Workforce Planning: An Awesome Opportunity to Enhance & Grow Your Business

Workforce planning is the process an organization uses to analyze its workforce and determine the steps it must take to prepare for future staffing needs.  Great and successful businesses understand the importance of proper workforce planning.  It's time to give your business that same edge.  Keep reading to understand 4 steps to conduct your own workforce planning and give your business a leg up on the competition.

There are several distinct analytical steps that need to betaken in workforce planning:

1. The supply analysis, also referred to asthe “supply model” or “staffing assessment,” involves an analysis of anorganization’s current labor supply.

2. The demand analysis, also referredto as the “demand model,” includes a review of future business plans andobjectives.

3. The gap analysis compares thedifferences in the supply and demand models and identifies skill surpluses anddeficiencies.

4. The solution analysis focuses onhow to address gaps in current staffing and future staffing needs throughrecruiting, training and development, contingent staffing, and outsourcing.

Step 1: Supply analysis

The purpose of the supply model is to analyze theorganization as it currently exists—in other words, the supply of labor andskill sets that are vital to an organization. This analysis should encompassnot only the number of employees and their skills, but also factors such asworkforce demographics, including representation of protected classes.

A supply analysis also involves making projections ofattrition (due to resignations, retirements, internal transfers, promotions andinvoluntary terminations) over the planning horizon being used, so thatattrition is taken into account in considering the future supply of labor andskill. From this information, a profile can be developed of current staff as itwould exist in the future if no action is taken in recruiting, training oroutsourcing.

Step 2: Demand analysis

The purpose of the demand model is to forecast theorganization’s future workforce composition. This forecast should take intoconsideration a range of business issues. These issues may include newproduct lines, competitive forces and expansion/constriction in globalmarketplaces, anticipated workforce availability within geographic boundaries,and a myriad of other issues.

Internal and external factors need to be considered in thedemand analysis. Analyses of internal demand influences may focus on thefollowing questions, among others:

• Will the current workforce, with minimal retraining, have the skill sets necessary to perform new duties with a new product line?
• Will current employees remain loyal to the organization that has anticipated changes in mind?

Analyses of external demand influences may consider thesequestions:

• Is labor readily available that possesses the skills and abilities needed by the evolving organization?
• What external pressures will change demand for goods and services that may ultimately affect internal business decisions and, thus, workforce planning needs?

The future composition of the workforce must also beanalyzed. This analysis will seek answers to the following questions:

• How many employees will be necessary to achieve business plan goals and objectives?
• What skills and competencies will be required for the new business?
• What is the composition of the available workforce population?
• What will the organization need to do to attract prospective employees?
• What will the organization need to do to attract and retain a diverse group of workers?

Step 3: Gap analysis

The next step in the process seeks to compare the supplymodel with the demand model to identify gaps between the composition of thecurrent workforce and future workforce needs. The workforce planningprofessional may want to categorize a variety of future scenarios and thenselect the future that is most likely to occur, with contingency planning foralternative futures. When conducting this analysis, the planner will want toidentify the additional number of employees with requisite skill sets that willbe needed, as well as the employees who will no longer be needed due to limitedskill sets.

Step 4: Solution analysis

Solution analysis involves the development ofstrategies to close the gaps identified in the previous step. Approaches formeeting future workplace demands may include recruiting, training andretraining, utilizing contingent staff, or outsourcing. The approaches selectedwill be dependent upon whether the organization will need to expand, contract,restructure or rely on contingent staff to meet new workplace demands.


Content from SHRM.ORG