To effectively determine future workforce requirements, employers must commit to longer planning horizons. Ger McDonough explains why
Shifts in technology, workforce demographics, the automation of jobs and pressure on staffing budgets are just some of the trends shaping the future of the workforce.
Businesses need to align strategy choices and workforce implications with reliable workforce data and analytics capability, to ensure that the number of staff and the right mix of skills and capabilities are considered.
A mature approach to strategic workforce planning and meaningful people analytics will help leaders make informed decisions about their workforce for the long term.
Planning for the future
Workforce planning is an essential part of enterprise planning.
Leaders must consider the capabilities they will need in the future and put in place firm plans for developing, buying or borrowing talent to ensure they can deliver against their strategy.
Competition for the right talent remains tough. Organisations could fail to consider a range of external and internal drivers without an appropriate focus on scenario planning and impact modelling, increasing their workforce risks.
Without a clear plan, organisations may continue to make short-term decisions based on affordability without considering long-term capability requirements.
Making a future-ready workforce
All roles will be affected by change over time—the question is: to what degree can this be managed in order to minimise adverse effects on the workforce?
Digital transformation will profoundly affect the types of roles, business processes, customer behaviours and ways of working within our organisations.
Leaders must ensure that their workforces are future-ready. By clearly understanding their current and future workforce capability, they can determine workforce gaps and implement strategies for skills development.
Reassuringly, the results of PwC’s 2022 Global Workforce Hopes and Fears Survey show that companies are investing in their workforce through upskilling, with 40 percent of employees indicating that their employers are upskilling workers to address labour shortages.
Four key actions for workforce planning
To mature your workforce planning capability and look further into the future, we recommend taking action in four areas.
1. Align business strategy and capabilities with workforce strategy
Workforce planning should be carried out alongside business planning in a two-track process.
One is operational and aligned to business and budget planning. The other is a longer horizon, data-driven, strategic sweep that accounts for seismic shifts in workforce supply and demand.
The second track must forecast the impact of environmental changes—including technological, generational and cultural—and define the required future workforce to meet these challenges.
2. Look for iterative improvements to your workforce planning process
For organisations with workforce planning processes in place, analyse the strengths and weaknesses of your approach and look for opportunities to improve.
The key is to concentrate less on cyclical workforce planning processes and more on continuous improvement to the overall approach.
Value comes from embedding processes, measuring outcomes, digitally enabling the process wherever possible, using better data and building your workforce planning capability.
3. Accelerate the development of critical capabilities
Once you have identified capability and capacity requirements, a tactical approach is essential to accelerate the development of critical capabilities by having a robust action plan to develop, buy, or borrow to address capability gaps.
Successful organisations accelerate the development of critical capabilities to maximise investments and carefully consider the breadth of available reskilling, upskilling, and employment models.
4. Build confidence in your data for people-focused decisions
Data-based insights can tell you a lot about your people and drive better decisions at every level. However, data is rarely harnessed and taken from analysis to action.
HR must take the lead in building confidence in data across the employee lifecycle. With the correct data, you can create simple but powerful models to scenario plan and predict future needs.
Ger McDonough is People & Organisation Partner at PwC