How do we retain our top talent?
Do we require more workforce with diverse skill sets?
What are some skill gaps in our organization?
These are some pertinent questions to consider when building a perfect workforce plan.
In today’s talent-based economy, the human capital or workforce forms the backbone of every successful business. Therefore, workforce planning is essential to leverage resources’ maximum potential.
In simple words, workforce planning helps establish the skills needed to meet the present and future business goals.
However, despite its value, the workforce is often not carefully planned, measured, or utilized. Therefore, every organization must aim for effective workforce planning to enhance business efficiency.
This article will cover the fundamentals of workforce planning, including its types, and benefits in detail.
Let’s begin:
What is workforce planning?
Workforce planning is the process of forecasting, planning, and identifying the right people with the specific skill sets is available for the right job at the right time and cost. It helps identify the demand vs. supply gap so that organizations can proactively implement corrective measures to reach its goals. This means that there are no over or understaffing situations in a company.
Thus, analyzing workforce plans regularly can help create an optimally staffed and trained workforce capable of responding to the evolving business needs.
Let’s take an example for better understanding.
Suppose a graphic design agency is looking to expand its business by adding digital marketing to its services. For this purpose, it requires a plethora of skilled employees with experience in search engine optimization, content marketing, social media, and other relevant areas.
Using a resource management tool, the management can have visibility of a company-wide resource pool and their competencies and skills. It can help determine if any existing human resources have some experience in any vertical of digital marketing as their secondary or tertiary skill. If so, the management can upskill those resources to reduce hiring costs.
If there is no resource with any such skill, but shows interest in learning it, the manager can create a training program to equip them with the requisite skills. They can also initiate the hiring of new resources with the required skill sets to meet skill demands for the new vertical if necessary.
This brief analysis of your current workforce capacity, future needs, and how you plan to bridge the gap between demand and supply is termed workforce planning.
Primarily, there are two types of workforce planning – operational and strategic.
Operational workforce planning helps determine the business’s immediate priorities for a duration of around 6 to 12 months and allocate resources for them accordingly. It is aimed at managing day-to-day operations and addressing ad-hoc changes effectively and efficiently.
On the other hand, Strategic workforce planning assists in planning and aligning the organizations’ talent strategy with long-term business goals and objectives. In general, workforce planning for any duration beyond three years is considered strategic workforce planning.
Now that the concept of workforce planning and its types are clear, let’s understand the benefits that an organization can expect from it:
Significance of workforce planning in enhancing business efficiency
Workforce planning is invaluable for every organization in a number of ways and paves the way for increased business efficiency. In addition, using the right planning tool or resource management software can help implement workforce planning more efficiently and leverage its potential benefits.
Here’s how.
Reduce project resourcing cost significantly
Effective workforce planning enables a company to develop the right resource mix for the projects and avoid cost overruns. They can deploy resources from low-cost locations across the globe without compromising deliverable qualities.
Using a resource management tool, the manager can also filter resources by location, cost rate, and other parameters. It will help them narrow down the search for the most cost-effective resources and prevent the allocation of over/under skilled ones. Thus, it prevents the last-minute hiring of high-cost resources.
Forecasts and bridges capacity-vs-demand gap
Workforce planning facilitates forecasting the demand of resources for upcoming projects. That way, the manager can analyze the existing capacity and identify the capacity vs. demand gap by using a resource management tool. Accordingly, they can take appropriate resourcing measures to fill the gap and ensure projects’ success.
For shortage of resources, the manager can retrain or upskill benched resources to fill skill gaps or hire a contingent or permanent workforce. For excess resources, they can bring forward project timelines or restart shelved initiatives, etc. Moreover, resource forecasting and capacity planning enhance business profitability by reducing last-minute hiring.
Enables competent resource allocation
An effective workforce plan helps identify and deploy the right person for each job. It helps prevent the deployment of a senior resource for a low-priority job that can cause budget overshoots and increase disengagement. On the other hand, it also minimizes the chances of time overruns or performance challenges that can arise by assigning high-priority roles to junior or inexperienced resources.
A resource management tool with its filtration feature helps ensure competent resource allocation across the enterprise. Managers can find the best-fit resources by looking into the qualification, skills, experience, cost, and availability and assigning them to suitable projects. Additionally, as every resource is given the work matching their skills and interests, it increases the workforce’s engagement and reduces unplanned attritions.
Improve productive workforce utilization
Workforce planning helps identify if the resources are spending their time in billable, strategic, or non-billable activities. They can also ensure that no one is under or overworked against their capacity.
Using saviom’s resource management tool, the managers can procure real-time resource utilization metrics. It helps determine the utilization levels of individual resources in billable, strategic, and non-billable work. Accordingly, if any resource is spending significant time in low-priority work, they can mobilize them to billable/strategic work and maximize productivity.
Facilitates company-wide talent tracking
Talent tracking is a persistent challenge for any organization. However, workforce planning helps to minimize it by facilitating a dedicated process to form a centralized skill inventory that keeps the workforce’s competency information up to date.
Using a resource management tool, managers can create a unified talent repository of all the resources across the organization. That way, managers can not only track and record resources skills but also update them on a regular basis. It, in turn, helps to find the right candidate for each job and avoid wrongful or unplanned hiring of similar skillsets at a higher cost.
Conclusion
Improper workforce planning leads to issues like increased resource costs, poor pipeline project management, unplanned attritions, ineffective capacity management, and more such consequences. Therefore, every organization must create a robust workforce plan. By using a resource management tool, you can achieve it easily and enhance business efficiency. It gives your organization a competitive edge and helps you achieve short-term and long-term goals successfully.
