6 Step Approach for SWP
6 Step Approach for SWP

For successfully approaching strategic workforce planning (SWP), organizations should make sure they have good quality of employee as well as job architecture data and can visualize it in way that enables decision making.

It is however important to distinguish between SWP and workforce analytics. Workforce analytics (or people analytics) is more focused on the relationships between people motivators and business results. SWP on the other hand has a more long-term and strategic focus, with its main goal being employee development. Now here are some key elements of how to approach strategic workforce planning.

How to approach strategic workforce planning?

  1. Understand the market dynamics and their impact on the workforce
    There are many market dynamics that will impact the workforce that are important to take into account. For example:
    • Technological change: leads to the creation of new jobs and ways of working, thus new skills needed and an increased demand for certain skills. This makes the gap between a company's requirements and it's existing talent capabilities grow rapidly.
    • Enterprise agility: required ability to quickly adapt to change needs to be supported by a company's processes and culture (e.g. project-based work, multidisciplinary teams, virtual teams...).
    • War for talent: there is a fierce competition for in-demand skills, the need for companies to provide a good candidate and employee experience is increasing significantly.
    • Generally changing perceptions through a new generation of workers entering the market (millennials & Gen Z) that is more adept of "job hopping" as well as an increased need for internal talent mobility...
    It is important to understand the impact of those dynamics on your workforce to adapt your business and HR strategy to it. This responsibility does not only lie in HR's hands but is to be owned together with business AND finance.
  2. Translate the business objectives into job requirements to define your skill demand
    The first step towards meaningful modelling of your job and skill demand is designing a job architecture that capture the current full value chain of the organization by:
    • Classifying your functions and individual job profiles in a way that both the "how" and the "what" of a job clearly describe the specific contribution to value creation. One way to support that, is to involve the employees and function responsible in the design to capture the true essence of a function/job. Focusing on critical roles for the organization is a good starting point.
    • Keeping your job profiles simple and broken down into smaller tasks. Having this task-based approach will help you get a better understanding of all performed activities in an organization and will make it easier to associate skills to them. The skill part is important in order to later match the right people to the right jobs & tasks. These smaller parts of a job profile and their associated skills and competencies can also be individually re-used to define other jobs, enabling more flexibility and speed.
    • Attaching grades to your jobs (that are defined by the tasks and relevant skills) to be able to analyze the financial impact of the previously mentioned market changes on the workforce.
    After setting up a solid and well-defined job architecture, you can plan for and model the future requirements:
    • What new jobs and skills will arise? E.g. development of automation technologies, ethical responsibility of using automation technologies...
    • What jobs, tasks and skills will increase in relevance? E.g. leadership skills
    • What jobs will decline or become completely obsolete leading to re-skilling needs?
  3. Analyse current workforce
    This part remains one of the biggest challenges for many organizations. It is about understanding:
    • How is the current workforce performing?
    • What skills and competencies do employees actually have? What is their potential?
    • How are they developing?
    • What really matters to the employees (e.g. meaningful rewards)?
    One important requirement is to have performant reporting and analysis tool where you can review all the data related to your employees, jobs, and talent management processes. Having one source of truth will also greatly improve the ability to analyse data (less time to create reports, data easier to put in context...). The use of artificial intelligence and machine learning is also increasingly being used and can empower your workforce analytics e.g. recognizing patterns in employee behaviour, estimating risks (retention chance, turnover risk...).
    The other crucial point for achieving valuable workforce analysis is to gain visibility over existing skills as well as potential for growth. Here are some tips for that:
    • Involve your employees, their peers and managers in the recording of skills as they know best what they are truly doing.
    • Use different sources to gain knowledge on skills (own-evaluation, manager evaluations, peer surveys, social media...) and update that regularly based on daily jobs.
    • Incentivize employees to keep their skill profiles updated (gamified platform, mobile access, recognition, meaningful rewards, internal marketing...)
    • Track more than just existing skills. Look at attributes, competencies, interests and learning ability to estimate growth potential.
    • Continuously improve your skill catalogue (including future skill trends). The use of technology can be helpful to do that with things such a as skills clouds, machine learning to extract skills from texts...
  4. Understand the labour market supply
    It is now time to think about how to satisfy the previously defined job and skill demand. For that, it is crucial to understand the labour supply. What does that mean?
    • Analyse the historical behaviour of the internal workforce data: how have hiring and recruiting been going? What has attracted relevant talent so far? What are the signs/patterns to recognize high potentials? What promoting channels have worked best? What jobs and skills are abundant? Which ones are scarce?
    • Then have a look at external workforce data. What skills are abundant outside of the organization? What are job and skills trends among competitors? What type of occupations are people looking for (e.g., gig work, long-term...)? Understanding the labour supply within and outside of your organization, you can make better decisions about where to place your efforts such as where to hire, who you could/should hire, where to focus your learning strategy... So once the internal requirements are processes, you can contextualize the external workforce data through scenario planning.
  5. Analyse the talent and skill gaps
    Based on the defined job architecture data, the predictions on how market dynamics could impact the workforce, the modelling of the skills demand, as well as the analysis of the labour market supply, you can derive the gaps and plan for different scenarios. One thing to keep in mind, is that the gap analysis should be done regularly as both technology and jobs and skills evolve continously. The gaps identified today might be not relevant tomorrow.
  6. Define approach to address the gaps
    Closing the gaps will involve:
    • Adapting your HR operating model:
      HR operating model
      HR operation model
    • Tailoring learning strategy to re-skilling & up-skilling needs. Once you have identified the most important skills that the employees should develop, you can focus your learning content on it. Make sure that your learning offering not only gives the employees access to learning content, but enables them to learn (e.g. Learning culture, freeing time...) and also motivates them to (e.g. Better development opportunities, rewards, recognition...)
    • Adopting a more "skill-based" approach to talent management. Find out more about it here.
    • Setting up an internal talent mobility program to retain talent and enable easier re-skilling & up-skilling. More here.
    • Starting a talent marketplace open internally but also to the outside.
    • Adapting your talent acquisition strategy. This could imply looking at more short-term hires (e.g. gig economy)
    • Creating a culture of change and learning to support the upcoming HR initiatives.

For more details, do not hesitate to contact the author.

Written by: Dr. Ralph Köppen