Workforce planning is a strategic process of aligning a business’s workforce with its current business goals. It is an important consideration for organisations as it helps to identify workforce gaps and needs, setting organisations up with the right people, with the right skills, at the right time. Modern workforce management presents unique challenges such as remote work, skill shortages and evolving business needs, businesses must take a proactive approach to workforce planning.
In this blog, we will cover what workforce planning is and how to do it effectively. Alternatively, get in touch with our team of experts for professional human resource outsourcing services today!
What is Workforce Planning?
Workforce planning is the process of assessing and managing an organisation’s workforce needs to meet its business objectives. It looks at:
- Forecasting staffing needs based on business strategy.
- Identifying skills gaps and talent shortages.
- Planning recruitment, upskilling, and internal mobility.
Operational Vs. Strategic
There are two main types of workforce planning: operational workforce planning and strategic workforce planning. Operational focuses on the short-term needs and immediate workforce adjustments. This is relevant for businesses with fluctuating needs, such as hospitality or retail. Strategic workforce planning, on the other hand, aligns workforce planning frameworks with long-term business objectives and goals. This ensures future growth and sustainability; it is relevant for businesses that are looking for sustainable growth and long-term talent retention.
Why Workforce Planning Matters
Benefits for Businesses
- Proactive Hiring – It prevents rushed, last-minute hiring decisions.
- Skills Alignment – Ensures employees have the right skills for business growth and identifies any skills gaps.
- Cost Efficiency – Reduces excessive hiring, overtime, and turnover costs.
- Improved Productivity – Matches people with the right skills into the right roles.
- Risk Management – Mitigates risks from retirements, turnover, and economic shifts.
The Australian Context
In Australia, businesses face unique challenges such as skill shortages, compliance requirements and economic uncertainty. Jobs and Skills Australia reports indicate a growing demand for skilled workers, making workplace planning an essential part of long-term goals.
Key Steps in the Workforce Planning Process
If you are an organisation that is looking to conduct strategic workforce planning, these are the recommended steps:
1. Analyse Current Workforce
Start by analysing the current workforce, identifying strengths and weaknesses as well as identifying any skill gaps. You can use HR software or workforce analytics tools to conduct an accurate audit of existing workforce skills and capabilities.
2. Forecast Future Needs
Forecasting future workforce planning needs addresses any upcoming surges in workforce supply and demand. For example, seasonal or project-based demand. Organisations should also consider factors such as industry trends, technology shifts and economic conditions that may affect workforce availability.
3. Identify Gaps
It is important to compare current workforce data with future workforce requirements. This will help you identify gaps and align your workforce with business needs and goals.
4. Develop Workforce Strategies
Recruitment and finding people with the right skills takes time. Organisations should consider this when developing strategic workforce planning. It is also important to think about upskilling your current workforce with learning and development courses to support employee growth.
5. Implement & Monitor
Once you have a strategic workforce planning framework in place, begin implementing it with clear milestones and KPIs. It is important to continue to monitor it over time and adjust it based on the changing business goals or market conditions.
Workforce Planning Tools and Techniques
There are several platforms you can use to effectively plan. HR software such as SAP and Workforce Planning by Workday helps automate workforce planning. Skills mapping, scenario planning, and HR analytics are also very helpful in successfully forecasting a business’s workforce needs.
Common Workforce Planning Challenges
Workforce planning is not without its challenges. Organisations must consider all variables when developing a workforce plan to remain agile and plan effectively. One of the most common challenges is skill shortages. Across Australia, there have been shortages in key sectors such as teaching, healthcare and technology. If there are high employee turnover rates, this can also affect having the right talent at the right time.
Another consideration is inaccurate or incomplete human resource information. This can affect planning as it makes it difficult to forecast workforce needs in line with business goals. All of these can be affected by economic uncertainty and regulatory changes as it adds a level of complexity for organisations operating across multiple states with compliance requirements that vary.
Best Practices for Workforce Planning Success
When building a successful workforce plan, here are our top tips:
Align HR with Business Strategy
Workforce planning should directly support an organisation’s strategic goals. By aligning workforce initiatives with business goals, companies can ensure they have people with the right skills in the right roles. This requires HR professionals to work closely with employees to identify any learning and development opportunities.
Engage Leaders and Employees
Effective workforce planning is a collaborative effort that involves leadership and employees at all levels. Engaging department heads in the planning process helps ensure that workforce strategies align with operational needs. Employees should also have a voice in discussions about skills development and career growth, fostering a culture of continuous learning and workforce agility.
Leverage Technology
Advanced HR analytics and workforce planning software can provide businesses with critical insights into workforce trends, skill gaps, and future hiring needs. Using AI integrations or HR analytics software can help organisations make data-driven decisions.
Focus on Flexibility
The workforce landscape is constantly evolving due to economic shifts, technological advancements, and changing employee expectations. Businesses must adopt flexible workforce plans that can adapt to these changes. This may involve implementing remote work policies, leveraging a mix of full-time and contingent workers, or investing in upskilling programs to prepare employees for emerging industry demands.
Continuous Review
Workforce planning is not a set-and-forget framework. Rather, it requires ongoing assessment and refinement to ensure that your business goals and strategies are aligned with your workforce. Regularly reviewing workforce plans allows businesses to respond to market changes, address skills shortages, and ensure alignment with evolving business goals. Establishing clear metrics and KPIs helps measure success and make necessary adjustments over time.
Conclusion
When establishing a workforce planning framework, organisations and human resource departments must look at their workforce as a whole rather than a single workforce supply and demand. This will help identify gaps, address employee turnover and set its workforce up for success. By proactively workforce planning, organisations can safeguard themselves against workforce shortages and ensure their long-term goals align with their workforce strategies.
E.L Blue has over two decades of experience in workforce planning strategies and has worked with a wide range of industries. Whether you need recruitment consulting or workforce planning services, we are here to support you.
For expert advice and knowledge on setting your business up for success, get in touch with our team today.