4 Tips for Strategic Workforce Planning

In part 2 of my blog series focusing on Inflation, Minimum Wage and Strategic HR I’ll be covering what SME’s can do to better manage their workforce to set-up for long term success (if you haven’t yet read part 1, check it out here). This blog focuses on Workforce Planning and how adopting a well thought out strategy catering to operational needs can yield better tangible and intangible outcomes for your business. Before getting into some tips to consider though we must first ask ourselves – what is Workforce Planning?

Workforce Planning is about making sure that the right person is in the right job, at the right moment meaning a business is not overstaffed or understaffed. Like most things, utilising HR Analytics and combining this with operational data can allow organisations to better plan for future demand requirements and remain flexible during periods where there is a downturn in work. Below are 4 tips for SMEs to address workforce planning and some of the potential benefits such a process can bring:

1) Functional Structure

The first step in effectively planning your workforce is to ensure you have an appropriate functional structure, one that encourages open communication across departments and effective delegation of work to ensure you’re getting the best value from each role. For example:

·     What roles will be required in the future and why?

·     Are there clear levels of authority for decision making purposes to prevent back and forth interactions?

·     Are roles clearly defined to ensure essential duties/responsibilities are being completed and not endlessly discussed in meetings?

·     Do senior managers have too much administrative duties falling on them?

The purpose of establishing a functional structure is to establish clear and effective responsibilities that ensures all essential work is completed and avoids developing a hierarchy and/or concentration of power with certain roles. Throughout my experience (and certainly amongst the experience of our team at wattsnext) we’ve often found a disconnect between the structure of a business and the outputs of each role; undertaking this planning can certainly add a lot of long-term value.

2) Talent Review

The next step in beginning to proactively plan your workforce is to ensure that senior management has a clear understanding of the skills and capabilities of employees. It may sound trivial, but often organisations don’t clearly understand what employees are fully capable of – so where do you start?

A great place to start is to review employee’s CV and create concise, 1-page summaries that outline the key areas of knowledge and qualifications of your staff and tying this into a matrix identifying strengths/areas for improvement. This can be advantageous for several reasons, including:

·     Identifying areas employees can be redeployed to temporarily or permanently in case of low workloads/organisational change.

·     Getting additional support/knowledge on ad-hoc project(s) work without an expensive or time-consuming recruitment process.

·     Planning for future growth and succession when employees leave or when new roles become available.

Furthermore, an effective assessment of the talent of staff will greatly contribute to forward planning of training and development – something that can have substantial benefits in an organisation through promoting internal growth and saving on recruitment costs via increased retention outcomes. 

3) Succession planning

If you’ve made it to this step your business should now have an effective structure that plans proactively for the future, along with a good overview of the capabilities of employees. The next logical step is to start combining these two aspects to create a succession plan.

Succession planning involves identifying top talent in an organisation and developing personalised plans to promote their internal growth – allowing a business to ensure employees have the right skills and knowledge to take that next step when it becomes available (either through an employee resigning or via natural organisation growth). When doing this there are some important biases to be aware of that can hinder success:

·     Like me Bias – This can lead us to judge and categorise people based on real or perceived similarities that may not be important rather than the actual inputs and outputs the are required in a role.

·     Recency Bias – This is the tendency to place too much emphasis on experiences that are freshest in our memory, even if they are not relevant or consistent.

·     Contrast Bias/Effect – This is most common during hiring and/or selection processes and occurs when instead of comparing an employee to the requirements of the role, we compare them to other employees and/or candidates. By doing this we may be missing some crucial areas that are important to a role and overemphasising others.

·     Confirmation Bias – Again this is another common bias that occurs and happens when instead of utilising all information available to us, we pick and choose what information we rely on as it aligns to our own view/decision. 

Being conscious of these biases and establishing both quantitative and qualitative metrics/data to inform our decisions will often lead to better outcomes, a fairer selection process and more targeted succession planning that best caters to the needs of the business, not the perceived benefits of an individual. 

4) Training and Development

Whilst there are many more strategies to support effective workplace planning, we’ll end on Training and Development and how this ties into the steps above. Training and Development is often an overlooked area within SMEs, either due to lack of capacity or lack of knowledge to develop and implement an effective framework. Without this crucial step through the planning process could adversely impact the longer-term results we’re looking for. This step is the most visible by employees in an organisation and is about taking steps to turn identified areas of improvement/lack of knowledge into action.

To get the best value a business should aim to:

·     Tailor training and development to address the identified gaps and also apply to their succession plan.

·     Ensure individuals are proactively supported in seeking out training and development, not leaving it to self-direction.

·     Clearly explain the value-add of training and development to employees so they understand it is about future growth opportunities and not an indictment on performance.

·     Make sure employees are aware of promotion pathways that coincide with their development and required training.

Overall, this blog aims to get SME’s and business owners thinking about their workforce and how they can really tailor the structure of the business and development of their employees to best achieve longer term outcomes. Whilst not a fix-all solution to wage pressures a long-term approach will have substantial benefits in demonstrating that employees are valued which can increase retention, and decrease expensive recruitment processes – something to strive for in such a tight recruitment market.