Seventy-three percent of midsized companies expect increased revenue in 2015, and 66% also expect increased cost pressure.
How are midsized companies going to realize revenue gains with sustained cost pressure? How specifically must the HR teams at these companies respond?
Through precise talent planning and staffing. The best strategic plan will not succeed if there aren’t talented people to support and execute against it. Likewise, workforce planning isn’t effective if done in a vacuum.
Workforce Planning Is a Critical Challenge
Few HR teams (just 30%, according to our research) are effective at strategic workforce planning. To be clear, strategic workforce planning isn’t the same as annual staff planning. Strategic workforce planning involves following a consistent process to identify and respond to strategic talent gaps as determined by business strategy.
Planning for and staffing the talent needed to execute strategy is mission critical for HR. Failing to address the talent needs most critical to the organization’s long-term strategy puts growth at risk.
Anatomy of a Strategic Workforce Plan
Strategic workforce plans are:
Strategy Driven—Strategic workforce planning is driven by long-term strategic talent needs, not near-term staffing needs.
Sensitive to Supply—Strategic workforce planning goes beyond identifying short-term staffing gaps to surfacing organizational and labor market risks to strategy execution.
Not Merely a Sourcing Response—Strategic workforce plans don’t just provide short-term, reactive, recruiting-based solutions—they identify proactive solutions that explore a broader set of activities (e.g., organizational/job redesign, outsourcing, talent management strategies) that can most effectively alleviate strategic talent constraints.
Building a Better Workforce Plan
To build effective strategic workforce plans, HR teams must engage in strong two-way dialogues with peers in other corporate functions about talent needs.
Talent needs analysis is crucial to understanding current and future people issues in a particular function.
The information gained from talent needs analysis conversations informs and develops the function’s strategic workforce plan, and influences the function’s business plan and the HR business plan.
HR teams should structure talent needs analysis conversations in order clarify different, yet equally important aspects of management and operations with their functional peer. Ask questions about strategy, structure, workforce requirements to deliver strategy, current people management issues, and top priorities.
The Value of Strategic Workforce Planning
With an effective workforce plan, an organization can better compete in today’s increasingly global and complex talent landscape.
The HR function also benefits from developing strategic workforce plans:
Better understanding of changing strategic talent needs and gaps
More agile HR response to changing strategic gaps
Improvements in key recruiting metrics like slate quality, time to fill, and candidate conversion rate
What’s more, effective workforce planning has the highest impact on HR’s strategic contribution to the organization—more than engagement strategies, succession management, performance management, and other essential activities.
CEB can help you step by step with workforce planning. Members of our HR practice Leadership Councils are encouraged to login to the member website to access a library of tools and templates for effective workforce planning.
Not only does CEB help leaders within HR, but we also support leaders in other corporate functions. We uniquely provide pan-company perspectives and approaches for driving growth. Read our latest research “Driving Growth Through Cross-Functional Fluency” to learn how executives at midsized companies can work better across traditional lines to achieve business outcomes.
Download from cebglobal.com tools like our Workforce Analysis Questionnaire to use and share with peers.