How tech is transforming strategic workforce planning

Placing the right skills in the right places at the right time. This is the holy grail organisations desperately seek in the face of a rapidly-changing business landscape, a talent squeeze, and growing skills gaps. In these uncertain times, strategic workforce planning ensures that your talent is skilled, resilient, agile, and capable of supporting your business goals both in the present and the future.

For skills-based organisations, strategic workforce planning is advantageous as it leverages the organisation's focus on skills development and utilisation. This allows for precise alignment between talent and business needs, streamlined training efforts, and proactive management of skill gaps to ensure agility and competitiveness in a rapidly evolving business landscape.

In this article, we’ll discuss what strategic workforce planning is, its importance and uses, and how it can be optimised with the right technological tools.

What is strategic workforce planning?

Mercer, a global consultancy that provides technology-driven HR solutions, defines strategic workforce planning as a “systematic, disciplined process for identifying and addressing gaps between current and projected workforce requirements”.

Strategic workforce planning involves understanding business goals, workforce status, and market conditions in the present, then using this information to create a strategy for where the organisation wants to be, say, five or ten years from now and what it needs to do in terms of talent management to get there. 

Through this system of review and analysis, strategic workforce planning ensures people with the right skills are in the right roles, so that the organisation can operate efficiently and be successful.

Why is strategic workforce planning important?

There are many reasons, but here are four obvious benefits of practising strategic planning:

1. Spots skills gaps
   Most organisations are unaware that they are missing critical skills and when they do, it has already done irreparable damage. However, strategic workforce planning makes it possible to identify skills gaps way before they turn chronic. Strategic workforce planning ensures that organisations are not caught off-guard when the need for new skills so far unused arises. It also guarantees that continuity isn’t a problem when employees quit or retire.

2. Aligns talent strategy with organisational goals
   Strategic workforce planning makes sure talent decisions are always taken with an eye on organisational goals. That way, the decisions taken today will create a workforce that can support the company’s objectives and overall direction many years from now.

3. Lowers costs
   Strategic workforce planning prioritises internal hires, which improves employee engagement and retention. This lowers the significant costs associated with attrition and external recruitment. Another advantage of strategic workforce planning is that it helps maintain appropriate staffing levels, which means no overstaffing or the expenses related to it.

4. Builds agility and resilience
   It’s not enough to just be a skills-based organisation to survive the intense competition and rapid technological advances shaping the world of work. Agility and resilience are the need of the hour, as the unexpected events of the recent past taught us. By empowering companies to build capabilities and deploy resources efficiently, strategic workforce planning helps prepare them for the next big disruption.

How strategic workforce planning works

A fair amount of research goes into strategic workforce planning. Analysing the current talent pool and predicting future workforce needs are key to developing and implementing an effective workforce plan:    

1. Workforce analysis
   Strategic workforce planning starts with analysing one’s workforce to find out, for instance, what people and skills does an organisation have at present. However, a workforce analysis does more than compile an inventory of available skills and competencies. It provides insights into the talent pool – such as age, seniority, performance levels, future potential – that can be used to inform talent decisions and policies. Furthermore, it throws a light on rates of recruitment (internal and external) and employee turnover, which are essential for maintaining an adequate workforce. A workforce analysis points out the strengths and weaknesses in the workforce, making it a mandatory step in the strategic workforce planning process.

2. Skills gap analysis
   This step involves identifying the skills required to achieve business targets, both short-term and long-term, and checking for any skills gaps. No one knows exactly what the future holds. But there are ways to read the signs and predict future workforce needs. Monitoring external factors – the state of the economy, shifts in consumer sentiment, advances in technology, changes in regulations, and so on – can offer ideas. When skills gaps are identified early on, there is time to develop strategies and take action to counter the shortages before they start hurting the business.

How technology aids strategic workforce planning

In 1997, Netflix started off as a DVD rental company, shipping DVDs via mail for a fee. A decade later, in 2007, it reinvented itself as a streaming platform, quickly moving from just 1,000 films in its directory to creating and producing its own content. What makes Netflix the giant success it is today is its early adoption of streaming technology. The Netflix story allays fears of technological disruptions as it proves that technology can be a boon rather than a bane and enhance the effectiveness of a product or process multi-fold. 

It goes without saying that strategic workforce planning, too, can benefit from the right technological solutions. Strategic workforce planning depends on accurate compilation and analysis of data. Technology makes it easier and more efficient to work with vast amounts of data. With the right tech tools, it becomes possible to turn tons of information into an easy-to-decipher data dashboard while also reducing human error and bias and increasing cost effectiveness.

Three workforce planning tech tools to consider

In recent years, a host of tech-enabled solutions that help businesses adopt skill-based strategies have emerged. Here are three tools that can elevate any workforce planning process:

1. Skills management platforms

A skills management platform – such as MuchSkills – facilitates the identification, assessment, and development of skills in an organisation. At MuchSkills, for instance, we help institutions and individuals map available skills and identify skills gaps with the help of our modern and beautifully visualised skills matrix and a comprehensive skills gap analysis tool. A skills matrix or skills inventory makes it easy to understand what skills, competencies, proficiencies, qualifications, and experiences are available in the workforce. Meanwhile, a skills gap analysis brings missing skills and weaknesses to the fore.

A skills management platform serves as a centralised and accessible hub for an organisation's skills data. Unlike traditional skills matrices, these platforms are dynamic and versatile, adapting to the evolving skills landscape. By providing real-time insights into the workforce's capabilities, platforms like MuchSkills enable organisations to monitor skills and competencies continuously. They facilitate seamless comparison of skills data across the organisation, allowing for precise talent allocation to each job.

2. Learning management systems

Once an organisation has intelligence on its skills, the next step is to use this data to strengthen its workforce with new skills and knowledge. That’s where learning management systems (LMS) come in. An LMS is a software platform or application that manages, distributes, and monitors learning and development initiatives in the workplace. Given that the number of skills to perform a single job is going up by 10% year-on-year and that L&D is the top retention strategy deployed by organisations worldwide, strategic workforce planning can greatly benefit from LMS platforms.

Employers can use an LMS to offer essential and regular upskilling/reskilling to employees, helping them move ahead in their careers while also fulfilling the organisation’s evolving workforce needs. What’s great about learning management systems is that they can offer personalised training that meets individual and group needs. Employees as well as team leaders can also use them to actively track progress. Learning management systems are especially useful in employee onboarding as they facilitate training and ensure the person fully understands their new role. Thanks to constant innovations, many LMS platforms can now integrate with HR and other workplace systems, making the workforce planning process even more seamless.

3. Talent marketplace solutions

Companies that adopt a skills-first approach and culture of continuous learning are usually advocates of internal mobility – an internal recruitment system that allows employees to explore career paths within the organisation, both vertically and laterally. And an internal talent marketplace is the technological assistant companies turn to in order to implement their internal mobility policies. Internal talent marketplaces connect employees with career development opportunities within the organisation, be it a new role, project, mentorship programme, or skilling experience. They help allocate and assess talent purely on the basis of skills and competencies, promoting transparency and fair play. By giving value to the workforce’s aspirations for self-improvement and professional development, internal talent marketplaces foster employee engagement and retention.

A skills management platform like MuchSkills is quite useful when it comes to building an internal talent marketplace. Companies can use our Team Builder feature to identify and shortlist employees with the skills needed for the project or task at hand. 

Additionally, by partnering with education tech firms that specialise in L&D, organisations can invest in the professional growth of their employees so that they have a reliable supply of skilled candidates who can quickly step into any new role that opens up in the future.