Workforce planning requires a wealth of data, and those who can pull insights set their organizations apart from those that have yet to measure data and leverage them to their advantage.
As talent shortages are a top concern, HR leaders can use data-driven strategic workforce planning to avoid talent shortfalls or a talent crisis due to disruption.
The three most common workforce planning challenges are:
- Quality of HR data
- A reactive mindset
- Failure to align business strategy with talent strategy
Data-backed workforce planning addresses all these challenges, provides resilience, minimizes risk, and ensures business continuity in the face of economic or business disruptions.
Why Companies Fail at Comprehensive Workforce Planning
It is time-consuming to centralize and normalize HR data. Whatever the reason for not using data optimally, underusing workforce data introduces risk a few companies can afford.
With proactive workforce planning, CFOs and HR leaders can identify and mitigate risks before the business reaches a crisis point and spot pockets of expertise that could give you a leg up. Another reason for failure is that workforce planning often fails to break down information and organizational silos.
The COVID-19 pandemic significantly and unexpectedly disrupted the business and operating models. Some organizations have seen demand, while some have faced a decrease in demand. Some have a mixture of demand shifts across different business areas. For instance, there has been a decrease in banks’ branch activity while contact center activity has increased.
With such a rapid rate of change, a successful partnership between HR and the business is essential. It must ensure that the workforce – in terms of capabilities, skills, and availability, and the work – in terms of how work gets done aligns with shifting business objectives.
Achieving Organizational Success with Data-Driven Workforce Planning
HR leaders need evidence to understand the impact of the current situation and external factors on the organization. A key component of workforce planning, scenario planning enables the workforce planning teams to predict the effect of external factors. The insights can inform leaders to consider various trajectories and workforce requirements.
Workforce planning has no ‘one-size-fits-all’ approach but encompasses three guiding approaches: Strategic, Operational, and Tactical, with its specific objective, time frame, and planning level.
Here is an example:
Organizations often focus on strategic and tactical elements but omit the operational approach, where you can add much value. Successful workforce planning is not only a long-term plan but must link the strategic plan with operational and tactical workforce decisions that will impact business success.
Improving Workforce Planning with People Analytics
Additionally, HR analytics or people analytics can monitor, measure, and analyze workforce data to improve business outcomes and set new initiatives up for success. With performance management, tenure, and payroll data, CFOs can identify talent gaps, burnout, or high attrition levels.
HR leaders and finance professionals can use data to assess current workforce conditions and create a plan that encourages engagement and increases satisfaction and retention. HR analytics offers valuable tools to fine-tune and manage the plan with the ability to drill down from summary to detail and create ad hoc models.
The three types of HR analytics to consider include:
- Historical analytics: It considers the past to quantify and describe changes made to the workforce. It yields insights into revenue per FTE, turnover rates, employee engagement, the average time to fill a position, benefit costs, and headcount trends.
- Predictive analytics: It considers future business objectives to spot gaps in both skills and headcount.
- Prescribed analytics: It combines historical and predictive analytics to shape the workforce and inform decision-makers of outcomes.
The analytics part of workforce planning is using data to determine whether you have the correct number of people with the right skills at a given time in each department based on your short- and long-range business plans. By visualizing and modeling HR scenarios, workforce planning leaders can make workforce decisions faster and with more confidence.
Draup’s talent intelligence platform provides insights into your workforce planning across the entire spectrum of operations. The available data enables analysis of the existing skills against future needs and assists you in planning cost-effectively. Business leaders can analyze the impact of workforce decisions based on existing and hypothetical scenarios.
