Strategic workforce planning is necessary for small and mid-sized businesses to align their human resource capabilities with organizational goals. The multi-phase process is long and labor-intensive, but it does not end after the completion of a supply, demand and gap analysis. The whole point of undertaking workforce planning in the first place is to arrive at solutions and engage in ongoing monitoring.
What should strategic workforce planning outcomes look like? Axcet HR Solutions, a professional employer organization (PEO) serving small and mid-sized employers in the Kansas City area, explores that question in this blog.
Creating a strategic workforce plan requires organizations to understand their mission and future objectives along with what they need to achieve them. Axcet assists clients with this phase of the process by asking them to consider several questions. Here are just three examples:
Once we have a better understanding of a client’s objectives and challenges, we are ready to move on to the next outcome.
Related: What Are the Benefits of Workforce Planning?
One of the benefits of operating a smaller company is that it allows leadership to focus on providing niche products and services. However, that does not mean small and mid-sized businesses do not have to worry about competition. The desired outcome at this phase is to determine where our clients excel, where the company needs improvement, and what strategies it should use to maximize its competitiveness. This is the point of strategic planning where supply, demand, and gap analysis come into play.
The term supply analysis refers to gaining an understanding of the current state of the workforce. We work with clients to analyze how their current employee base might change over time due to outside influences like the state of the economy and demand for certain positions. The HR strategic planning team at Axcet starts the process by reviewing how well the workforce an organization has in place aligns with its long-term strategy.
When determining supply, we ask our clients to provide the current annual turnover rate and consider how continuing at that rate would impact customer service expectations. We then offer several solutions, such as arranging workloads in a different way for greater efficiency, increasing training opportunities, and updating the hiring strategy.
The flip side of supply is demand, and this is where we seek answers to questions like factors that influence employee workload by department, strategies used to measure workload by service, and whether technology changes would disrupt current workload processes. Other factors that could disrupt company output include a significant change in the customer base, internal policy changes, and external legislative changes.
Gap analysis is the most critical aspect of strategic planning from a competition standpoint. Axcet helps clients identify where skill gaps exist and what they can do to close them. Another thing to consider here is whether the current skills and competencies of the workforce are up-to-date and reflect the most recent changes in business operation strategy.
Related: How Post-Pandemic Workplace Planning Will Look Different
After gathering the data indicated above, the next step involves breaking down larger concepts into smaller actions spread throughout the organization. We stress to our clients that organizational alignment is a huge process that requires taking several steps to implement.
For example, small and mid-sized business leadership might consider implementing the most critical components of the strategic workforce plan immediately. This makes sense, especially when facing urgent priorities like high turnover or staff shortages. Many organizations opt to roll out new processes in phases according to priority to avoid overwhelming employees with changes. Measuring the impact of the first round of changes before moving onto the second round is also a good idea.
Implementing a new strategic plan and gaining buy-ins from management and employees of each department does not go far enough. Organizations also need to determine a process to manage the plan to ensure that all the hard work of developing it does not go to waste.
Having a process management plan in place from the start provides smaller businesses with the necessary feedback to determine if making any changes is necessary. We recommend reviewing progress monthly or quarterly, depending on the size of the client’s organization and the number of changes implemented with the new strategic plan.
Each outcome in strategic planning builds on the success of the previous outcome. Clients who experience the most transformative change focus on strategic differentiation and organizational alignment around priorities. They also make sure their strategic plan is articulate and consistently executed.
Organizational alignment and maximizing human capital are critical for growth, but few small and mid-sized companies have the time or resources to undertake such extensive research. Partnering with our Kansas City-based PEO can make all the difference. Our HR team specializes in organizational development, including workforce planning, compensation analysis, organizational structure review, and much more. Axcet HR Solutions invites companies with fewer than 250 employees to schedule a consultation to learn more about workforce planning and our other services.
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