9 Best Practices For Workforce & Capability Planning
We’ve said it before and we’ll say it again: traditional workforce planning approaches – where executives meet once a year to discuss talent needs and hiring goals – are becoming increasingly obsolete.
The pace of change in the external market is exponential, which means that decisions made nine months ago are very likely to become irrelevant.
Companies that rapidly allocate talent to opportunities have more than twice the likelihood of strong performance, and they also deliver better results per dollar spent – McKinsey
To stay competitive and responsive, HR teams must adopt new strategies for workforce and capability planning that are dynamic, data-driven, and continuous. So what should HR teams do, in order to modernize their workforce planning processes?
1. Adopt A Continuous Planning Approach ⏱️
Workforce planning should be treated as a living, breathing process rather than a static annual event. By adopting a continuous planning approach, HR teams can quickly adjust to changes in the market, technology, and internal business needs.
This doesn’t need to mean regularly revisiting and updating workforce plans to ensure they align with business objectives. It means rethinking your systems and processes to ensure data-driven decision making is fast and easy.
2. Make The Most Of Technology (Especially AI) ✨
A “continuous approach” sounds great in theory, but it’s not easy to do – without the right technology. The integration of AI and other advanced technologies is crucial for effective workforce planning.
Explainable AI, in particular, can revolutionize the way organizations understand and manage their talent (and allocate people to work). AI can help identify skills gaps, predict future talent needs, and even infer the skills that employees are likely to develop.
This helps HR teams to make more informed decisions and respond swiftly to changes – at scale.
3. Develop A Skills Intelligence Framework 🤓
AI can’t deliver useful results if it’s not applied to a clear, consistent, common data set – in this case, data that can apply to both people and jobs. Yup, we are talking about skills intelligence again!
A robust skills intelligence framework is absolutely essential for truly understanding the capabilities within your organization. By mapping out the skills each employee possesses, and understanding the external skills market, HR teams can better align talent with business needs.
This means creating a detailed skills taxonomy and regularly updating it to reflect the current skills landscape – something that smart AI can definitely help with.
Hirers leveraging skills data to find the right match are 60% more likely to find a successful hire than those not relying on skills. (LinkedIn)
4. Use Real-Time Data 🕝
Access to real-time data is critical for dynamic workforce planning. This data should encompass internal information, such as employee skills and performance, as well as external factors like market trends and industry benchmarks.
With the right HR tech vendor, you can combine these in one platform for incredibly powerful insights, contextualized to your organization.
Real-time data enables HR teams to quickly identify emerging skills gaps and respond proactively – which is the crucial shakeup that “workforce planning” needs.
5. Foster A Culture Of Agility 🤸🏾♀️
Cultivating a culture of agility within your organization is crucial for successful, dynamic workforce planning. Beyond simply introducing new systems and tech, you must encourage continuous learning and development, promote internal mobility, and be open to innovative workforce solutions.
An agile workforce is of course better equipped to adapt to new challenges, and seize opportunities as they arise.
Only 18% of U.S. employees say their company is agile. – Gallup
6. Engage In Scenario Planning (That Isn’t About The Past) 🔮
Scenario planning is a valuable tool for preparing for various future outcomes. HR teams should develop multiple workforce scenarios based on different business and market conditions. This helps organizations to be better prepared for potential disruptions, and ensures they have the right talent in place to navigate them.
Again, technology can help. Predictive analytics can show you what happens if your turnover or recruiting team decreases sharply, or you need to find skills in a new market. (Note that looking for patterns from the past alone will not be enough to plan for the future.)
7. Collaborate Across Departments – And Learn Some Lessons 🤝
Effective workforce planning requires collaboration between HR and other departments, such as finance, operations, and strategic planning.
Indeed, looking to other functions may be exactly what HR teams need to do: every large, sophisticated business can predict customer demand and manage supply effectively (Starbucks ensures they have coffee cups and beans ready, thanks to their deep understanding of operations, supply chains, and sales, for example.)
They can foresee risks to their business and adapt accordingly.
However, when it comes to talent management, most leaders admit they lack the same predictability. While they can forecast customer demand, they struggle to predict staffing needs like training, retention, or hiring.
Given that around 70% of a company’s resources are dedicated to human capital, this gap needs addressing.
Talent management is often driven by subjectivity, making it difficult to make data-driven decisions. Yet, the biggest risk to a company's success is not having the right people with the right skills to achieve key objectives. Maybe it’s time to think a bit more like the finance team.
8. Invest In Learning & Development 📖
Continuous learning and development are essential for maintaining a competitive edge – and are central to building dynamic organizations. HR teams must create opportunities for employees to upskill and reskill, ensuring that the organization can meet evolving business needs – from formal training programs, to on-the-job learning, and access to online courses and resources.
And this can represent another excellent use case for skills intelligence and AI. Imagine you could upskill exactly the right people, in the right number, to meet future skills demands – without having to comb through all their CVs and work history?
AI can match people to opportunities, whether they are internal or external, and whether the opportunity is a live role… or simply a great learning program that would plug a gap.
9. Implement Robust Talent Analytics (And Get Them Anywhere) 📊
Talent analytics provide valuable insights into workforce trends and performance. Ideally, HR teams would have the analytics to make data-driven decisions about hiring, talent development, and succession planning in the places they actually do their work, rather than having to dig them out from various platforms.
Ensuring that the organization is always prepared with the right talent at the right time shouldn’t have to mean jumping between programs. If you can get a nudge in Slack or Teams to make a new talent allocation decision, you allow more people to make better decisions, faster.
The old methods of workforce planning are no longer sufficient in today’s world – and they don’t have to be. Technology has moved us forward. As long as your leaders can get comfortable with some new approaches, as well as a culture of continuous learning and the use of trustworthy AI, HR teams are going to be well placed to ensure that their organizations remain agile, competitive, and well prepared for the future.