By Lee An Schommer, Chief Product Officer at insightsoftware
We continue to face a tight labor market in the U.S. According to the Brookings Institute, contributing factors include declining labor force participation and job seekers waiting longer until they settle on a new position.
In a challenging labor climate, companies need to keep employees engaged while mitigating risks of burnout. As an executive in the software industry serving the financial, HR, operations, and IT markets, one thing we often hear from prospects is that their current tools or systems aren’t cutting it. Consequently, it’s stretching resources thin and stressing out team members. We also recently ran a research study reflecting similar sentiments.
Keeping employees engaged and satisfied in a tight labor market is critical for the bottom line. According to an Accenture study, companies can witness a 9.7% revenue gain when employees do well across six fundamental human needs: emotional and mental, relational, physical, financial, purposeful, and employable.
But building a great, supportive culture within a company requires a multi-faceted approach. Strategic workforce planning is one key aspect of creating a great workforce culture. It is collaborative by nature and encompasses not only HR but other business units to ensure all stakeholders’ needs are met.
While there is no one-size-fits-all approach to workforce planning, below are five questions to ask as you get started with planning in the second half of 2022 and beyond.
What Are Our Organization’s Strategic Goals?
All your workforce planning processes should ultimately flow from your company’s strategic objectives. If you’re looking to expand significantly over the next five years, there needs to be a plan to cultivate new, homegrown talent in your company so you can train up to be managers as the business grows. The knowledge they have in the company is going to be important to spread to new hires as you grow, so training them to be leaders may fall into part of your long-term growth plan.
How Does Our Current Workforce Fit Into Those Goals?
In the here and now, HR teams and finance departments need to work together to understand staffing requirements. There are hard and soft costs to training employees and hiring, and organizations need to factor all this in as part of their strategic workforce planning. It is one thing to look at your current team and evaluate their effectiveness and bandwidth; but in an era where four million people in the U.S. leave their jobs every month, HR teams need to factor in turnover.
What Other Skills Will Our Company Need In The Future?
Once your organization has a strategic and tactical plan in place and has assessed its current workforce and immediate needs, you’ll want to consider what additional skillsets you will need to hire for in the next one to three years. For example, if there are product launches or geographic expansions in the near term, HR will need to have a strategy to hire and train accordingly.
If there are already people in the organization with skillsets that match current needs, evaluate that against your longer-term needs. From there, you can create a roadmap for future hires.
How Are We Going To Define KPIs For Our Workforce Planning And Adjust As Needed?
As with any planning initiative, you’ll want to make sure you have a mechanism in place to track how effectively you’re implementing it and how it’s helping you shape, grow, and train your workforce. You will want quantifiable metrics and data points to define success. That could include anything from attrition rate to internal mobility rate to time-to-hire. Whatever KPIs are most important to your organization and workforce planning, you’ll want to set those early on and measure the results as you move ahead. You also will want the flexibility to modify your targets as priorities change. Your time-to-hire goals may be longer in our current tight labor market, but you may have more aggressive time-to-hire goals six to 12 months from now, depending on how the market shifts.
What Tools Do We Need To Make This A Reality?
Planning, reporting, and analytics solutions help align workforce planning with broader company objectives. When making strategic workforce decisions, you need anytime/anywhere access to critical information about compensation and employee performance. You want tools that provide that information in an easy-to-digest format. You also need those HR analytics tools to balance collaboration features with security and privacy because they deal with sensitive employee data. This is something we’ve witnessed a demand for at insightsoftware, and as a business, are mindfully and strategically expanding our product portfolio to meet these needs.
All in all, there are many ways to approach strategic workforce planning and we’ve only scratched the surface of how we can approach it. Asking these questions as a start can help your organization move toward the next step as you prepare to empower current employees and add team members in a challenging job market.
About The Author
Lee An Schommer is Chief Product Officer at insightsoftware.