What is Strategic Workforce Planning?

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Introduction

In previous articles, I introduced a tool to kickstart your Strategic Workforce Planning projects: the SWP Readiness Assessment. Then I asked myself: “But actually, do people really know what Strategic Workforce Planning is?”

So in this article, I’m going to talk to you about… Strategic Workforce Planning (aka SWP) and explain why you should take a closer interest in it.

I suggest we (re)discover how this approach is far more than just an operational HR process.

Indeed, Strategic Workforce Planning can prove to be a catalyst for transforming your organizations and help reposition HR in its strategic role within your organizations!

Well… I’ll warn you right now: this is not a neutral article; I’m advocating for my cause because I’ve fallen in love with this process 🥰. Let’s explore all the dimensions of this fascinating approach together! (Yes, yes, I assure you, SWP can be very captivating!).

SWP will help you demonstrate and strengthen your essential position within your organizations. This process offers you the opportunity to highlight all the facets of this noble function that is HR: from operational to strategic, including support and guidance for employees and management.

And so, in this particular article, I’m going to explain what lies behind these three letters: Strategic Workforce Planning, and why you should take an interest in this process.

Why take an interest in Strategic Workforce Planning?

Why should you care about SWP, even if you’re not part of the HR family?

Because of this statistic: 70%.

According to a study conducted by KPMG, 70% of organizations have experienced at least one project failure in the past 12 months, and 50% of respondents indicated that their project consistently failed to achieve what they set out to accomplish.

So basically, if you decide to launch a transformation project to help you achieve your goals, well, let’s say you have a 7 out of 10 chance that this project will fail… Not very encouraging, huh. (Well, in reality, it’s a bit more complicated than that…).

There are several reasons why these projects don’t come to fruition. But often, it’s because the HR strategy was the “weak link.”

When Executives (and this may be your case…) think about the company’s goals and strategy, HR is not often at the table. HR comes in later, to align with what has already been decided beforehand by Business & Finance.

It’s an interesting approach: we think about the company’s major commercial and financial challenges and then, later, we look at how this impacts employees, with very little leverage to challenge this business strategy from a human perspective… because everything has already been decided upstream.

Yet, a company is defined by both its organization, its processes, and the employees who keep it running…

And this is where Strategic Workforce Planning comes in!

Its goal is to reposition HR on the same level as Business and Finance, thereby creating the coherent link that is often missing between business strategy and HR strategy.

“The question you’re looking to answer is: can the company execute its plans from the perspective of people, skills, culture, leadership, structure, and governance?”

— Maria Horn, Group Operations Director, Nando’s

What is Strategic Workforce Planning?

If you look it up on the web, Strategic Workforce Planning, or “Planification Stratégique des Effectifs” in French, is generally presented as an approach aimed at anticipating, meeting needs, and addressing challenges in terms of workforce for an organization.

It’s a process that involves identifying the gaps between the current workforce and future needs, and developing an action plan to ensure that the organization has the employees, skills, and knowledge necessary to achieve its objectives and therefore execute its business strategy.

Here’s how I could summarize this process in one image:

At first, I created this visual for myself to better visualize what was behind these three words. I wanted to break down these three words and better understand what was at stake.

And then, little by little, I started sharing it. By the way, if you have any comments, suggestions, or remarks… I’m all ears!

So… let’s break down each word:

STRATEGIC

SWP is based on the long-term strategy of organizations:

• What is the company’s ambition and vision for the coming years?
• What organizational and human action plans will the company need to implement to achieve this vision?

The key is to identify the future needs that will support this strategy.

The word “strategy” itself implies that the time frame considered should generally be long enough to project and build this strategy.

I will explain in future editions that it is not always necessary to project 5-10 years ahead to do SWP. It will mainly depend on the challenges the organization faces, its environment, its market, and the changes it must address.

This ‘strategic’ part of the process also aims to challenge the assumptions used in defining the company’s strategy.

We know that the future is uncertain. What is true today may not be true tomorrow. And sometimes, it can be interesting to define multiple plausible scenarios to imagine and iterate on different action plans. (I’ll talk more about this in a future edition…).

This is the difference between forecasting and predicting 😉

Now, let’s move on to the second word.

WORKFORCE

It’s great to project into the future with beautiful strategies written on paper, but we must not forget that we start from the present to move toward the realization of this vision. The company does not start from a blank page and must also consider this in implementing its strategy.

And, to make things more challenging, it turns out that the world around us changes, evolves, and will not remain static, and by the time we implement these action plans, some assumptions will already be obsolete 😉

Hence the importance of knowing the current workforce well: their profiles, skills, potential development wishes… as well as key indicators such as turnover rate, workforce costs, or demographic analysis.

By starting from our current point and analyzing how our ‘workforce’ could naturally evolve, this can serve as a basis for comparing the two trajectories.

By anticipating the natural evolution of our workforce, we can identify emerging trends, critical skills to develop, and potential gaps between future needs and the current capabilities of our workforce.

Now let’s move on to the last word, which gives meaning to this approach, SWP!

PLANNING

SWP could remain a theoretical exercise if we stopped at comparing the natural evolution of the workforce with the identified needs to achieve the company’s strategy.

In short, merely identifying the gaps between the present and the future.

But that’s not the case (or at least, it shouldn’t be). After identifying these gaps, the most important thing is to determine how we will reduce them using different internal levers (training, skill development, internal mobility, reorganization…) or external ones (recruitment, contractors, temporary workers, partnerships…).

And if you had defined multiple possible scenarios, this is the phase where you can identify potential risks (human, financial, organizational…) of your different strategic options.

That’s what these three words are hiding!

By the way, if you are a fan of ISO standards, know that this process is referenced in ISO 30409:2016.

Here’s an excerpt:

“It is the process of economic intelligence intended to inform the organization of the current and future impact of the external and internal environment on its activity, enabling it to adopt a resilient structure to adapt to upcoming cultural changes, so it can better position itself in the future.”

Well, that’s a bit of theory, but concretely…

• How can we justify the relevance of Strategic Workforce Planning (SWP), which typically involves 3-5 year projections, in an environment of rapid change? Is it relevant? Is it a waste of time?
• How can SWP reconcile agility and flexibility when it is a long-term-oriented process?
• What approach should we choose to start? Should we go for a complete rollout (big bang) or start with a Proof of Concept?
• How does SWP consider the need for employees to acquire new skills in a context where skill requirements are rapidly evolving?
• Given often tight budgets, how can we justify the necessary investments to implement SWP, especially if some see it as a potentially unnecessary expense due to the inherent uncertainty of long-term projections?
• Isn’t this whole thing just a complex, bureaucratic machine?

To find answers to these questions, you’ll have to wait for the next articles 😉. I’ll share use cases to help you understand how you can use this process as a lever for your transformation projects!

Why should you care about Strategic Workforce Planning?

…Because it has the power to influence a large part of a company’s processes.

Yes, yes, I know, I’m not neutral when I say that 😁, but my goal is to convince you, right?

“In today’s constantly evolving world, organizations must ensure that they have the right people in the right positions at the right time to remain competitive and profitable. SWP is a process that can enable organizations to meet this need. However, many companies still have not implemented SWP and, as a result, they suffer from a competitive disadvantage and fail to reach their full potential.”

– excerpt from the RL100 Report – Strategic Workforce Planning Playbook

Here are some examples of the benefits of implementing an SWP process in your organization:

• Alignment between Strategy & Human Resources: SWP allows you to strategically align your workforce with your challenges and objectives, ensuring that you always have the right number of people with the appropriate skills for each identified key role. And as a bonus: SWP helps develop cross-functionality and creates a shared strategic vision between HR, Business, and Finance.

• Anticipation of Needs: By anticipating future needs, you avoid sudden shortages and the high costs associated with urgent recruitment, while ensuring a smooth transition for new hires.

• Employee Retention: SWP also allows you to improve the employee experience by considering, for example, the aspirations of your current employees and offering them career paths.

• Cost Reduction & Control: SWP helps identify and reduce skill gaps, allowing you to anticipate the training needed for employees. It enables you to reduce employee turnover costs and optimize HR spending through more precise planning and anticipation of recruitments.

• Agility, Flexibility, and Responsiveness: Thanks to SWP, you are better prepared to face market changes and technological shifts. You will be able to react more quickly by adapting your HR action plans accordingly. You will also be encouraged to consider different scenarios for implementing your company’s strategy, helping you address external events.

• A Competitive Advantage: Your competitive advantage will come from your company’s ability to have “the right employee in the right place, at the right time” and, above all, with engagement and motivation. You will be able to respond quickly to market needs by offering better customer service while providing an employee experience that is aligned with your company’s culture.

Alright, I’ll stop here for this first article!

I hope I’ve piqued your interest in learning more 😉

Further Resources to Explore this Topic:

• An article by AIHR: Strategic Workforce Planning 101: Framework & Process.
• A study on Strategic Workforce Planning by CRF – Corporate Research Forum: SWP – Unlocking Future Capabilities to Drive Business Success.
• Another study on SWP by Aptitude Research: Unlocking The Power of Strategic Workforce Planning.
• A YouTube video: Reinventing Workforce Planning | Adam Gibson.

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