What is the value of good Strategic Workforce Planning or SWP? If done well, good SWP ensures that the workforce has truly contributed to the business’s bottom line. More specifically, good SWP measures how well the workforce contributed to the business strategy and it accepts (embraces) that business outcomes are significantly driven by workforce performance.
Many businesses still treat their workforce like a cost that needs to be managed and controlled.
Let’s begin with a simple statement of fact: the workforce is the knowledge capital a business uses to achieve its desired value proposition. There is a direct correlation to increased productivity, profitability, performance and shareholder value in businesses that embrace that statement as fact.
To appropriately execute a successful SWP a business must develop and own the understanding that to be successful they must differentiate the distinct difference between the contribution of the workforce and the cost of the workforce. You cannot focus solely on cost. This requires a change in thought and long held belief. SWP is not a “throw money at the problem” solution, and it is not a cheerleading exercise saying how much you “value people.” It requires that all levels of management understand how your workforce, its capabilities, and behaviors, drive business strategy execution.
Commonly, Business looks at labor improvements through efforts such as:
Aggressive wage growth to compete in the recruiting market followed by across the board pay cuts when downturns happen.
Unfocused layoffs for short-term financial relief preceded by simply hiring warm bodies to do ill-defined and measured work.
Good SWP eliminates these bandaid approaches. It requires that business demand different performance from its HR. HR cannot be required to justify its existence based on administrative efficiency. Instead, it must be demanded that HR contribute to successful organizational strategy execution that creates a sustainable competitive advantage for the business. A sustainable competitive advantage cannot be duplicated by the competition — competitive advantage is driven by a successful workforce that is treated as an investment instead of a cost.
Successful SWP execution involves five major steps. These are:
- Identify Strategic Goals and Objectives
- Assess the Current Workforce (supply) and Forecast Future Workforce Needs (demand)
- Identify Current Workforce Gaps
- Develop and Implement Strategies to Close Workforce Gaps
- Evaluate and Revise Strategies
Of course, these five steps each have multiple substeps such as refining reward and recognition programs, recruiting process, training and development initiatives and so forth. As a result, a strong SWP allows the business to:
- Align workforce requirements directly to the business’s strategic and tactical business plans
- Define both current workforce needs and future requirements
- Identify skill gaps and develop strategies to fill them
- Develop appropriate measurements to identify workforce success measures and the corresponding alignment of the workforce with organizational needs.
- Identify and change the behaviors that act as barriers to effective workforce strategies and success.
Organizations that engage in proactive and successful SWP are more profitable than those that do not. Some research suggests that these businesses are as much as 34% more profitable. Isn’t it time your business considered SWP?
To learn more about the SWP process and how it can drive business success you can download our complimentary epub, STRATEGIC WORKFORCE PLANNING found here on our website resources page.