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How Workforce Planning Can Change HR

How Workforce Planning Can Change HR

Jay Jamrog | i4cp

November 13, 2009

If your bead on the future is looking blurry these days, you’re not alone. The global recession has thrown off a lot of organizations’ expectations and predictions. So, it’s little wonder that many are now striving to do a much better job of strategic planning for the future, especially in the area of talent.

Workforce planning, or WFP, is not a new process, but it is an increasingly critical and fast-evolving one. It’s come a long way since 40 years ago, when it tended to go by the name of “manpower planning,” but there’s still a long trek before it reaches its potential.

Over the past six months, i4cp has conducted nearly two dozen workshops and webinars for member organizations, has interviewed over a dozen members of our WFP advisory board and has completed a comprehensive survey. All were designed to uncover what is driving the revival and evolution of WFP and what high-performing organizations are doing differently in this area.

While there are many reasons for doing WFP today (talent shortages, productivity needs, demographic changes, leadership development, engagement concerns, etc.), the prevailing reason for the renewed interest in WFP was expressed by one of i4cp’s WFP advisory board members: “The downturn got the attention of management and the broader HR community. We found ourselves lacking in our ability to understand our strategic talent needs.”

The good news is that WFP is trending upward. About 70% of the respondents to our survey said that they are doing some form of workforce planning in their organizations today, and 43% of those who are not doing WFP now plan on implementing this process in the future.

But that doesn’t mean that most companies are doing it well. There are three types of workforce planning: operational, tactical and strategic. While most organizations with WFP are highly engaged in short-term operational workforce planning – which includes actions such as headcount forecasting and staffing requisitions – relatively few are highly engaged in long-term strategic workforce planning, which includes actions such as business planning, needs assessments and scenario creation.

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But, of course, in today’s tough markets, excellent strategy development and implementation is the name of the game. HR must play its role, and workforce planning is the critical link between the business strategy and HR strategy. That is, excellent WFP starts with a thorough understanding of the business strategy.

Fully 97% of survey respondents who have highly or very highly effective WFP processes said that the main benefit of WFP is that it supports the strategy and business planning process. And over three-quarters (78%) of high market performing organizations responded the same way.

One member of our advisory board noted, “We work within the context of the strategic plan. We’re interested in two components: identifying role segments and talents that need to be either acquired or downsized to be successful and gain a competitive advantage.”

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