Understanding Workforce Planning

1. Overview of Workforce Planning

Workforce planning is all about making plans for the people in an organization. It’s about making sure that the right people are in the right jobs at the right time. This planning usually looks ahead 3–5 years. It covers everything from hiring new people to managing their performance, deciding how much they get paid, and training them.

The U.S Office of Personnel Management says that strategic planning for human capital is about designing a clear set of policies, programs, and practices. (Office of Personnel Management, 2008) These should all work together to help achieve the organization’s goals.

The Office of Personnel Management’s planning guide identifies the following key parts of workforce planning:

• Knowing what direction the organization is heading in
• Understanding what the customers and stakeholders want to achieve with their workforce
• Having strategies or objectives to reach these goals
• Having a plan to put these strategies into action
• If needed, having a plan to manage any changes
• Having a system to keep track of everything

To make a good plan, you need to understand a lot of things. You need to know what the organization’s goals are, how much money is available, what the current workforce is like, and what the senior management and stakeholders think about the workforce. You also need to understand the factors that affect the workforce. In a previous lesson, we reviewed a number of external factors that impact HR and planning such as social, cultural, economic, political or legal changes. The goal is to create a vision of what the future workforce will look like.

The plan for putting everything into action is like a roadmap. It’s also a framework for changing the way things are done. The system for keeping track of everything is how you measure success. It’s important to check how well everything is going and whether the objectives are being met.

The Office of Personnel Management’s guide suggests collecting data to identify key themes through HR metrics analytics. As discussed in a previous lesson, analytics can show themes that can highlight any gaps between the current and desired workforce. These themes then become the goals of the plan.

IN CONTEXT

Sunshine Hotels faced challenges with staff performance and leadership. They have been keeping metrics and notice, through analytics, that there is a general theme around the level of skills and experience of new hires.

To address this, they develop a goal of hiring workers with specific abilities and launched a recruitment drive at hospitality schools to attract skilled workers. They also introduced monthly performance reviews to provide clear feedback to employees. Additionally, they created a leadership training program for promising staff members. They set goals and continued to monitor improvement and within a year, they saw a 25% increase in employee retention, a 20% improvement in performance, and promoted three employees to managerial roles.

It is important that workforce planning supports and reflects strategic planning for the organization and departments. Incorporating the strategic plan into workforce planning ensures that employees’ skills and roles match the company’s goals. This helps use resources wisely, boosts productivity, and prepares the organization for future changes and needs.

IN CONTEXT

The U.S. Government Accountability Office laid out the following priorities when creating its workforce plan.

Performance Goal: Strengthen recruiting and hiring initiatives to attract a diverse workforce.

Human Capital Initiatives:

• Improve recruitment program by expanding efforts to maintain relationships with colleges, universities, and pipeline and professional organizations through participating in virtual outreach efforts, hosting representatives from partner institutions, and inviting candidates to visit GAO.
• Build annual recruitment plans based on analysis of data from prior years, with consideration to GAO’s workforce diversity plan, budget, and workforce planning needs.
• Monitor hiring process data and compare this data to established goals.
• Offer incentives where needed for positions that are hard to fill to help recruit and retain staff with critical skills.

Quantitative Measures (Accountability)

• Meet or exceed established benchmarks to maintain a diverse workforce.
• Meet the 80-day goal (+/− 1 percent) for the hiring process.
• Meet the new hire target established in GAO’s performance and accountability report

(U.S. Government Accountability Office, 2013)

try it

Directions: When considering the GAO’s workforce plan, how would you answer the following questions?

How can the GAO’s strategy of maintaining relationships with colleges, universities, and professional organizations enhance the recruitment process?

The GAO’s strategy of maintaining relationships with colleges, universities, and professional organizations can enhance the recruitment process by providing a steady stream of potential candidates who are already familiar with the organization and its goals. This could lead to a higher quality of applicants and a better fit for the organization.

In what ways might the monitoring of hiring process data contribute to meeting the established goals of the GAO?

Monitoring hiring process data can contribute to meeting the established goals of the GAO by providing insights into where the process is effective and where it needs improvement. For example, if the data shows that a particular stage in the hiring process is causing delays, steps can be taken to address this issue and improve overall efficiency.

How could offering incentives for hard-to-fill positions impact the recruitment and retention of staff with critical skills?

Offering incentives for hard-to-fill positions could impact the recruitment and retention of staff with critical skills by making these positions more attractive to potential candidates. This could lead to a larger pool of qualified applicants and increase the chances of finding the right person for the job. Additionally, incentives could also increase job satisfaction and reduce turnover among current employees.

terms to know

Workforce Planning

Ensuring the right number of employees with the right skills are available when needed.

U.S. Office of Personnel Management

Manages federal human resources.

U.S. Government Accountability Office

Audits and evaluates federal government operations.

1a. Defining Workforce Planning

HRZone defines workforce planning as “the process of ensuring an organization has current and future access to the human capital it needs to perform effectively.” (HRZone)

Workforce planning is far from a simple set of tasks. It’s a crucial process where a company’s goals, values, dreams, and real-world operations are either accurately shown or misunderstood. This process can either unlock people's potential or waste it. Basically, workforce planning is about making sure a company’s strategy for its employees matches its business strategy, so they work together smoothly. When done right, it makes sure companies have the right people working for them, both now and in the future, without overspending.

There are also legal and fairness aspects to workforce planning. The process creates a system that can either continue or reduce the chance of discrimination, and either lessen or increase the risk of legal issues. There are many ways the workforce planning process can go wrong, and these problems can get bigger when these results are used for hiring, choosing, paying, and evaluating employees.

2. Importance of Workforce Planning

Workforce planning is a crucial process that ensures a company’s success by optimizing its most valuable resource - its employees. This process involves identifying the skills needed in the workforce, both now and in the future, allowing managers to make informed decisions about hiring, training, and development. It is important that HR is utilizing data, metrics and analytics to identify needs, monitor trends and confirm impact of changes. This proactive approach allows companies to adapt to market changes, maintain operational efficiency, and stay competitive.

Workforce planning goes beyond just filling job vacancies. It involves understanding the skills and competencies critical to the organization’s success and ensuring they are present within the workforce. This requires a deep understanding of the organization’s strategic objectives, the external market conditions, and the internal workforce capabilities.

HR can utilize a variety of data to make informed decisions in workforce planning.

EXAMPLE

Employee performance metrics can help identify high performers and areas where additional training might be needed. Turnover rates and exit interview data can provide insights into why employees leave and help develop retention strategies. Labor market trends and salary surveys can be used to design competitive compensation packages.

Workforce planning is both legally compliant and operationally advantageous. It helps organizations comply with employment laws and regulations, thereby reducing the risk of legal issues. From an operational perspective, it ensures efficient workforce utilization, with the right people performing the right tasks. This leads to improved productivity and efficiency.

Workforce planning also provides a structured approach to managing workforce changes. Whether these changes arise from market conditions, technological advancements, or internal factors, workforce planning allows companies to respond in a systematic and effective manner. This adaptability is crucial in today’s dynamic business environment.

think about it

How does workforce planning help a company stay competitive and adapt to changes in the market? Why is it important for workforce planning to focus on more than just filling job openings? How does workforce planning help companies follow employment laws and improve their operations?

2a. Driving Factors of Workforce Planning

Several factors influence workforce strategic objectives. Market trends, such as the emergence of new technologies, shifts in customer preferences, or competitive pressures, often necessitate the development of new skills and competencies within the workforce. Additionally, regulatory changes, like new data protection laws, can compel companies to hire specialists such as data privacy experts. Organizational changes, including mergers, acquisitions, and restructurings, can create new roles or eliminate existing ones, thereby driving the need for workforce planning.

Workforce demographics also play a crucial role; retirements or changes in the availability of certain skills in the labor market can significantly impact workforce planning. Business growth is another critical factor; as companies expand rapidly, they must ensure they have the right personnel to support this growth. Lastly, risk management is essential in workforce planning. For instance, succession planning is vital to ensure that there are qualified individuals ready to step into key roles when necessary. These factors collectively shape the strategic objectives for workforce planning.

key concept

Several factors influence workforce planning objectives. These include market trends, regulatory changes, organizational shifts, workforce demographics, business expansion, and risk management. Each of these elements is essential in shaping how companies plan and manage their workforce to meet both current and future needs.

term to know

Organizational Shift

A significant change in a company’s structure, strategy, or operations to improve performance.

REFERENCES

Office of Personnel Management. (2008, April 28). "Human Resources Management in Agencies; Final Rule." Office of Personnel Management. https://www.govinfo.gov/content/pkg/FR-2008-04-28/pdf/E8-8661.pdf

US Government Accountability Office. (2013). "GAO's Human Capital Strategic Plan 2013-2015." United States Government Accountability Office. https://www.gao.gov/assets/660/655826.pdf

HR Zone (2019, September 10). "What is Workforce Planning?" HR Zone. https://www.hrzone.com/hr-glossary/what-is-workforce-planning