Strategic Workforce Planning in 6 Steps

Vernon Simpson

Posted by Vernon Simpson
Last updated 21st May 2018
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  • The Strategic Workforce Planning Process

    We polled our experts and asked them to define a simple, straightforward strategic workforce management process. They outlined the following six steps:

    • Establish where your business is going
    • Understand where the labour market is going
    • Understand your future talent demands
    • Assess your current talent inventory
    • Identify your talent gaps and strategies to close them
    • Implement your strategies
    Understand your business strategy

    The first step in the strategic workforce planning process is to have a clear understanding of your business strategy. At the end of the day, your workforce is there to implement the strategy and achieve expected business results.

    Strategic change fails when the people implementing the change don’t know what they need to do differently in order to support the new strategy. These disconnects create confusion, conflict, and stress, and put even the best people in a position to fail. Make sure that you have thought through the operational details of your strategy, and that you have sufficient facts and support to make a good decision.

    Know how far and how fast you can reasonably move. It takes time, money, and thought to design and build technological infrastructure, production facilities, and distribution capability. Similarly, it takes time to hire, deploy, and train talent. This is even more true when your workforce requires special skills or credentials, or when your jobs are located in a talent-poor or highly competitive region.

    The bottom line is that you need to know your business strategy, and the impact of that strategy, before you can create a meaningful workforce plan.

    Understand the labour market

    Understanding the labour market for the jobs necessary to drive your strategy will help you better understand the length of time it will take to fill a job, the salary you should expect to pay for the job, and potential challenges to filling the job. For example, a growing suburb might be in need of a new school, but the area is expensive and difficult to attract teachers. You need to take these factors into account as you build your strategic workforce planning.

    Common factors to consider include macroeconomic forecasts, demographic trends, regulatory changes, and talent movement trends within your industry.

    Understand your future talent demands

    Once you have translated your business strategy into operational requirements, you must design the organization and the jobs necessary to implement the strategy. If you contrast this with your organization and jobs as they stand today, you can identify jobs you will need to create, jobs you will need to phase out, and the optimal timing of that transition.

    Critical roles are those jobs that are mission critical to your future business strategy. If you don’t have a solid plan for filling these roles with capable people, the business strategy simply won’t come to life. For example, a new cardiac ward in a hospital needs cardiologists and acute care nurses in order to function.

    Critical employee segments can include mature workers, visible minorities, members of Gen Y, ethnic groups, veterans, aboriginals, and others. They can be strategically important to certain organisations that need to fulfil requirements for certain types of government contracts or grants, or that want to meet the needs of key customer groups. For example, if a retail organisation wants to position itself in areas with growing Latino populations, then they need to have Latino employees.

    Assess your current talent inventory

    Once you understand future demand, the amount of change needed, and the optimal timing of that change, you should inventory your current talent pool. This will help you determine how to eventually transition people into new roles. It will also give you insight into who won’t fit into the new organisation and help you create an exit plan.

    Identify talent gaps and strategies to close them

    After you have assessed your internal talent inventory and understand the jobs necessary for executing your new strategy, you can identify your gaps, determine a time frame for closing those gaps, and create specific tactics for closing gaps.

    Implement your strategies

    The last step is to run scenarios in order to understand how the availability of these critical roles or segments impacts the rest of your business plan. Then determine how your workforce plan will be impacted. Timing is important, which is why we examined the labour market earlier in the process.

About the author
Vernon Simpson
Vernon Simpson
I am a Certified Value Builder, C- IQ Coach, Author, and approved Business Growth specialist, providing expert, tailored business and executive coaching in London and the UK. I am passionate about business and service excellence, and I want to connect with the owners of SMEs, managers and corporate executives in the private, public and third sectors; individuals who are looking to achieve superior performance, and obtain guaranteed service improvements results, and increases in turnover and profitability.
Book Research Project

I’m currently doing research for a new book I’m writing based around my 45 min business turnaround. What I do is typically charge my clients £1300 for a 45 min business turnaround where I essentially find £10,000 hidden in their business within 45 mins of sitting down with them. Not a bad investment when you consider I will quadruple their investment in 45 mins.