Workforce Planning: Now Is the Time to Upgrade Your Plan

Most of us have read about upcoming workforce trends like decreasing employee loyalty, differing generational expectations, and the impending retirement of the baby boom generation, but surprisingly few organizational leaders are fully aware of how those issues will impact them.

Several of the organizations I have worked with in recent years have discovered aspects of their business that could lose more than 70% of their workforce in the next three years alone.

 

The time to read about trends is over. Now is the time to act, to develop, or to update your workforce plan to ensure that it accurately forecasts and triggers appropriate action. Nothing could be more strategic than looking at the big picture and developing action plans that prepare your organization for the future.

Recruiting Is Backward Looking

I challenge you to find a single recruiting report that doesn’t report “history” (what happened last year). Telling managers how many people they hired last year, their time to fill, or their cost per hire might be interesting, but they cannot do anything about the past. Instead, talent management needs to focus efforts on the future, where preventive action could make a significant difference in recruiting and retention results.

Recruiting Is Mired In Fighting Fires

Most recruiting functions are so busy handling day-to-day activities and emergencies that they forget to spend the necessary time preventing the fires from occurring in the first place.

Allocate a portion of your resources toward forecasting and developing a strategic workforce planning effort. Organizational leaders need to understand that the recruiting function must be funded adequately, even in times when requisition loads are small, to allow the function to plan, design, and develop programs to support projected levels of recruiting in good times.

Understanding Traditional Workforce Planning Efforts

Over 90% of the workforce plans that I come across are merely mundane statistics. Many of these plans end up gathering dust on shelves because they don’t drive action. Do not stop when you develop workforce forecasts; instead, put together a workforce action plan. A workforce action plan is different in that it drives managers and recruiters to “act differently” and identifies how to respond to changes in the business environment. Plans that don’t drive actions are a waste of effort and unfortunately, that’s what invariably happens.

The Business World Has Changed

It’s an unforgiving world for those who don’t plan. In the rapidly changing world of business and technology, a failure to plan and anticipate can spell disaster. Business managers and recruiters no longer live in a world of isolated companies and markets.

In a global economy, when a major player stumbles, there is always another ready to instantly move in and seize the opportunity. Whenever an organization comes out with an innovative product or service, it’s copied so fast that it’s hard to make a profit over a long period time off of any new innovation. In past decades, companies could make errors and later catch up. In the 21st century, there isn’t time to catch-up.

Workforce Planning Adds Significant Capabilities

There are many outputs that result from excellent workforce action planning. Some of the most significant ones include:

• No delays. To ensure that the firm can meet production goals by having the right number of people.
• The right skills. To increase product development speed because the firm has the brightest people with the “right” skills.
• Rapid replacement. To be capable of rapidly re-filling positions that become vacant due to “sudden turnover,” so that production doesn’t miss a beat.
• Lower turnover rates. Because employees move rapidly throughout the organization and are continually being developed, they are less likely to have low morale or to leave.
• Low labor cost. The capability of rapidly reducing labor costs without the need for large-scale layoffs of permanent employees.
• No layoffs. Opportunity to avoid the need for layoffs by managing headcount to prevent a “surplus” of talent.
• Employee development. To be able to ramp up projects rapidly because the firm has already developed its internal talent so that there is a sufficient amount available when necessary.
• Early warnings. Managers will get warning “alerts? so that they can plan ahead for replacements for upcoming retirements and turnover.
• Take advantage of opportunities. Talent management resources are managed more efficiently so that the firm has the available resources to take advantage of talent “opportunities” like poaching from a weakened competitor or hiring exceptional talent during tough economic times.

Two Primary Elements in the Workforce Action Plan

1. The workforce forecast. In this phase you forecast or project increases or decreases in company growth and the corresponding impact that that growth rate has on talent needs. Most forecasts also include estimates of future vacancies (due to turnover), transfers, promotions, and the relative “availability” of internal and external talent to meet future needs.
2. The workforce action plan. This element of the plan is the largest part. It outlines what specific actions need be taken in each of the different HR areas that relate to talent management. Action plans are developed to attract, retain, redeploy, and develop the talent we need to meet the forecasted needs.

Events to Forecast or Anticipate

It doesn’t take a rocket scientist to realize that the world of business is changing and that anticipating what types of events may occur is essential. Some of the events that recruiting needs to anticipate and have plans to handle appear in newspaper headlines almost everyday. They include:

• Major growth in consumer demand.
• Labor shortages, surpluses, and opportunities.
• Competitor actions including growth and layoffs.
• Economic, social, legal, or political factors that can impact your business or talent management.
• A shift in production to new regions.
• Terrorism and other physical disasters that impact your ability to do work.
• Stock market downturns that impact your ability to raise capital.
• Mergers and acquisitions at your firm or in your industry.

Three Action Areas

In order to prevent upcoming problems, develop a specific action plan on how to handle each problem. I divide these potential actions into three different “action areas,” including:

1. Eliminate the surprises. Talent management needs to limit the stressful “trauma” related to being surprised. A workforce action plan has the capability of providing managers with a long-term forecast of potential positive and negative events so that they have plenty of time to prepare for them.
2. Identify “just around the corner” problems right before they occur. If you have an early warning process, it is much easier to minimize any damage. Talent management must develop a similar system to warn managers immediately, long before the problems and opportunities that you forecasted actually begin occurring.
3. Take advantage of opportunities. Most workforce planning is focused on solving or preventing problems, but organizations must also plan to take advantage of an opportunity. Positive opportunities might be chances to hire individuals who are normally not in the job market, or opportunities to “ramp up hiring” because the competitor with a superior employment brand has just instituted a hiring freeze (meaning you will have no competition).

Workforce Planning Has a High ROI

Anticipating and developing action plans for events, rather than reacting to them, is difficult. But being strategic is, by definition, more difficult than being a tactical player. The rewards related to anticipating events are significantly higher than just reacting to them, so enduring a complicated or difficult process is worth it.

Remember, accurately predicting who and why a team will win (or lose) the Super Bowl or the World Cup will get a lot more attention than congratulating the winner the day after the game.

Last Words

With the Internet age and huge meta-databases, there is an abundance of data and information that makes forecasting future events much easier. I recommend that top management work with the business strategic planning functions, as well as product development and budgeting, to get some help in identifying what events are likely to occur both within and outside of the organization.

Top management must then develop a compelling case for action and an “action plan” that makes it easy for managers to know exactly what steps they must take to prevent a problem or take advantage of a talent opportunity. There is no better time to begin than today.