Human resource planning at its core involves having the best-suited people employed in appropriate numbers, deployed to the apt workstream in a timely manner. Business houses need to use this strategy to ensure a uniform supply of skilled workers and avoid potential shortages or overstaffing. It has a significant impact on both the yield and profitability of the business.
Even though many organizations don’t use a formally laid out process, they let the method unfold organically. Yet, as they go through the exercise, many commonalities emerge. It needs to be incorporated as a continuous practice to capitalize the complete benefits by making course corrections along the way as the external factors change.
Let’s see how you can embark on this complex journey following market standard practices to avoid reinventing the wheel!
The first stage in getting workforce planning right is to be absolutely clear of the organizational objectives that human resources will support to achieve. You will seek answers to where is the company headed in the long run, what are its goals, how fast does it want to reach there, etc. The objectives may differ based on the functions. For instance, when Finance decides to go for higher automation it will translate to lesser employees required for the same output. Similarly, in the service department when new products or services are underway upskilling existing employees’ knowledge and recruiting new employees will be the top priority.
After you’ve got the goals and intentions clear and signed off, move to take stock of what you have at hand. It entails listing all employees of the organizations with their qualifications, skills, proficiency levels, experience, past performance, designation, and cost-to-company. This will be the stage where the inventory of the current workforce will be either created afresh or updated from the existing database.
Now, let’s match the objectives and inventory undertaken above and it will enable your planning team to forecast the future demand of employees. For realistic forecasting take into account the assessment of your organization’s current resources as well as consideration of future employee movements, such as retirements, attrition, promotions, cross-functional transitions. Remember to keep an eye out for any external factors which may impact supply for a particular skillset in the volatile and evolving market.
There are many scientific methods in use to forecast your labor demands from as basic as trend line projections, regression analysis to complex models like the stochastic method. The choice of the tool is largely dependent on your comfort level, the accuracy sought, and the data available at hand.
Now that you know what you want and how many of them you need, gap estimation will be the next step. The gap estimation step serves three purposes. Firstly, it will indicate skill areas where there is an employee deficit. It will call to action the recruitment team to acquire the requisite talent by actively hiring or keeping a steady pipeline ready. Secondly, employee surpluses will emerge demanding reallocation or terminations to balance the scales. Thirdly, it will highlight the need for training and cross-training of employees to address skill gaps.
Next comes the important step of formulating a plan to bridge the void between demand and supply of human resources. To address employee shortage few options available would be to get part-time workers (for seasonal surges), paid and legal overtime, sub-letting processes, and outsourcing employees for standard skills. You will also need to focus on retention programs to cease further attrition. In the scenario where there is a surplus of employees, some tough decisions have to be taken to either announce voluntary retirement schemes, cross-functional deployments, layoffs basis performance standards within the legal fabric of the country, job sharing, hiring freeze, etc.
Once your plan is ready, seek a budget and team to implement the formulated plan. The plan has to inevitably align with the organization’s long-term goals without discounting the individual department’s objectives.
As with every healthy planning activity, seek feedback on the results of the plan from the stakeholders. Monitor the implementation and control its output closely. This will ensure that any required changes can be made with a faster turnaround time basis the feedback received and the success of the human resource planning becomes a continuously growing process.
In a nutshell, human resource planning like any other planning follows the logical sequence of taking stock of how much one has its disposal, what is required for the future, what are the gaps, how will the extra be acquired or the excess be trimmed. It is a recurring process starting with goals of the planning and terminating in the control and feedback phase.
