Speaker 1: What is strategic workforce planning? Hey friends, Josh here, founder of HR University, and today I'm going to talk about strategic workforce planning, the definition, benefits, and how to implement it. Before we move on to the main topic, make sure to subscribe to our channel though to get future HR University updates. Okay, let's dive in. So what is strategic workforce planning? Well, the definition is figuring out what your company needs in terms of employees. Simply put, with workforce planning, you analyze your current staff levels and see how they can fit in your company down the line. Even simpler, workforce planning makes sure that the right person does the right job. This way you avoid understaffing or overstaffing. Also workforce planning lets you see how you can train your current and future employees and also how to line up your company goals with the recruitment strategy. Strategic workforce planning also helps you go over the skills of applicants you may hire. It is no secret that employees are the foundation of every company. So if you're lacking skilled workers, a workforce plan is just what the business needs. A well-made workforce plan will not only help you foresee possible skill gaps and recruit new workers on time as a result, it also helps you strengthen your company goals and long-term success. And here are some common reasons why it's important for companies to implement a workforce plan. The first one is talent management. As I said, every company wants to have skilled employees, and having a good workforce plan can do wonders in attracting that talent. Then there is the aging aspect. The demographics of employees change, and that naturally means that one day you'll have to say goodbye to some of your employees, regardless of how good they are. This is also closely tied to reducing the overall business costs. For example, if a company has 100 mechanics and 50 of them are going to retire in 5 years, then a good workforce plan will ultimately help them foresee the total costs of the process. Now what are the benefits of workforce planning? An effective workforce plan isn't just about quickly responding to employee changes in the company. In fact, strategic workforce planning allows you to oversee the problem long before it becomes an actual issue. So the first benefit of workforce planning is the ability to prepare for the future. But it is not just a future that you can prepare for with a good workforce plan. Noticing any workforce gaps is essential for any business to thrive. So you have to analyze the skills of your employees, and with it, notice if there are any gaps between them and the company goals. Finally, with all of this, what you get in return is a competitive advantage. Strategic workforce planning can prove to be a very useful tool when facing competitors in the long run and being able to attract and retain the best talent and knowing the exact talent you need to get on board. Let's go ahead and discuss the basic principles of this planning strategy. The first one is connecting with the strategy of the organization, also known as a company strategy. This is a guide for the path that your company will be taking in the next couple of years. This makes it a great basis for the workforce planning strategy. The second one is the Pareto Principle. For all of you that don't know what that means, it's a principle that states that with only 20% of the work, you can actually achieve 80% of the results or effectiveness. Simply said, always look to focus on the critical roles of the company, which are the ones that create the biggest success of the company. A great example of this is Johnson & Johnson, where 150 critical roles made for 80% of the value in the whole company. The third principle is the quality of your strategy. If you want to see results, you need to build a good plan and analyze every possible outcome. At this point, you might be wondering the difference between workforce planning and workforce analytics. The two are connected in some way, and that is that workforce analytics or people analytics deals with collecting data about the employees in your company. As for workforce planning, while it can be a tool in HR analysis, the main difference from analytics is that it collects data about the workers for a longer period and with higher focus. It also centers around employee formation and then plans how this can ultimately contribute to the company's future. At the same time, people analytics pays attention to how the collected data will affect the overall performance of the business. How do you create a strategic workforce plan? This process includes several steps. These are analyzing your workforce formation, followed by scenario planning, and then analyzing the future workforce formation. Let's go through each one of them. The first one is analyzing your workforce formation. You want to check what your employees offer to the company and if you want to go a step further, divide the formation to the quality of work the staffers show and its quantity. The quality tells you if your employee does a good job or if they'll continue with the same level in the future. This makes a solid foundation for managing good talent. On the other hand, the quantity indicates the potential risks within the company. HR managers use a flow matrix to get a clearer picture of the employee structure in the firm. This matrix includes new hires, employee turnover, and internal promotions. The second step is scenario planning. Strategic workforce planning is all about the future, so it's good to know where you are now and where you want to be in the future. Nobody can predict the future either, but you can create as many possible scenarios as you want. And in this way, you can be ready for anything that ultimately comes your way. And the third step is a mix of the previous two. So you have analyzing the future workforce formation, and this is good to create two separate groups here, the first regarding what you want and the second regarding what you expect to really happen. The expected formation is a formation three to five years when the company keeps doing what it's currently doing. For example, the International Transport Forum has predicted that by 2030, Europe and the US will face a reduction of drivers of around 70%. So if your company is in the transportation sector, you might want to hire more people because you're otherwise understaffed. And are there any shortcuts to better workforce planning? Maybe there are no shortcuts to creating a solid workforce plan, but there are sure some tips that you can consider to help make the process easier. And number one, always have your eyes open for any skill gaps. This way you can predict future challenges and prepare for them accordingly. And the next up here is use people analytics. We had mentioned this a little earlier. This can help you learn more about your staff and how the staff can affect your company. And of course, asking for external help is always an option. And don't forget scenario planning. It might seem pointless at first, but you never know what the future holds. And of course, always make sure you monitor and adjust your plan. If there are some drastic measures to take, act as soon as possible and rely on your strategic workforce plan. And that's it. In this video, we covered the concept of strategic workforce planning. And if you enjoyed it and you feel like you have a better understanding of the subject, make sure to go ahead and like the video, subscribe to our channel to learn more about the best HR practices and how to become a better HR professional. And I'll go ahead and see you in some of our following videos. Cheers. ♪♪♪