How can you convince your company’s leadership team to invest in SWP? Don’t talk about SWP in terms of performance, people and talent processes. Instead, promote SWP as a method of ensuring the sustainability of your organization while mitigating risk. Explain that without being able to align workforce planning to the business strategy, your organization risks not having the right talent it needs for the future.
Be sure to explain what’s at stake with SWP — that it’s not about headcount, but building capabilities that align with organizational values and having the right skills to facilitate growth. That way, when it’s time to ramp up, you won’t have to scramble for talent.