Strategic workforce planning

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Every organisation has a strategy, and every organisation makes a multi-year plan. An important aspect of a good strategy and a robust long-term plan is being aware of the people who make up the organisation.

While the strategy and long-term plan are often well-grounded in finance and marketing, a chapter dealing with the people in the organisation, the human capital, is missing. In other cases, the headcount needed has been calculated at a rather high level of abstraction, e.g. per division, but there is no vision of the competencies that these people must bring along.

This is strange, given that personnel costs are among the top 5 most important cost items in many organisations, making human capital a control knob that can be turned to influence margins.

This is even stranger when research has shown that having the right people on board is a key condition for success, meaning that people also impact the margin/creation of value from this point of view.

In fact, every strategy and multi-year plan should contain a chapter on ‘people’. Ideally, there should be a strategic workforce plan, outlining the number of people (headcount), their characteristics (competencies) and the funding (remuneration) needed at which place (location), in which form (employment relationship) and at which point in time (time).

Strategic workforce planning (SWP) is the appropriate tool to create a strategic workforce plan.

What is Strategic workforce planning (SWP)?

Ask ten people the question “What is Strategic workforce planning (SWP)”, and you will get ten different answers. Here is an attempt to come to a definition:

In the world of workforce planning, a distinction is made between operational, tactical and strategic workforce planning (SWP); sometimes talent management is also still included.

We will first explain the distinction between operational, tactical and strategic workforce planning.

Operational Workforce planning
Tactical workforce planning
Strategic workforce planning (SWP)

Operational workforce planning refers to the deployment of staff in the short term. It is also called rostering. The time horizon for operational workforce planning is usually 0-6 months.

Tactical workforce planning concerns the deployment of staff in the medium term. The time horizon is usually 6-18 months. Tactical workforce planning usually coincides with the calculation of next year’s budgets. As such, it is sometimes called ‘budgetting’. Another term that is sometimes used is ‘capacity planning’.

Finally, there is strategic workforce planning (SWP). Here, the planning horizon is 18+ months. Besides a longer time horizon, there are several other key differences with the previously mentioned forms of HR workforce planning. Strategic workforce planning (SWP) explicitly looks at trends/scenarios that could influence the need for staff. This includes matters such as legislation and regulation, ageing, digitisation, the launching of new products, etc. Since the planning horizon lies further into the future, a strategic workforce plan is exposed to greater uncertainty than an operational or tactical plan. After all, a lot can happen between today and, say, 3 years from now. Since the uncertainty is greater in strategic workforce planning (SWP), a plan that points in the right direction is usually good enough, whereas an operational plan must be 100% correct.

Now that the difference between operational, tactical and strategic planning is clear, we can explain the relationship between strategic workforce planning (SWP) and talent management. People who want to get started with strategic workforce planning (SWP) sometimes associate it with issues like succession management or personal development. We at AnalitiQs believe that these issues are part of talent management, however, making them the results of Strategic workforce planning (SWP). Once it has become clear how many people of a certain type are needed at a certain time and place, it is possible to determine how to meet this need. Internal talent development is a route that is often used to achieve this. Another route is that of external talent acquisition through recruitment, partnerships or takeovers.

Strategic workforce planning (SWP) case examples

Throughout the years, AnalitiQs has gained a lot of experience with Strategic workforce planning (SWP). Below are a number of case examples involving Strategic workforce planning (SWP).

Example 1 | Network manager

The energy world is changing rapidly, and grid managers play a crucial role. Energy networks must be adapted to accommodate the new forms of energy and their distribution. Alongside the energy revolution, a general digitisation trend is underway, which also impacts the nature of work. Finally, the sector is affected by ageing. The grid manager wanted to know how all of these trends will impact the supply and demand of staff for the Operations Department. Specifically, questions were raised such as “When and to what extent will these trends affect our work?”; “Will there be a staff shortage?”, as is sometimes suggested; “What competencies do our people need?”; and “Can we deploy people with rare, specialist knowledge in a smarter way, so as to make optimal use of them?”

Example 2 | High-Tech Company

The Employee Value Proposition (EVP) of a high-tech company wanted to gain better insight into the required quantity, quality and cost of its future workforce, in order to be better equipped to serve its customers and offer its workforce a good work-life balance.

Trends influencing this forecast were:

The introduction of a new product.
Increased sales of service contracts for the products.
Increased efficiency in carrying out the work.
The increase of local knowledge so as to become less dependent on the head office.

In addition, this project devoted special attention to the development of staff towards assuming managerial roles; internal advancement was preferred as those trained internally know the products better and already have a network within the company.

Example 3 | Financial services provider

A financial services provider wanted to significantly digitise its services; the development of a new service platform was crucial to achieving this objective. However, what does digitisation mean for the number and type of people that we need? And also, which kind of employment relationship (permanent/flexible) is optimal, given that there will be a shift from developing to managing the platform once it is in place?

Example 4 | Healthcare institution

A care institution was faced with ageing of the workforce and the general population in its service area. This trend was reinforced by young people leaving the area. The institution was also confronted with new regulations that tightened the requirements for performing certain care responsibilities. The care institution wanted answers to the following questions: “How will the demand for our services develop?”; “How big a staff shortage can we expect as a result of this?”; and “To what extent can we meet the stricter requirements by further developing our own people?”

Example 5 | Insurance company

In order to be ahead of the workforce challenges of the coming months and years, an insurance company wants to plan better ahead. They therefore start with strategic workforce planning. AnalitiQs has designed dashboards with the most important HR data to gain more insight.

In which ways can AnalitiQs help you?

AnalitiQs helps organisations set up their strategic workforce planning (SWP). We can do this in four ways, ranging from furnishing a strategic workforce planning model for you to work with to taking the entire process out of your hands.

SWP Model

Firstly, AnalitiQs can furnish a strategic workforce planning model which your organisation can use after a short user training course.

SWP Outsourcing

Secondly, AnalitiQs can handle all aspects of strategic workforce planning (SWP) in the organisation, including software, project management, data processing, reporting and workshops to uncover assumptions and trends. The final product of such a collaboration is a ready-to-use strategic workforce plan and an SWP process that has been both proven and recorded, so that the organisation can periodically repeat it.

SWP Training

Thirdly, we offer strategic workforce planning (SWP) training courses for organisations and individuals who wish to educate themselves about the SWP process. This includes questions such as which functions play a role in Strategic Workforce Planning (SWP), which steps are to be taken to arrive at a strategic workforce plan, which data are needed, how to determine relevant trends and scenarios, how to translate these trends and scenarios into workforce impact, etc.

SWP Roles

Fourthly and finally, we can fulfil a specific role in your strategic workforce planning (SWP) process, for example that of a Data Scientist, who collects, compiles and structures data, carries out statistical analyses and produces reports. Or the role of a project manager, who guides the organisation through the Strategic Workforce Planning (SWP) process in a structured manner and ensures that all deliverables are furnished on time, within budget and at the right quality.

Benefits of Strategic Workforce Planning (SWP)

Having a strategic workforce plan offers many advantages. The four most important benefits are highlighted below:

Firstly, it is a way to implement the strategy properly and in a timely manner, leading to a competitive advantage and thus turnover and/or margin growth. “Get the right people on the bus in the right seats”- Jim Collins – Author of Good to Great.
Secondly, workforce planning is a way to keep costs under control. Organisations with an early awareness of which people and competencies they need to achieve their strategy are able to anticipate. As such, they can avoid costly reorganisations and redundancy schemes in times of contraction or shifting focus. During periods of growth and diversification, on the other hand, it prevents the need to hire expensive external staff at the eleventh hour, pay starter bonuses to bring in talent faster or engage in expensive takeovers to acquire certain competencies on a larger scale.
Thirdly, it provides the organisation with tools to flesh out follow-up plans based on the strategic workforce plan. For example, Recruitment can determine the level of future demand for the organisation’s services and thus the number of people they will need to recruit, while the Learning department knows which subjects require training and how many people will need to acquire certain skills.
Fourthly, a strategic workforce plan brings peace of mind. If there is timely certainty about the organisation’s course and its effects on the demand for staff, both can be communicated at an early stage. This means that staff will have time to gradually get used to and prepare for the consequences of the plan, for example by applying internally, taking training courses or pursuing their ambitions elsewhere.