HR Remedy News

Workforce Planning Insights Article

December 24th, 2009

Plan Now: Five Steps to Workforce Planning

Starting in 2011, the first wave of Baby Boomers will reach the conventional retirement age of 65, yet many companies still do not know the impact such turnover and retirement will have on the workforce or their businesses.

Workforce planning, by definition, is not new. Most companies have compiled labor data to determine what types of jobs and skills will be needed down the road and how workforce estimates compare to those needs. But in today’s highly competitive business environment where maintaining an agile, fully-staffed workforce is more difficult, workforce planning can be a valuable tool in finding the right people with the right skills now — and in the future — particularly in industries where shortages of skilled workers are common. It can also help organizations decide where to build or relocate, how to train current employees, and whether certain aspects of the business should be outsourced.

Start small, but start now

Despite the benefits workforce planning offers, many companies shy away from it because they feel it is too time-consuming, too costly, or too data-intensive. A recent study from the Society for Human Resource Management confirms this. Although aging employees and shortages of skilled workers are major concerns, only 33 percent of respondents charted their organization’s demographic make-up, and only 31 percent have determined future retirement rates. Companies that remain reactive and do not undertake any planning run the risk of incurring talent shortages that can significantly impair their ability to remain competitive.

Workforce planning does not have to be complicated or expensive, just focused and systematic. Actually, it can be more effective if done in small steps with a focus on a few critical areas of the business rather than as a massive project. Here are five steps companies can take to get started:

1. Start with your business needs. Map your people strategy against your business needs in a timeframe that makes sense, which for many businesses might be in increments of one, three and five years.

2. Inventory your workforce. Determine who will be eligible for retirement over the next five years and chart the void in skills and knowledge that will leave with them.

3. Survey your aging workforce. If you want to keep either most or some of the people of retirement age, seek to understand their wants and needs now.

4. Boost your retention efforts now. If you haven’t done so already, check the level of your employees’ “commitment quotient.” Many companies conduct an annual survey that asks employees to anonymously respond about their motivations for staying or leaving.

5. Hire for the future. Revisit your succession planning, career management and high potential programs for their ability to retain the next generation of workers.

A systemic approach to workforce planning will enable your organization to assess supply and demand, identify gaps and then develop action steps to fill those gaps. The end result is the ability to re-align talent for future growth so you get the right talent in the right place at the right time.