The context of increasing uncertainty perceived by companies continues. 40% of them fear having to let go of a significant part of their teams in the near future, according to a Pléo study conducted among 3,500 executives.
This anxiety explains the intensification of investment control strategies deployed by companies. For HR teams, this situation is driving a proactive approach to strategic planning.
What is Workforce planning ?
Definition of workforce planning
Incorporating Strategic Workforce Planning into the annual HR budgeting process with managers. Today, the growing challenges of talent retention, skill acquisition, and overall profitability elevate the importance of both strategic and operational planning. A set of new solutions and technologies justifies the continuous improvement of the predictive models provided by SWP.
The Streamlined Process of Workforce Planning
In the jargon of strategic workforce planning, the planning process is based on the comparison between "Supply" and "Demand".
What is the Supply dimension of Workforce Planning?
The Supply dimension consists of the resources available to the company:
- Internal employees, their capital of skills, available time and commitment to the company
- Subcontractors, freelancers and partners
- Talent pools identified and listed by expertise
- Potential (often measured by attrition rate) and expected departures (retirements and transfers)
These data are collected in different systems (Talent Management system, Core HR, Applicant Tracking systems) that need to be converged into a single software platform.
What is the "Demand" dimension of Workforce Planning?
Defining resource requirements, skills is a joint activity with the business teams. The "demand" dimension includes:
- Financial, technical and commercial objectives and projects to be carried out
- Adaptations and opportunities offered by the technological, commercial and regulatory environment.
- Expertise, skills specific
- Desires for mobility, development and evolution when they are confirmed
The strategic planning process results in the financial valuation of a gap to which recruitment, succession plans, HR development, the strengthening of subcontracting, the mobility plan, will constitute the adjustment levers.
The 3 key origins of Workforce Planning
The SWP approach is now active in 89% of companies in the US. In France, this approach is becoming more widespread, particularly in companies with more than 5,000 employees.
Why is talent planning so important today?
This importance comes from the exacerbation of predictive needs. Overcoming the increasing complexity of the economic landscape, business changes and the behavior of the company's stakeholders challenges the habits of planning based solely on annual budgeting.
The Emphasis on Structural Skill Movements
According to Ludovic Taphanel, from the Observatoire des métiers, the French are experiencing a revival in job movements. This dynamism is sometimes desired but most often undergone. Pole emploi now speaks of 5 to 13 job changes for the 26.7 million employees in our country.
Whatare the factors driving the resurgence in mobilities?
- Changes within similar professions, 1 in 5 employees change companies in the first 6 months according to an SAP/Oxord Academics survey
- The "creative destruction" caused by the structural evolution of the economy. Digitalization, AI penetration and sustainable economy are among the most notable determinants.
- The professional transition which concerned 9 million workers (35% of French employees) in 2022.
Imagine the complexity that this renewal will bring for companies!
Capturing External Resources and Controlling Internal Mobility: Vital Activities for Company Survival.
Continued shortage of know-how
Companies say they are still suffering from the mismatch of candidates with their needs. The French turnover rate also continues to rise, with an average of 15.1% turnover (below the European average of 17%). The inability, on a macro-economic scale, to provide companies with essential skills helps to justify a more efficient management system. It should be noted that the shortcomings in attracting skills are not compensated for by sufficient investment in training.
In fact, between 2018 and today employees have seen an overall decrease of 27% in resources directed toward their development.
Intensification of the "HR Management Control" role
What is HR Management Control?
Also known as social management control, HR management control is a quantified approach to the various HR metrics. It enables the effectiveness and efficiency of HR processes to be assessed and decisions to be made accordingly.
The reasons for an activity that has become central to the HR profession
Rebalancing of operational and organizational activities
Like the financial function, which is made up of the two business lines of control (cash management, accounting, credit management for 75%) and planning (analysis, budgeting, anticipation for 25%), the HR function is tending to expand its activities from operations (recruitment, onboarding, learning & development) to organizational concerns.
The maturity of HRIS equipment
The maturity of the equipment in payroll software, automation of the personnel administration like Personio facilitates the management of the costs related to salaries, or the analysis of the costs related to training and development.
Measuring the impact of HR investments is a necessity in a context of rationalization. HR teams are encouraged to identify redundant or missing skills , their sustainability and participate in their transmission.
Conclude on the origins of the planning revival
The 3 reasons for a reinforced HR strategic planning go hand in hand with the acceleration of data flows. This explains the investment in intelligent solutions to take advantage of it and conditions the emergence of new HR expertise such as "Employee Experience Manager", "HR Analytics Manager" or "Data Governance Manager".
The outcomes of Workforce Planning
Workforce planning provides part of the answer to the complex and uncertain context that is now becoming permanent. It supports managerial priorities by anticipating resource allocation. Managers are better equipped and now have an overview of the components of their human capital.
Modeling financial impacts and making informed decision
Many industries such as energy or pharmaceuticals operate in cycles of growth and slowdown. These cycles lead to periods of intensive recruitment and then downsizing: these opposite movements, which are particularly costly, can be smoothed out thanks to continuous modeling of the various scenarios considered.
The Strategic Workforce Planning minimizes the costs associated with human resources management:
- Avoid costs related to overwork or underutilization of staff by anticipating staffing needs.
- Minimize the effects of high staff turnover or inadequate employee training.
- Determine the most effective and efficient HR initiatives
See our use case Optimizing HR investments.
Empowering Managers with a Tangible Resource Allocation Mechanism
The fixed idea of managers is to have the necessary resources to execute their action plan. The management of skills is today apprehended under the angle of individual qualifications whereas the performance of a team depends much on the collaboration and the development of collective know-how.
To achieve this, it is no longer enough to bring together individuals but to think about other key aspects:
- Identifying gaps in expertise that require upskilling programs or the acquisition of external talent.
- The transmission continues from skills with a view to perpetuating internal know-how.
- Succession planning that offers greater fluidity than an unexpected departure of a key role.
In addition to an internal talent marketplace, the SWP offers the levers to :
- Support collaboration between teams and the emergence of skills .
- Detect weak signals that alert to the loss of key skills .
- Simplify the management of resources associated with projects.
Preparing for the Transformation of Professions
The lifespan of a professional skill is decreasing under the influence of many factors such as artificial intelligence. The company and its employees adapt to this new situation by collecting external data. They are integrated into a map of the abilities to be disseminated in the organization according to various time horizons. The reality sometimes reveals thatthese same assets are already present in the organization but are just waiting to be revealed.
Businesses also evolve according to the company's strategy. Sage, a publisher of business management solutions, used the Neobrain solution to evaluate the impact of its evolution towards a SaaS model.
Here's what the SWP solution now offers Sage:
- Identification of the impacted employee populations.
- The skills already present in the company
- The gaps of skills and solutions to acquire them at a certain rate.
Addressing the need to strengthen skills is envisaged through 3 actions:
- Upskilling programs
- Professional mobility
- skills to be acquired from outside
The SWP offers the HR function the most strategic role in the company since it becomes essential in the quantitative and qualitative articulation of human resources in the service of the business. It questions the business departments to formulate scenarios of evolution and exploits the data to provide the various methods of resolution.
Conclusion
Ironically, solutions like ChatGPT, which are largely responsible for business changes, are also, like strategic workforce planning, one of the best sources of adaptation.
Strategic planning offers more accurate data that is now visible in real time. The management of HR activities and the results achieved give it a decisive position.
