HR TRENDS
The need for Strategic Workforce Planning
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"To govern is to plan; and if you don’t plan ahead, then you are headed for disaster" said Emile de Girardin in 1849.
Anticipating the potential impact of strategic business decisions, while planning key actions to execute that strategy, obviously seems like a good idea. Also, considering possible risks and disruptions seems to be a reasonable and intelligent way of ensuring an organization's continuity, development, and sometimes even its very survival.
However, not all companies implement Strategic Workforce Planning the same way; some don’t implement it all while others only very little.
One of the obstacles is that they don’t use the appropriate tools, thus making implementation difficult and time-consuming. They also believe they do not have the right databases (skills inventories for example) or high-quality data.
However, while it is essential for organizations to consider the minimum requirements in terms of skill databases and data quality, SWP is also, and above all, a ‘mindset’ in human resources planning, and the ability to play out scenarios and analyze simulations that will enable relevant decisions to be taken in the face of business and HR challenges.
No Strategic Workforce Planning without control over databases and data.
While initiating Strategic Workforce Planning does not require that all data and databases be set up and detailed, it is nevertheless essential to base your SWP practices on a solid structure, which the Administrative management/Payroll HRIS can and must provide. Not only must this data be included in the SWP solution, but adding past data will enable you to create the best simulations and forecasts based on current and past data as well as future predictions based on business drivers. Essential databases are organizational and job-related repositories that include information on contracts, working hours and compensation (which may initially only be averages for a category that the organization classifies into groups, such as ‘job family’, etc.). This is the minimum required to launch a project to implement a SWP solution. You can also add to the databases to further refine the scenarios and analyses, using a skills inventory, current and past remuneration data, time and attendance data (to specify leave). This can be done gradually, so you don't need to have all your databases ready in advance.
Strategic Workforce Planning is a "mindset", from defining drivers to simulating scenarios
SWP is more than just a simple management process, it is a mindset, an entire concept that involves forecasting, anticipating, imagining and planning based on probable scenarios.
We need to go beyond our limits and our habits and not just simply learn from the past, but rather consider the potential of tomorrow, and prepare to develop or confront this future.
This does not, of course, mean that we anticipate the future in a dreamlike state. We need to pragmatically study all possibilities based on who we are and the goals we have set, while taking potential risks into account. We must combine our development strategy, the current operational reality and the differences in these scenarios based on various criteria impacting our business and human resources (e.g. regulations, technological innovations, war, natural disasters, etc.). We need to set a reasonable range of possibilities for establishing the most probable scenarios that also include external and/or unknown data.
The key is to define the right business drivers and their impact, and then build relevant scenarios based on these drivers. You need to include those involved in operations and business.
Business drivers are all business-related factors that impact HR policies in the future, such as creating a product or service, acquiring a company, selling a subsidiary, expanding into another country, researching new technology, winning a contract that requires recruiting, or more general factors such as projected retirement and attrition. These are all linked to the organization's strategy, as well as its day-to-day operations. To this, we can add the likely external factors that could affect how strategy is implemented, so that we can create alternative scenarios. This is the way to include risk management in Strategic Workforce Planning, not by continuously underestimating all development components, but by identifying components that will only impact scenarios where the occurrence of risk is simulated.
Another key stage in Strategic Workforce Planning is defining the scenarios to run simulations that can in the long run help in the decision-making process. These scenarios should focus on the main elements of the company's business and strategy, while taking other criteria into account, enabling us to consider "most likely", "worst case" and "best case" simulations. These various simulations can help create roadmaps based on the occurrence of certain criteria. They can also be used to make optimum decisions by determining the detailed impact based on the probability of occurrence and thus define action plans that ensure that the organization always takes the right path, based on results and risks.
Strategic Workforce Planning helps you decide on the HR policies to implement
The simulations produced by a Strategic Workforce Planning solution enable you to determine the different expected possibilities for Human Resources, both in terms of future needs and redundancies.
If skills are included in the analysis, SWP can even provide the requirements and risks related to such skills, providing information on large groups, while determining what skills we would focus on in terms of development and recruitment.
If salaries are included in SWP, certain analyses can then be used to locate inconsistencies in salaries, as well as forecasts of certain practices, leading to possible risk analyses of future pay gaps according to certain criteria (such as jobs, gender, age, seniority and skills.).
SWP enables us to make decisions today to prepare for tomorrow. This involves defining action plans that can be monitored through SWP, but above all that can serve as a basis for other human capital management processes and solutions, such as training, recruitment, compensation, succession planning, talent management, career and mobility management. It is therefore a qualitative and quantitative source of discussion and decision-making for HR departments, that are now equipped to deal with the HR issues raised by General Management, Finance departments or Operational departments, who often have in-depth financial analyses at their disposal. SWP can thus greatly benefit HR departments, by presenting probable scenarios and their impact that cover more than just the short-term financial implications. This enables HR to base its HR policies on strategic, operational, financial and HR considerations, within a solution that simulates and analyzes the possible effects of decision-making.
We therefore understand that Strategic Workforce Planning is not a one-off, annual exercise, but an ongoing management tool, with continuous operational alignment with HR management.
A solution that enables this alignment, this constant updating and these recurring simulations, will offer a definite competitive advantage for an organization that has understood that its human resources are the key to its success.
