Despite the intense labour shortage and the growing skills gap, 38% of organisations state that they lack the time and financial resources to invest in strategic workforce planning. Many of these companies stated that investments in meeting current staffing needs were their top priority. Unfortunately for these companies, the lack of a workforce planning strategy can make it very challenging for them to build a workforce fit for the future.
While it’s true that workforce planning does require a time and financial commitment from the company, the reality is that today’s employers will find it difficult to remain competitive in their prospective industry without a strategic plan in place.
What is workforce planning, and how can it benefit your company? In basic terms, workforce planning is the process of evaluating the company’s current talent capabilities, predicting the future workforce needs of the company, identifying gaps that need to be addressed, and creating an action plan to close these gaps with consistent monitoring and adjustment.
When done correctly, workforce planning can not only save your company money, but it can also improve operational efficiencies, spur business growth and close the skills gap within your company. However, there are a few mistakes that businesses often make when creating a workforce planning strategy that could hinder its effectiveness.
6 most common workforce planning mistakes
To help your company avoid any type of unnecessary challenges, we’ve created a list of some of the most common mistakes company’s make when developing a workforce planning strategy.
no alignment with company strategy
One of the biggest mistakes many employers make is to treat workforce planning as a standalone strategy that is managed solely by the HR department.
Instead, it’s critical for your workforce planning strategy to work in alignment with the overall goals and objectives of the company. For example, where does your company want to grow in the next 3 years, what new products are going to launch in the near future and what markets does your company want to expand into? It’s only through this alignment that your organisation can develop an effective strategy to build a workforce that includes the specific skills and capabilities your company requires both today and in the future.
Additionally, your company can reduce the risk of wasted resources and improve outcomes by ensuring that workforce planning works in alignment with the company’s overall business strategies.
lack of senior leadership buy-in
It cannot be said enough — workforce planning will only work with senior leadership buy-in.
Unfortunately, securing an executive buy-in may seem like an uphill battle for many HR teams. After all, many organisations across industries are dealing with significant budget restraints as they work to recover from the global pandemic. Additionally, many executives may be hesitant to invest in long-term planning strategies when they’re still dealing with current workforce shortages.
It’s important for HR teams to understand these concerns facing senior leadership and to focus on the value that a proper workforce planning can bring to the company. The obvious benefit is that workforce planning can help the company build a workforce for the future by ensuring it acquires the talent, skills and capabilities it needs. This, however, is just one benefit of workforce planning. It can also help to reduce hiring costs, increase retention rates, improve business efficiencies, spur business growth and, most importantly, enable your company to remain competitive as the demand for skilled workers continues to intensify.
Ultimately, senior leadership must come to understand that it simply can’t afford to ignore making an investment in workforce planning right now.
not having a structured process in place
Many employers mistakenly invest solely in operational workforce planning. While this short-term planning technique may be able to help the company meet the day-to-day demands of the workforce, it does little to prepare your company for the future. To make the most of your planning efforts, it's important to define a clear process at an operational and strategic level.
As is the case with most long-term strategies, strategic workforce planning requires a proactive and well-structured approach. For example, your company must create a planning team that can meet continuously on a monthly, quarterly or semiannual basis. It also must be determined right from the start who will be part of the planning team as well as their specific roles and responsibilities. Additionally, it must follow an ongoing, step-by-step process that enables the team to compare current skill sets with future workforce needs to build a robust action plan.
Without a structured workforce planning strategy in place, it’s likely that your plan will fall apart before it has time to provide any type of real benefits to the company. Even if an unstructured plan does remain in place, it may not deliver the specific results your company needs. Furthermore, you may not notice the deficiencies until it’s too late.
no cross-functional collaboration
Collaboration is a key element of workforce planning. As mentioned above, a plan managed solely by the HR department will limit its level of effectiveness and may not work in alignment with the overall goals of the company. Instead, you need to develop a planning team where cross-functional collaboration is a top priority.
This team should include, but not be limited to, the following members.
- HR team: It's mandatory to have a member of the HR department as part of the planning team. After all, this department is responsible for the company’s recruitment and workforce management efforts. It only makes sense for them to play a vital role in workforce planning. In fact, HR professionals often take the lead in managing the planning team and typically develop and implement training and development programmes within the company.
- senior leadership: It’s equally important to have at least one senior leader as part of the workforce planning team. These leaders have a full vision of the company’s goals and can ensure the workforce planning strategy remains in alignment with overall business strategies. Additionally, this senior leader can function as a liaison between the planning team and company executives to ensure everyone is aware of the plan and to secure a continuous executive buy-in.
- financial leaders: Since workforce planning requires ongoing investment from the company, it’s vital to have a member of the financial department on the planning team. This member can help the planning team understand any financial restraints the company is facing and provide a realistic view as to what type of investment the company can make in regard to workforce planning over the next three, five or 10 years.
- managers and supervisors: It would be difficult, if not impossible, to develop a strategy for building a workforce for the future without insights from your managers and supervisors. These company leaders have direct knowledge of the skills needed on a day-to-day basis, as well as any current skills or labour gaps affecting output. Additionally, these workers can function as a liaison between the planning team and the workforce.
- IT department: Depending on the skills of other members of the workforce planning team, it may be necessary to include a member of the IT department. This member will be tasked with the collection of valuable workforce data, as well as transforming that data into an easy-to-read format for the team to use when making vital decisions about workforce planning.
lack of communication
It’s not uncommon for a company to take the time to create a workforce planning team and develop a strategy for moving forward, yet still, fail to put this plan into action. The reality is that it’s one thing to develop a workforce planning strategy, it’s another thing altogether to transform this strategy into an actionable plan that drives results. This is where communication becomes key.
For example, if the planning team fail to communicate their overall goals, plans and milestones to the executive team, they may fail to secure a continuous company buy-in. Or, if the planning team are unclear or fails to clearly communicate certain aspects of the plan, such as employee training and advancement opportunities, to the entire workforce, these efforts could prove ineffective as well.
It’s important for the workforce planning team to discuss communication methods early in the process. One team member can be responsible for all communications within the company, or your team can collaborate to determine the best communication tools to use for each aspect of the planning strategy.
For example, the HR department may be responsible for developing an employee training programme and for initiating communication with the workforce as to the details of the programme. Supervisors and managers, on the other hand, would be expected to have direct contact with the workers to encourage various training opportunities. Make sure you equip and train your managers to facilitate these conversations with their teams.
failure to use tech and data
Studies show that only one in three HR professionals believe that they are effective at using tech and data in the workforce planning process. This is an unfortunately small number, considering that the right tech and data can help to streamline the workforce planning process and deliver improved results.
One area in particular where data plays a crucial role is in predictive forecasting. Workforce planning is all about developing the right talent and skills for the right place and time. It would be extremely difficult for your planning team to make accurate future predictions without the use of technology and data collection.
The good news is that most employers are already collecting a wealth of workforce-related data. The trick is knowing how to leverage this data to provide real value to the team. It’s recommended to include a member of the IT department on the workforce planning team. This member will not only have first-hand knowledge of the types of technology already available within the company that can help streamline the planning process, but they also know what type of data is currently being collected and stored by the company.
For example, data collected through Workforce Management Software can provide information regarding the current skills within the company, identify skills gaps, track unfilled vacancies and forecast future workplace needs. Employee Relations Software, on the other hand, can be an effective tool for sharing information about training and career development opportunities within the company.
For a short guide you can use as a reference for building a strong workforce planning process, download our best practices in workforce planning guide today.