What is strategic workforce planning and how does it benefit a business?

As we enter an age of consistent full employment, the value of advanced strategic workforce planning is more vital than ever.

Building a highly-skilled workforce ready for the future of work is increasingly complex. Skills shortages are present across almost every sector — from health and social work to financial services. Finding the candidates to fill roles long term is more expensive than ever.

So what can businesses do in such a raw talent economy?

By 2020, the European Commission believes that 756,000 jobs will be left unfilled in the digital sector.

Smart businesses are starting to understanding that strategic workforce planning is the solution. As supply and demand in the talent market edge further apart, human resources are playing a more significant role in business strategy. After all, without the right people on board, how can business goals be met?

The contingent workforce: help or hindrance?

In some respects, the rise of the contingent workforce is helping businesses better access the human capital they need. Indeed, the future workforce will no doubt see an exponential rise in contingent talent.

Without foresight, hiring skills on a temporary basis can lead to short-term thinking, a reduction of oversight and spiralling spending. Businesses need to think long term. To help them, human resources departments need to be more strategic, and procurement departments need to be aware of the long-term implications of short-term cost savings.

But what exactly is strategic (or advanced) workforce planning, and how does it help businesses save money and drive success?

What is strategic workforce planning?

Strategic workforce planning is a process within a business or organisation that anticipates the current human capital needs not only for today but for the future. By implementing a strategic workforce plan, a business can ensure that it has the resources in place to achieve its long-term goals.

Though strategic workforce planning is in no doubt essential, it is far from a simple process. Primarily, it is built on advanced data analytics, from both HR and procurement, which is then analysed by experts to obtain a full grasp of current talent gaps and overstaffing in certain departments, as well as to anticipate the need for new staff as a business develops.

Doing so enables a business to build a stable, productive workforce that works at optimum efficiency. This is achieved without investing money in unnecessary talent; thereby fully optimising return on investment (ROI).

Leaders within the HR and procurement professions are beginning to realise that a strategic approach is the only option, especially as the digital economy is rapidly changing both the way teams work as well as the structure of teams within a business.

In the US, two-thirds of hiring managers believe that implementing strategic workforce planning will help cushion the blow of rapid technological change to the way we work. This number will no doubt increase as businesses better understand workforce planning.

What are the business benefits?

Once a strategic workforce plan is in place, businesses can identify gaps within their current talent pool. Knowing exactly where they need to hire can better focus human resources teams — freeing up time to hire the most sought-after talent within specific industries and allowing organisations to stay one step ahead of their competition.

This also has a knock-on effect for organisational KPIs. Across every part of a business, driving growth is essential for success. Data delivered from advanced workforce planning can allow a business to constantly evaluate and reassess its performance metrics. Without such insight, stasis can occur and growth naturally deteriorates.

The biggest effect, however, is the visibility it gives for the future. Every business leader, human resources professional and procurement expert knows that it’s more difficult than ever to predict the future. Ten years ago, the pace of change was steady enough to have confidence in their future projections, often based on experience and expertise.

But strategic workforce planning gives a more thorough overview of the future. Not only can it save organisations time and money, but it also allows HR and procurement to drive change in an organisation. Ultimately, it gives them more of a say when it comes to defining a business strategy.

Want to learn more about strategic workforce planning? Download our report today to get a full grasp of the trend that is changing the face of HR, procurement and business leadership.