Justin Somerville-Cotton, Head of Flexhuis, shares his insights on workforce planning, emphasising its critical role in organisational success and its effectiveness even in challenging market conditions.
Workforce planning is critical to any business’s current and future success. In fact, it can provide a real competitive advantage.
A core business process, by analysing existing resources, mapping skills, and understanding future demands, workforce planning allows businesses to effectively plan for future talent requirements and ensure they have the right skills in place to meet current and future objectives.
What is workforce planning?
Underpinning any business is its talent. By aligning business goals with workforce strategy, organisations gain insights into potential increases in demand for specific skillsets or additional resources. This allows businesses to determine whether these needs are best addressed through hiring permanent or contingent talent, in turn helping to plan, upskill existing talent, or cultivate an effective talent pipeline while mitigating costs associated with unnecessary or incorrect hires.
Workforce planning extends beyond recruitment, involving analysing, forecasting, and aligning a business’s workforce needs with its business goals. This underscores the significance of nurturing and developing talent within the business to effectively meet both present and future needs.
Why is it important for businesses?
Workforce planning isn’t merely a tick-box exercise; it has the potential to drive business success. By strategically aligning talent, resources, and business objectives, workforce planning ensures that businesses are well-prepared for the challenges and opportunities that lie ahead.
Let’s delve into the key components of workforce planning needed to create a robust and forward-thinking workforce strategy.
Talent management: Workforce planning ensures that businesses have the right people with the right skills to meet the changing needs of the business. Talent management is central to workforce planning, as it involves attracting, developing, and retaining high performers.
Cost optimisation: Achieving a balance between workforce costs and productivity is vital for ensuring the viability of a business. It requires finding a middle ground between managing expenses and maximising operational output. Implementing tools to support in forecasting talent and skills on the market, efficiency measures, and cost analyses help businesses attain this balance.
Agility & succession planning: As work dynamics evolve, so do skill requirements. Existing skills become outdated while new ones continually emerge. Workforce planning allows businesses to identify current skill gaps and anticipate future needs, helping them stay agile and responsive to changing demands.
Risk mitigation: Addressing workforce gaps and potential shortages is crucial for business continuity. Workforce planning acts as a backup, minimising risks associated with talent demand or sudden workforce disruptions. Contingency plans, skill inventories and succession benchmarks all help reduce the risks associated with managing a business’s current and future workforce.
Strategic decision-making: A workforce strategy that is well-designed supports growth and improves competitiveness. It helps leaders to make decisions based on evidence, matching their workforce needs with business objectives. By aligning with business goals, using data-based insights, and being flexible, businesses ensure long-term success.
“Workforce planning is essential for ensuring your business has the right skills at the right time. By aligning the activities of your talent acquisition team with upcoming projects, you can ensure your business is well-prepared to meet its objectives efficiently and effectively.” – Head of Flexhuis UK, Justin Somerville-Cotton
Common challenges
While most businesses recognise the importance of workforce planning, many grapple with the complexities of developing and implementing effective strategies. However, the good news is that it doesn’t need to be overly complicated. In this section, we’ll explore common hurdles faced during workforce planning.
Data complexity: To effectively manage and plan a workforce, it is crucial to gain insights from data, and collecting precise workforce data can be a significant challenge. business need to monitor attrition rates, maintain a comprehensive skills inventory, and analyse demographic trends. Without accurate data, businesses may find it challenging to plan their workforce effectively, potentially resulting in flawed decisions, misaligned talent strategies, and inefficient resource allocation.
Changing demographics and expectations: The workforce is increasingly diverse with generational differences, evolving skill sets, and varying employee expectations. As demographics shift and the need for versatile skills grows, businesses are faced with the challenge of navigating these complexities. Failure to address diversity can hinder collaboration, innovation, and overall business performance, so developing a nuanced understanding of these factors is crucial for effective planning and decision-making.
Evolving skill sets: Technology changes constantly and affects the skills that businesses need to succeed. To prepare for the future, businesses need to have a clear understanding of what skills they have in their workforce, what skills they will need in both the near and distant future, and how they will acquire those skills. Without a thorough assessment of their existing skills, decision-making is based on guesswork. This guessing approach may result in either hiring too many people, creating unnecessary costs, or hiring too few people, leaving critical skill gaps unfilled.
Market volatility: Gaining insights into market trends and understanding how your business responds to them is crucial for effectively planning the workforce. Whether it’s navigating economic fluctuations affecting workforce stability, making necessary layoffs during downturns, or swiftly hiring to accommodate rapid growth, finding the right balance is an ongoing challenge. Misjudging market trends can lead to overstaffing, underutilisation, or missed opportunities.
Short-term vs. long-term focus: Immediate hiring needs can often overshadow long-term workforce strategy, as hiring managers frequently focus on short-term recruitment goals, leaving little time for strategic consideration of future workforce needs. It is crucial to strike a balance between addressing immediate vacancies and engaging in strategic workforce planning. Encouraging hiring managers to look beyond immediate staffing requirements is vital in overcoming this challenge. Failure to prioritise long-term planning puts talent pipelines, succession readiness, and organisational resilience at risk.
“During challenging market conditions, staffing can be difficult. However, effective workforce planning allows you to pinpoint where skills are needed. By focusing on retaining staff and providing opportunities for them to develop the skills your business requires, you can save time on hiring, increase internal mobility, and reduce hiring costs during tough economic climates.” – Head of Flexhuis UK, Justin Somerville-Cotton
Leveraging RPO for effective workforce planning
With the challenges that come with workforce planning, Recruitment Process Outsourcing (RPO) serves as a key enabler for businesses that may lack resources to implement workforce planning. By seamlessly integrating business analytics and a forward-thinking approach, an RPO can redefine how a business prepares for its staffing needs.
Strategic partnership: RPO providers work closely with businesses, integrating themselves into each business and collaborating closely with their hiring managers to proactively anticipate current and future staffing requirements. By understanding workforce needs, an RPO provider can tailor solutions that align with an business’s strategic goals.
Recruitment expertise: An RPO provider brings a wealth of recruitment expertise. From crafting effective sourcing strategies to assessing candidates, their specialised insights enhance the quality of talent acquisition. They understand the nuances of candidate assessment, ensuring that the right fit is found for each role.
Scalability: Workforce demands can change rapidly and RPO providers adapt seamlessly, scaling resources up or down as needed. Whether it’s rapid expansion or leaner times, they remain agile. This flexibility allows businesses to respond swiftly to changing market conditions without compromising on talent quality.
Market insights: An RPO can aid businesses in leveraging analytics to conduct in-depth studies and analyse current workforce trends to understand the composition of a business’s existing employee base. This data-driven approach provides businesses with strategic insights into industry shifts and talent dynamics. By understanding the evolving landscape, RPOs guide businesses in making informed decisions about talent acquisition strategies.
Diversity and inclusion: RPOs actively promote diversity by sourcing from varied talent pools. Inclusive hiring practices enrich organisational culture and foster innovation. They recognise that a diverse workforce brings fresh perspectives, creativity, and resilience. By championing diversity, RPOs contribute to long-term business success.
Talent pipelines: Implementing an RPO enables businesses to cultivate robust talent pipelines, ensuring swift access to qualified candidates when roles open. Proactively nurturing relationships with potential hires guarantees a consistent flow of talent, significantly reducing time-to-fill and minimising disruptions. Moreover, RPOs streamline recruitment workflows, deploying efficient sourcing methods and accelerating candidate assessments, enhancing organisational agility, and maintaining a competitive edge.
Internal mobility: An RPO solution extends beyond recruitment and supports to facilitate career pathways, internal mobility, and succession planning, diminishing reliance on external hiring. Investing in upskilling internal employees proves invaluable for retaining talent, and is more cost-effective compared to external recruitment practices.
“Often, businesses struggle with a lack of visibility over their workforce, particularly regarding the technology needed to provide comprehensive data. Without this, workforce planning becomes an uphill battle. A talent partner can audit your workforce, identify skill gaps, and provide the necessary technology and data a business needs to ensure efficient and effective workforce planning.” – Head of Flexhuis UK, Justin Somerville-Cotton
Unlocking the potential of workforce planning
In today’s fast-paced business landscape, effective workforce planning stands out as a crucial strategic necessity for businesses. This process, essential for both current and future success, holds the potential to form a distinct competitive edge when implemented thoughtfully.
With its challenges such as data complexity, shifting demographics, evolving skill sets, market volatility, and the delicate balance between short-term and long-term focus, businesses may struggle to implement successful workforce planning. However, by partnering with a Recruitment Process Outsourcing (RPO) provider businesses can receive invaluable support and guidance to effectively manage and plan their workforce.
Unlock the potential of strategic workforce planning today. Identify your recruitment strengths and weaknesses through our recruitment process audit and receive a tailored report with expert advice on optimising your hiring process.