Experiencing rapid growth? Start here.

Is your company in reaction mode, unable to hire in time to make the most of a new market opportunity? Or constantly scrambling to fill key staffing gaps, often at a significant cost and not getting the best hires? Is your staff worn down because they are always doing extra work to cover vacant roles? There’s a better way.

Step 1: Consider workforce planning

Workforce planning is a strategic process that helps organizations anticipate future resourcing needs.

A robust workforce planning is your first step. Workforce planning is a strategic process that helps organizations anticipate future resourcing needs. A workforce planning aligns with your strategic plans, laying out staff numbers, locations, roles, and capabilities that will be required to meet your goals and ambitions. A workforce planning also outlines how to attract and recruit the staff you need, as well as how to tap into both obvious and hidden pools of internal talent.

There are 2 types of workforce plans.

  • Strategic Workforce Plan: aligns to the 3–5-year business plan. Today 3-year plans are more common than 5-year.
  • Operational Plan: aligns to the 12–18-month recruitment forecast.

Step 2: Build your business case

Workforce planning is not a quick fix. Because it needs to be aligned to your business plan, you will need input and support from senior leaders in your company to make it successful. Build a compelling business case to win stakeholder buy in.

A great way to do that is to show some powerful metrics. For example, if the business finds it is taking too long to fill critical open positions, then it is possible to show how this high “time to fill” is adversely impacting the financial results of the company by way of missed revenues. Showing how revenue can be increased can provide a compelling argument. Below are some examples of triggers that indicate that a workforce plan could be beneficial:

  • High cost-per-hire
  • High time-to-fill metrics
  • High employee turnover
  • Significant company expansion
  • High employee demand in your market
  • Hard to achieve desired level of productivity within a reasonable timeframe
  • Company is slow to react to new business opportunities
  • Added pressure on current employees covering for open roles

Step 3: Gather the data

A high “time to fill” is adversely impacting the financial results of the company by way of missed revenues.

To calculate missed revenues, start by choosing a few roles where it’s easy to measure the value of 30 days of revenue-generating work (sales roles are often a good option). You can easily look at expected revenue from each sales resource and then extrapolate out the missed revenue by not filling that role. Remember, the value of those 30 days is what you will ‘earn’ by filling that role 30 days faster. Next, determine how many of these roles require filling each year. Multiply this by the 30 days figure to arrive at a hard-to-ignore revenue impact.

Alternatively, you could look at the additional costs you are incurring by not having a proper workforce plan, such as the cost of over-using recruitment agencies or search firms to fill jobs. The cost-per-hire difference between you filling a job yourself (via your in-house recruitment team or RPO partner) versus the cost of doing so via a search firm can be large and may be significantly reduced with a robust workforce plan tied to the right resourcing plan and model.

Step 4: Implementation

Once the business case is complete, you need to find the most appropriate person to present it to the Executive Team to build their buy-in and support. Typically, this is the HRD or CFO. If the business case is done well, then adopting your recommendations should be an easy decision. By demonstrating the value and getting buy-in to workforce planning, you’ll position the company for better project success and create a company “habit” that will reap benefits for years to come. Aside from the data gathered from your business, these are some other helpful benefits of a workforce plan to help you build your case:

  • Agency spend reduction
  • Improved budgeting accuracy
  • Accurately defined roles attract better talent
  • Greater visibility into recruitment technology needs
  • Enhanced succession planning and internal mobility
  • Proactive talent pipelining of actual business needs
  • Anticipated costs before the recruitment process starts
  • Better positioned to execute new business initiatives successfully

Once you have approval and enter the implementation phase, it is critical that the plan is kept live and relevant by regular contact with senior executives to ensure any changes to strategies are understood and reflected in the workforce plan. Without this, ensuring a workforce plan matches the plans of leadership simply isn’t possible. Your CEO also needs to back the process, sending a signal across the business that workforce planning is both essential and valued.

Other possible partners of the workforce plan in your business are your finance and analysis experts. Finance can assist a keener understanding of tax, accounting, regulatory issues, and pro forma studies pertaining to different types of labor. The business analysis team can gather the data needed to assess internal attrition rates, time-to-fill statistics, the percentage of positions that remain open beyond a certain threshold, and other insightful workforce analytics guiding more informed decisions in different markets and geographical regions.

Step 5: Keep evaluating

HR and Talent Acquisition should review the Workforce Plan every three months

HR and Talent Acquisition should review the Workforce Plan every three months, and meet with the formal Workforce Planning team (comprised of senior-level business stakeholders) every six months to keep them engaged in the process. Naturally, the workforce planning team would meet to respond to any major market changes or shifts in the business plan.

As you continuously evaluate the outcomes, analyze the workforce plan effectiveness along the way. Are roles being filled faster? Is retention improving? Are we achieving the expected results? Are we getting the necessary cooperation from the field? This way you’ll identify gaps and course correct as necessary.

Some pitfalls to avoid in your workforce planning are:

  • External-Only Recruitment Focus
    Don’t forget the wealth of internal skill sets already in the company. A good process includes internal mobility, succession planning and professional development. Include internal employees in the recruitment plan.
  • No Budget for Training
    Part of Workforce Planning involves identifying internal talent you can move into key roles with some basic training. If no training budget exists, this internal talent cannot be leveraged.

Keen to get started?

While it is ideal to create a Workforce Plan that is truly company wide as it leverages talent and synergies across the entire business, this may not be possible for businesses embarking on this for the first time. In these instances, you may have to focus your energies initially in one business division to prove the concept before expanding the plan and actions across the entire organization.

Whether you are considering workforce planning, are at implementation phase, or have existing workforce plans, Hudson RPO has experience with workforce planning in different industries, markets, and businesses. Would you like to discuss your workforce planning?

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